Content of the material
- Frequently Asked Questions
- How Much Life Insurance Do You Need?
- Why Term Life Insurance Instead of Whole Life?
- Why young families choose term coverage
- How Much Does a Million Dollar Life Insurance Policy Cost?
- How to get million dollar life insurance
- Let’s calculate your life insurance need
- Qualifying For A 1MM Term Life Insurance – Financial and Medical Requirements
- Can I Get $1,000,000 Whole Life Without A Medical?
- $1,000,000 Single Premium Whole Life
- Guaranteed Issue Life Insurance $1M Cost
- $1,000,000 Convertible Term to Whole Life
- Tips on How to Shop for $1 Million Term Life Insurance
- Do I need $1 million of coverage?
- How much life insurance do you need?
Frequently Asked Questions
How much does a million dollar life insurance cost?
Like most things in life, it depends. The cost of a million dollar life insurance policy will depend mostly on your age and health status. If you are fairly young (30s, 40s, 50s) and have no major health problems, then getting coverage should not be difficult and still be low cost.
How much is a million dollar life insurance policy?
Like it was mentioned previously, the cost of a 1 million dollar policy or multi-million policy will depend on how old you are and if you are healthy. Understandably, if you have a medical condition like heart disease, cancer, diabetes, etc. Your premiums may be prohibitively expensive, or you may be denied coverage.
How much does a 2 million dollar term life insurance cost?
It’s impossible to give an answer without knowing your age, healt status, previous medical hsitory, family medical history, your activities, etc. As you can understand, a life insurance company will want to know about any factors that may shorten your life. The table above has some rough estimates of premiums.
How Much Life Insurance Do You Need?
Before you apply for life insurance, regardless of the amount, it’s important that you calculate your life insurance needs. Not having enough life insurance is one of the worst mistakes that you could ever make for your loved ones. There are several different categories that you need to add up when you’re looking to get the right amount of life insurance coverage. The first number that you should add up is your debts and final expenses that would be left behind to your family members once you pass away. Add up everything from your to your credit cards bills. Make sure that your plan is enough to pay off all of those bills. The next number to tally is your annual income. If you’re one of the primary bread-winners in your house, they would struggle without that source of income. The next goal of your life insurance is to give them the money that they would need to pay for all of their expenses without sacrificing their standard of living. With just these two simple categories, it’s easy to see how a family could need a million dollars of life insurance coverage. If you need any assistance calculating your life insurance needs, our agents can walk you through all of the calculations and help you determine what size plan is going to work best for you and your family’s needs. We understand that purchasing a life insurance policy on yourself or a loved one can be quiet overwhelming if you are not familiar with the companies or policy types. If you need more clarification on the different types and ins and outs of life insurance coverage, check out our post on life insurance explained for dummies!
Why Term Life Insurance Instead of Whole Life?
Any discussion on life insurance should include a comparison of whole life and term life insurance coverage. After all, both products can be immensely valuable in the right situation, yet one product (whole life) costs considerably more than the other.
Most of the time, the debate is settled in favor of term life insurance based on cost alone.
A whole life insurance policy can easily cost 10x the same amount of coverage you can get with a term policy.
With that being said, whole life insurance and other investment-type life insurance coverage can be valuable in terms of the cash value you can build up over time. Whole life insurance also offers a fixed benefit amount for your heirs that will last for your entire life, yet the cost of your premiums are guaranteed to stay the same.
The cash value of a whole life insurance policy also grows on a tax-deferred basis, and you can borrow against this amount if you need a loan. Further, many whole life policies from reputable providers also pay out dividends during good years, which can be substantial.
Why young families choose term coverage
The problem with whole life and other similar policies like universal life is the fact that premiums can be exorbitant for the amount of coverage you might need.
A couple with young children provides a good example since they might need a $1 million dollar policy or more to provide income protection for their working years and have money left for college tuition and other expenses.
With young families, expenses are already high.
This includes costs for food for a family, childcare, heavy use of health care, and the seemingly endless demand for clothing, furniture, and even entertainment as the children grow.
