The cost of a million-dollar life insurance policy is determined by several criteria, including your age, gender, and health. The type of coverage you purchase and the length of time you want it to last will also have a significant impact on prices. However, term life insurance plans with a $1 million death benefit normally last between 10 and 30 years.
Furthermore, while $1 million in life insurance may appear to be pricey, it is useful for individuals who work, provide for their families, have several dependents, or earn a high salary. Continue reading to find out more about where to buy a million-dollar life insurance policy and how much it can cost to pay for one.
How Much Does a Million-Dollar Life Insurance Policy Cost
According to a survey of term life insurance prices, a million-dollar life insurance policy with a 10-year term can cost roughly $306 per year, while a 20-year term costs about $482. These rates are calculated using a healthy, nonsmoking 30-year-old as the base. Furthermore, age and medical history are risk variables that influence the cost of a $1 million life insurance policy. Smoking, dangerous hobbies, or hazardous work can all affect your life insurance rates.
Factors that Affect the Cost of a Million-Dollar Life Insurance Policy
Many factors determine how much the yearly or monthly premiums for a million-dollar life insurance policy will cost. Some are under your control, while some are not. These include your gender and age, general health, occupation and way of life, and the kind of policy you would like.
All life insurance policies, particularly those that pay death benefits of $1 million or more, do not have a “one-size-fits-all” policy. Moreover, make sure you investigate every one of your possibilities. Let’s illustrate a few of these factors.
Age and Health
Younger individuals with good overall health pay lower premiums for life insurance compared to older individuals with pre-existing medical conditions. Regular medical exams and staying fit are essential for securing low-cost life insurance. Also, older individuals pay higher premiums due to increased medical care requirements. Federal and state regulations limit insurance rates, and some plans require no medical exam.
Gender
Many life insurance policies have gender as an underwriting criterion, but not all do. Certain state governments forbid gender-based pricing because they view it as discriminatory. Women pay less than males in states where premium rates are determined by a person’s gender. Although women may initially have cheaper premiums, if they develop certain medical issues or participate in risky behaviors like smoking or binge drinking, their rates may climb. For couples who purchase combined plans, several insurers provide savings
Type of policy
There are two primary types of life insurance policies including term life insurance and permanent life insurance. Term life covers a fixed period, with lower premiums but no cash value benefits. Permanent life offers indefinite protection with a cash value component that grows with age but is more expensive. It includes features like long-term care or disability riders. Moreover, you can consider your budget, credit card debt, living expenses, and financial goals when choosing the right policy.
Lifestyle and occupation
It’s crucial to take occupation and lifestyle into account while looking for million-dollar life insurance coverage. Travel, drinking, smoking, high-risk pastimes, and profession can all affect premiums. A line of work may have a significant impact on how much a million-dollar policy will cost. Individuals working in hazardous or high-risk occupations will be required to pay greater premiums than those in more relaxed employment.
Drinking and smoking behaviors also have an impact on premium expenses. Smokers pay more than nonsmokers since they are more likely to develop conditions like cancer or heart disease. Similarly, heavy drinkers may face higher costs because of their increased susceptibility to alcohol-related illnesses such as diabetes and liver disease.
Coverage amount
Two additional major cost considerations are the desired degree of coverage and the policy’s length. Term life insurance rates increase as the policy’s tenure increases. The cost will rise with the length of the contract. When deciding on coverage amounts, make sure to consider all of your current financial obligations, including balloon payments, retirement bills, and college tuition.
Length of policy
You have a few choices when deciding on the length of the policy term. Short-term insurance offers temporary coverage for one to five years at a cheaper cost than longer-term policies. When payments are made consistently, whole life insurance can extend long-term coverage by up to 30 years. Because of their extended tenure, these policies have higher premiums, but larger death benefits.
Every three to five years, you should check your insurance to make sure the coverage you’re paying for still meets your needs. Marriage, family formation, career changes, and retirement may necessitate modifications to coverage or term length. Your policy will cost you a large deal of money.
How to Get a Million-Dollar Life Insurance Policy Cost
The insurer requests information when you apply for any type of life insurance policy, including: Do you need this much coverage? Insurance companies usually want evidence of income as part of the application process to respond. You will be eligible for coverage from most firms up to a maximum of 10 to 30 times your yearly pay. Moreover, if you choose to purchase a life insurance policy that has a cost of a million-dollar or more, you may be required to provide additional financial information.