When I first started in the insurance business, I always thought a one million dollar policy was a huge face amount. Who would ever need that much coverage and who could possibly afford it? Nowadays many people ask me for million dollar life insurance quotes. Considering the cost of new homes and college educations, I can see why people need such a high face amount.
I am going to go over one million dollar term life insurance polices and even higher face amounts. Let’s see what these policies really cost and the best ways to apply for them. If you thought that purchasing high face amounts such as $1,000,000 or higher was difficult, it’s not hard at all. These policies are purchased on a regular basis by average Americans. Let’s dive in and investigate these high end policies. We will be looking at $1,000,000 to $10,000,000 life insurance policies. Get ready to learn how to find the best life insurance rates for individual life insurance products.
Did you know that the cost of life insurance has been going down? Million dollar life insurance quotes are cheaper than ever.
Due to the fact that people are living longer than ever, life insurance rates have been going down. It is now cheaper than ever to buy life insurance at an affordable premium. The rates per $1,000.00 of coverage has been going down for a number of years. The risk factor of people having fatal heart attacks and strokes have been drastically reduced. People giving up smoking and eating fattening foods have a lot to do with this increase in lifespan. When the risk factor goes down the premiums go down also.
The cost of living has been going up which in turn creates the need for higher death benefits.
Some of the most common questions I receive are;
How much does a million dollar life insurance policy cost?
What does a 2 million dollar life insurance policy cost?
Approximately how expensive is a 5 million dollar life insurance policy?
When you receive questions like this on a regular basis you know that folks today have a lot of costly financial responsibilities. The request for million dollar life insurance quotes increases on a regular basis.
The first pre-requisite to consider is a term call “Insurable Interest” which is the key ingredient we have to understand.
Applying for life insurance with a high face amount will trigger a red flag. The flag I am referring to is there insurable interest to warrant such a high face amount. This means who will suffer a loss to that degree if the insured dies. They simply want to make sure there is no criminal intent present at the time of the application. Let’s take a look at a very good example we can use. The owner of the policy and the insured is George Brown who is 40 years old.
George makes approximately $40,000 per year as a factory worker. George has approximately $20,000 left on his mortgage with no other outstanding debts. George’s wife Lisa also works and makes about $40,000 per year also. They have two children living at home still in high school with no plans for college.
George wants to apply for a $5,000,000 Term life policy and nominate his wife Lisa as the beneficiary. The first question the company considers is George’s wife going to suffer a $5,000,000 loss if George dies? The answer to this question is probably not and the loss won’t even come close. This scenario shows that George is planning on over insuring himself. Is there possible criminal intent here where George wants commit suicide and Lisa collect the money?
Is Lisa contemplating over insuring her husband and then planning on murdering him? Who knows, but this scenario will definitely raise a flag. George will have to indicate why his family will encounter such a high loss if he dies.
The first hurdle is to be able to prove your beneficiary will actually need the requested face amount. As long as your request is reasonable, there should be no problems.
What if I have medical conditions and apply for a 2 or 3 million dollar life insurance policy?
Having any medical conditions when applying for multi-million dollar policies would work exactly the same as a lower face amount. The risk of your health concerns would be taken into consideration by the underwriting team. If your conditions are severe, you could end up paying more for the added risk the company is taking. If you fall into a high risk life insurance category, a company that is liberal for health conditions should be used. This would simply take a pre-screening process to see what company would be the most applicable. Applying for a 1, 2, 3, 4 or 5 million dollar policy would be no different than a $100,000 policy.
$1 Million to $2 Million Dollar – 20 Year Term life insurance quote samples.
Let’s take a look at some sample premiums for a very common Term life insurance policy with a 20 year term period. The 20 year Term policy is the most commonly purchased plan design in the United States. We will use a healthy 35 year old male in a “preferred non-smoker” rate class and we will use the top 6 carriers.
$1,000,000 Face Amount:
John Hancock – $568.00
Banner Life – $583.99
American General – $584.00
Protective Life – $585.00
SBLI Life – $593.00
Principal National – $594.00
As you can easily see, the premiums for this 35 year old male are probably a lot less than you expected. The big advantage of these high face amount policies are in the use of the cost saving life insurance rate bands.
Purchasing 20 years of coverage with a $1,000,000 face amount is really inexpensive. You can even purchase a policy like this with a “return of premium” rider. These policies will pay back all premiums after the term period.
$2,000,000 Face Amount:
John Hancock – $1,060.00
American General – $1,104.00
Banner Life – $1107.98
Principal National – $1,113.00
Protective Life – $1,115.00
SBLI Life – $1,136.00
Did you know that the more life insurance you buy the lower the cost may be like buying in bulk?
I am sure you have heard of buying in bulk to save money. This holds true in life insurance also. This theory revolves around insurance terminology called “rate bands“. The concept is all about discounts that are given to batches of life insurance purchased. Take a moment to read our blog post concerning taking the advantage of rate bands. Using these rate bands to your advantage so you can receive best life insurance quotes.
Let’s take a look at a sample of premiums based on $1, $2, $3, $4 and $5 million dollar face amounts of Term life insurance.
For example purposes we will use a 30 year old male with a “preferred non-tobacco” rate class for 20 years. We will use Banner Life for the life insurance company.
$1,000,000 – $555.68
$2,000,000 – $1,051.36
$3,000,000 – $1,547.04
$4,000,000 – $2,042.72
$5,000,000 – $2,538.40
$10,000,000 – $5,016.80
As you can see the Term life insurance rates can be very reasonable. Especially when taking into consideration the high face amounts. The $1,000,000 term policy at a cost of $555.68 would be very affordable for most Americans.
Laddering your policies from $1,000,000 to $2,000,000 to $3,000,000 to #4,000,000 to $5,000,000
Here is a great tip for you! If you need a multi-million dollar face amount. You do not have to make up the full face amount on one policy because you can ladder your policies. This could save you thousands of dollars in the long run. For example is you need a face amount of $3,000,000 you can simply have more than one policy. If you needed a death benefit of $3,000,000 for 10 years and then only $1,000,000 for the following 10 years you can purchase two policies.
In essence you would have one policy with a face amount of $2,000,000 and another policy for $1,000,000. One policy would be a 10 year Term policy for $2,000,000 and another for $1,000,000 with a Term period of 20 years. After the first policy drops off after 10 years, you would still have the second policy for the next 10 years. This way you are not paying for the full $3,000,000 for the full 20 year period.
Laddering your policies can work for anyone, not just people looking for high face amounts in the millions. That is the good part about low cost Term life insurance.
Your health history will be the single most important factor deciding your rates.
If you are in good health, you will be able to qualify for the very best rates. If you have any health conditions a medical pre-screen can filter out what company would be best for you. The rate classes are normally referred to as “Preferred Plus”, Preferred” “Standard Plus” and “Standard”. For more information on the rate classifications, check out our very informative blog post “rate classifications“. Let’s check out some rates for our 30 year old male again with a $1,000,000 face amount. This illustration with be for 20 years and see how they fluctuate between health classes. You will see how million dollar term life insurance quotes can go from one extreme to another. When people are in poor health, they will be placed in a high risk life insurance classification.
Preferred Plus – $409.14
Preferred – $555.68
Standard Plus – $669.23
Standard – $794.99
Let’s include three table ratings also. The table rating scale runs from letter B – J depending on how poor your health is.
Table Rating B – $973.85
Rate Table Rating E – $$1,430.77
Table Rating J – $2192.31
As you can see our example showed a variation in premium from $409.14 all the way to $2192.31.
Did you know that smoking cigarettes can increase your premiums by over 200% or more?
If there was any sure fire way of increasing life insurance rates, it is smoking with no close second. If you are looking for the best life insurance rates, whatever you do don’t smoke! Using tobacco products of any kind is bad for your health. Smoking cigarettes will destroy your health and inflate your premiums like a high pressure balloon. There are companies that are more liberal with smoking but your rates are still going to be much higher. Check out our smoking related blog post if you smoke for more information in detail concerning smokers rates.
What kind of life insurance should I plan on applying for ?
You have a choice of three major types of life insurance which is Term, Universal Life and Whole Life. The only plan design to be concerned with primarily is low cost Term life insurance. Universal and Whole life will cost much more and not be practical or cost effective. You can run quotes on our Whole Life vs. Term Life calculators just to see what I mean. When you are planning on purchasing higher face amounts there will be no other logical choice other than Term life.
If you need any help deciding what your face amount (death benefit) should be, feel free to use our face amount calculator. Take you time and carefully decide how much life insurance you should apply for. You don’t want to be under insured or over insured either.
Choosing the correct life insurance company is crucial to getting the lowest life insurance rates.
All life insurance companies underwrite their applications differently than one another. This is why choosing the most applicable company is so important. What company might be the best for Bill may not be the best company for Betty. We use over 40 trusted companies to shop the market for the lowest rates for our clients. Some of the most competitive companies are, John Hancock, Protective Life, Banner Life, SBLI, Transamerica, AXA, & Mutual of Omaha. We also use Minnesota Life, North American, American National, Nationwide and Lincoln Financial for some of the lowest rates. If your health is below average the Prudential Life insurance company does a great job for high risk life insurance.
If you are considering applying for a new life insurance policy and have any questions, don’t hesitate to call us. We will answer any of your questions with no cost or obligation. Take a moment to read our “About Us” page to learn more about us and our business.
You can begin comparing the best rates for million dollar life insurance quotes by using the form on this page. We can help you make sense of the many options available to you and give you peace of mind you should have. Thank you very much for taking the time to read our blog post!