As you can see from the cost comparison below from State Farm, there’s not enough room in the typical family budget to afford the type of life insurance that’s needed.
A 40-year-old mother and breadwinner in excellent health would pay $80.09 per month for a term life policy that lasts 20 years, whereas a whole life policy in the same amount would cost $1,266.69 per month (or $14,560 annually).
This is a classic situation where term insurance rides to the rescue. The family can afford to buy the amount of coverage they need at an affordable price, whereas paying for permanent life insurance coverage in the same amount would be difficult to justify.
And just as important for people of any age and in any circumstance, the extra funds not being spent on insurance premiums can be invested to gradually improve your financial situation.
So absolutely, term insurance will work best for most people.
How Much Does a Million Dollar Life Insurance Policy Cost?
Let’s face it, becoming a millionaire is something most people only dream of, yet just because you aren’t rich doesn’t mean you shouldn’t consider buying a million-dollar life insurance policy.
In reality, million-dollar insurance is quite common and might be less expensive than you imagine. Check it out for yourself. Get a free quotation for $1 million of term coverage with our no-obligation quotation software. There is no need to submit any contact information to see real-time pricing estimates.
The three most frequent queries that come up when deciding whether a million-dollar policy is appropriate for you are:
- Is it possible to acquire a million-dollar life insurance policy?
- When do a million dollars of coverage make sense?
- Finally, what is the cost of a million-dollar life insurance policy?
Calculate: Life insurance needs calculator
How to get million dollar life insurance
Purchasing a million dollar life insurance policy isn’t hard, but there are several steps you’ll need to take during the process.
- A good first step is consulting with your financial advisor or a knowledgeable insurance agent who can help you determine if you truly need a million dollars in coverage. They can also help you determine the term length and type of policy that would be best for your own circumstances.
- Once you’ve nailed down the details of what you want, call several possible insurers to get rate quotes. Not sure who to call? Check out J.D. Powers annual life insurance study to see who the top insurers are, as determined by customer satisfaction ratings.
- Once you have chosen a company, you’ll be asked to fill out a detailed application that will include questions about your own health and that of your family. Be honest and as detailed as you can. If you are found to lie on your application, your insurer can refuse to pay out on a claim.
- You will probably have to have a medical exam, which can happen at home or your place of work.
- It will take roughly four to six weeks for the underwriting of your policy. You’ll be informed following this if your application has been approved or denied.
- If approved, you’ll write a check for your first premium payment, and your policy will go into effect.
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Qualifying For A 1MM Term Life Insurance – Financial and Medical Requirements
Financial qualifications for life insurance are based on your income, or your spouse’s income if you aren’t working. Life insurance companies use a multiple of your income to determine how much coverage you could qualify for. Below are some guidelines to help you figure out how much life insurance you can qualify for. Note that any policy you have at work will not count in the calculation, but if you have other existing policies that you won’t be replacing with a new policy, that number should be included in the total.
- Under Age 40 – 25 Times Annual Income. You would need to earn $40,000 a year to qualify.
- Age 41-50 – 20 Times Annual Income – You would need to earn $50,000 a year to qualify
- Age 51-55 15 Times Annual Income – $66,000 to qualify.
- Age 56-65 10 Times Annual Income – $100,000 to qualify.
- Age 66-70 5 Times Annual Income – $200,000 to qualify.
- Age 71+ – Based on financial situation.
If you’re buying a policy for estate planning purposes it’s possible that if you don’t meet the income qualifications, that you could qualify based on your assets.
Can I Get $1,000,000 Whole Life Without A Medical?
In reality, you can’t get 1 million of whole life insurance without a medical exam. However, we know of a company that will get your whole life insurance up to $400,000 without having to do a medical test.
You will still need to answer medical questions, but it will not require blood and urine.
You should only consider this option if you have health issues. A medical test is used to determine your health rating. The actual value of a whole life will improve if you get a better health rating.
If you still want to get a non-Medical $1,000,000 whole life, then we would suggest getting $400,000 non-Medical, and then $600,000 in a whole life with a medical.
$1,000,000 Single Premium Whole Life
Another option is to do a Single Premium Whole Life if you have the funds. Because this whole life is paid upfront, many companies will not require a medical exam.
