How Much Does a Million-Dollar Life Insurance Policy Cost?
A healthy 60 year old male may have to pay around $420 per month for a 1 million dollars 20-year term life insurance policy. On the other hand a 60 year old female with no major health issues can pay around $250 monthly for the same $1,000,000 life insurance policy. Get a quote!
Depending on your age, previous medical history, and present health status, the cost of a one million dollar life insurance policy can vary a lot, so it's best to shop around and get several quotes from industry experts.
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Although for many people, $1 million or more worth of life insurance may be too much, there are many reasons why a person would want to consider this amount of term life insurance:
- You may be a parent that wish to leave your spouse enough money to pay the mortgage, get the kids through college, and live a comfortable life.
- You may be a high-net-worth individual that needs the insurance policy to cover estate taxes, final expenses, outstanding debts, etc.
"A one million dollar life insurance payout provides a quick infusion of tax-free money to pay off bills and estate taxes."
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Do You Need a Million Dollar Life Insurance Policy?
When determining your life insurance needs, experts recommend getting a policy worth 5-15 times your annual income. For high earners making $100,000 or more, a $1 million policy may be appropriate.
Consider these factors when deciding if $1 million in coverage is right for you:
Income level - The higher your pay, the more coverage you likely need. Those earning $100k+ may benefit from $1 million.
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Future costs - Do you expect large future expenses like multiple college tuitions? That increases the amount of coverage to consider.
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Spousal income - If you're the sole breadwinner, would your spouse need to replace your income?
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Homemaker's value - Calculate the worth of domestic services like childcare provided by a stay-at-home spouse.
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Existing debts - Factor in debts like a mortgage that would still need repayment.
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Financial goals - Consider your family's financial aims and needs if you were no longer able to provide.
Let's take the example of a man, father and husband, who earns $80,000 each year and wishes to take care of his family financially. To do this, he requires a minimum 1 million dollar life policy to 1.5 million.
Assuming that 1 million will generate an average of 5% interest per year, this would equate to a sum of $50,000, the 1.5 Million would net around $75K. As such, there would be no requirement to deplete the principal.
There is an argument however that a figure greater than $1 million will be required because currently it's very difficult to find anywhere which would offer returns of 5%. Perhaps he would need a 2 million to 2.5 million dollar life insurance policy.
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Example best rates for a 20 year term, 1 million dollar policy, 2 million dollars, and 3 million dollars.
The monthly premium costs below are for a male who is in excellent health and is a non-smoker. Do note, however, that a man or woman with a poor health history, smoker, or current medication use can potentially increase the premium.
| Age | 1 Million Dollars | 2 Million Dollars | 3 Million Dollars |
| 20 year old man | $35.25 per month | $65.64 | $99.50 |
| 30 year old male | $38.20 per month | $71.45 | $103.85 |
| 35 year old man | $41.85 per month | $78.62 | $115.20 |
| 40 year old male | $55.45 per month | $108.96 | $160.72 |
| 45 year old man | $108.77 per month | $210.45 | $312.87 |
| 50 year old man | $154.35 per month | $302.55 | $451.50 |
| 55 year old male | $265.93 per month | $524.39 | $782.33 |
| 60 year old man | $429.45 per month | $848.57 | $1,271.85 |
| 65 year old male | $903.35 per month | $1,798.75 | $2,694.30 |
| 70 year old man | $1,595.84 per month | $3,191.25 | $4,785.68 |
10/22/2024 - These typical premiums are just estimates. Your average costs will most likely be different.
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Example Life Insurance Costs for Women in their Sixties
The monthly prices below are for a woman in good health, non-tobacco user.
| Age | $1,000,000 10 Year Term |
1 Million Dollars 15 Year Term |
$1,000,000 20 Year Term |
1 Million Dollars Age 90 Guaranteed |
| 60 year old female | $248.06 per month | $347.40 | $471.33 | $1,062.59 |
| 61 year old woman | $272.74 per month | $386.74 | $539.47 | $1,122.79 |
| 62 year old female | $296.22 per month | $426.86 | $609.17 | $1,182.18 |
| 63 year old woman | $347.28 per month | $476.42 | $695.28 | $1,238.80 |
| 64 year old female | $378.14 per month | $528.43 | $777.19 | $1,297.27 |
| 65 year old woman | $415.83 per month | $578.65 | $861.48 | $1361.47 |
| 66 year old female | $464.75 per month | $652.13 | $1,085.36 | $1,422.24 |
| 67 year old woman | $520.95 per month | $715.66 | $1,174.53 | $1,495.64 |
| 68 year old female | $583.52 per month | $815.98 | $1,235.84 | $1,562.64 |
| 69 year old woman | $653.15 per month | $994.99 | $1,349.38 | $1,632.27 |
10/22/2024 - These average premiums are just examples. Your prices will be different.
What are the eligibility requirements for a 1 million dollar policy?
Getting approved for a million dollar life insurance policy can be challenging, as insurers consider various factors when assessing eligibility and pricing.
Key criteria include:
Age - Life insurance rates are heavily influenced by age, since younger people are statistically less likely to pass away during the policy term. Those under 40 may have better chances of qualifying for high coverage amounts.
Income - Your income plays a role, but isn't necessarily determinative. Even lower earners may get approved if they demonstrate a clear need for the death benefit amount. However, high earners have an easier time justifying large policies.
Health - Good health is essential. Insurers will thoroughly review medical records and likely require a physical exam. Any major health conditions or chronic illnesses can lead to denial or reduced coverage offers.
Existing Coverage - Applying for additional policies when you already have life insurance can impact eligibility. Insurers will factor in your total existing coverage when deciding on new policy amounts and terms.
The key is being able to justify the high death benefit amount based on your financial situation and insurance needs. While getting a million dollar policy isn't impossible, it requires meeting strict eligibility requirements regarding age, income, health, and existing coverage.
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Will Medication Cause a Denial of Coverage?
If you take medication for diabetes, high cholesterol, or high or low blood pressure, you can still qualify in most cases. If your cholesterol or hypertension is well controlled, there is a still a reasonable possibility to qualify for the preferred rate classes, which are similar to the rates given in the table above.
With regards to diabetes, providing it’s well controlled and there are no additional medical issues, standard rates are easily obtained. Preferred (best) rates are also obtainable providing the diagnosis is recent with a low a1c, and you are not above the age of 55.
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.
No matter your age, 30, 40, 50, 60, 70, etc. It is easy to find out typical policy costs by clicking here!
Nevertheless, certain medical conditions can, of course, push you outside the preferred rate status.
Those medical conditions include the following:
- History of heart disease (heart attack, bypass, stents, etc.)
- Cancer
- Obesity
- Occupation, hobbies or regular travel which is hazardous in nature
Consider a 20 year term, $2 million policy for $847 monthly premium. There can be no argument that if you can afford the $847 monthly premium, this would make for an excellent investment.
Taking the scenario that you are 60 years of age and you invested in the $2 million 20 year term policy, and you lived for a further 10 years, your investment into the policy over that 10 year period would be just over $101,000. This equates to an internal rate of return at 63% per annum!
Looking at this same scenario from another angle. If you lived to 75, the rate of return would be some 32%, and if you lived to 80, the rate of return would be 20%.
There's no doubt that this makes for a fantastic investment and there's little chance you could possibly emulate this with any other type of investment vehicle.