So this way, you will be able to get a $1,000,000 whole life insurance without a medical exam.
Guaranteed Issue Life Insurance $1M Cost
Another option to get a million-dollar policy is a $1,000,000 guaranteed issue policy. Some policies are term some are whole life. The good news is that you will not have to worry about getting approved. If you decide to get a guarantee issue term, the cost will be much cheaper.
$1,000,000 Convertible Term to Whole Life
If you still can not decide on a $1,000,000 whole life policy is right for you. However, don’t hesitate to consider buying a convertible term insurance policy first. This is a fantastic strategy, especially at younger ages.
You can buy a term policy today for $1,000,000 and change that policy into whole life in the future. You can even decide to change only a portion of the $1,000,000 if you do not want to convert the entire term policy. The best part about this is you will not be required to perform any medical exams at the time of conversion.
Check out your $1,000,000 Convertible Term Quote
Tips on How to Shop for $1 Million Term Life Insurance
The first step for shopping for any term life insurance policy is calculating how much coverage you need. You want your life insurance payout amount to take into account your obligations, such as a mortgage, car loan, credit card balances and any other debt you have accumulated. Also, consider additional money you want to leave to cover other financial matters, such as income replacement or paying for college.
Here’s a calculator to help you determine how much life insurance you need.
Next, determine the term of the policy you need. How long do your family and loved ones need the money from the life insurance policy? For example, if you want to get your kids through college in 12 years, you’d want at least a 15-year policy.
Zero in on a term length but also look at longer policy terms for price comparison. It won’t hurt to expand your length if it fits your financial means so that if debts increase or aren’t paid off as fast as you anticipate, the life policy is there for a few more years.
For instance, if you don’t own a house now but plan to buy one with a 30-year mortgage in the upcoming years, it would make sense to expand your search from 15- to 30-year term lengths.
Once you have the policy amount and length of the policy determined, you’re ready to comparison shop for life insurance quotes.
When shopping for quotes for a $1 million term life policy, check if a medical exam is needed. Typically, life insurance companies want you to take a medical exam to understand your health and determine potential life expectancy.
However, recently no-exam life insurance has become more widely available. Note, however, that if you aren’t in very good or excellent health, you may not qualify for these instant policies. Also, not all no-exam companies offer $1 million policies.
It’s helpful to have on hand the following information as you shop for life insurance rate quotes:
- Height and weight
- Family medical history for immediate family, meaning parents and siblings
- Personal medical information, knowledge of past and current health
- Medications, both current and previous
- Lifestyle information, such smoking and drinking
- Dangerous hobbies, such a piloting plans and scuba diving
- Future plans to travel outside the United States
Be sure to be truthful. Misrepresentations during the application process and void the policy in the future.
During the shopping process, check reviews of life insurance companies to make sure the ones you’re considering have a good reputation and the financial strength to pay out if a claim is made.
Do I need $1 million of coverage?
Many people have trouble making an accurate assessment of their coverage needs and end up underinsured. To avoid falling into this trap, financial experts advise that you purchase coverage worth about 10-15 times more than your pre-tax annual income.Another way to figure out how much insurance you need is to multiply your annual salary by the number of years you wish to cover your family’s living expenses. The result might be very close to a million dollars, as this amount of insurance is what many average middle-class households need to be fully protected in case of a tragedy. You don’t have to earn $100,000 a year to choose this amount of life insurance. If you factor in significant debts, like car payments, mortgages, or student loans, you might realize that this solution is right for you.
How much life insurance do you need?
A million or $2,000,000 term life policy seems like a huge life insurance policy. It’s when you take a little time and look at the entire financial picture that you see how quickly it can go.
Consult with a financial planner about replacing your income long term, mortgage, and college for your children – these are just a few examples of how your policy will help protect their financial future.
Contact a licensed agent, and they will take the time to know your specific policy type, gather life insurance quotes from multiple companies, and even help you apply.
Get instant life insurance quotes online by completing the life insurance quote tool on this page to get an idea of rates. Enter your ZIP code to get started.References: