If you think that purchasing million dollar life insurance policies is expensive and hard to get approved, you are in for a pleasant surprise. This can be a smooth process if you apply with the most applicable carrier and have an experienced agent helping you. In essence, all you are doing is adding some extra zeros to the application.
We will go over one million dollar term life insurance policies and even much higher face amounts. Find out what $1,000,000 to $20,000,000 policies cost and the best ways to apply for them.
Table of Contents
- How Much is a Million Dollar Life Insurance Policy?
- How Difficult Is It to Purchase a $1,000,000 Policy?
- What Is an Insurable Interest?
- How Do You Use Rate Bands to Reduce Your Premiums?
- Who Needs a Million Dollar Life Insurance Policy?
- Frequently Asked Questions
- Examples of Multi-Million Dollar Life Insurance Policies
- How Do Health Classifications Impact Life Insurance Rates?
- Can Medical Conditions Affect My Rates?
- Can Laddering Life Insurance Policies Lower My Premium?
- Can Cigarette Smoking Affect My Application?
- What Type of Life Insurance Should You Apply for?
- What Insurance Company Has the Best Rates?
- How Can I Compare Million Dollar Life Insurance Quotes?
- Using an Independent Agent (Broker) vs a Captive Agent
- Can a Medical Pre-Screen Help Me Find the Best Rates?
- How Do I Apply for a Million Dollar Life Insurance Policy?
- In Conclusion
It is not difficult at all to buy a one million dollar life insurance policy. All you have to do is have a need for a $1,000,000 policy, an insurable interest in having one, and the ability to pay the premium and you are good to go. The application process will work the same with the exception of a slightly more rigid physical exam depending on what the requested face amount is for. Other than that, it is just as easy as purchasing a small $100,000 policy for example.
Applying for life insurance with a very high face amount will always raise a concern with the life insurance companies. The question I am referring to is an insurable interest to warrant such a high face amount. This means who will encounter such a high degree of a financial loss if the insured dies and also why. 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.
In this example, we will use Jeff who is 40 years of age. Jeff makes $45,000 per year as a factory worker. Jeff has approximately $4,000 left on his mortgage with no other outstanding debts. Jeff’s wife Lisa also works and makes $40,000 per year. They have two children no longer living at home that are out of college and married.
Lisa decided to purchase a $3,000,000 life insurance policy for her husband where she will be the owner and beneficiary. She will have to prove why she needs such a high death benefit when her husband’s loss of income is only $40,000 per year. She is requesting to drastically overinsure her husband with such a high face amount. If she has a valid reason, no problem, the insurance carrier will approve the face amount request.
Having any medical conditions when applying for million dollar life insurance policies would work the same as a lower face amount. The risk of your health concerns would be taken into consideration by the underwriters. 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.
I have never met a consumer that knew what a rate band was. Most agents never take to time to mention them less explain them in detail. Using rate bands to your advantage can be the goose that laid the golden egg. Premiums for life insurance are broken down into a series of rate bands which means volumes of coverage. The more you apply for can place you into these discount volumes which reduces your premiums because you can buy in bulk in other words.
Take a moment to read our life insurance rate band blog post to learn more about discount buying.
Our website quoting system will display million dollar life insurance quotes with a face amount up to $10,000,000.
Many people today need million dollar life insurance policies due to high inflation and cost of living. Because people are living longer than ever, insurance rates have been steadily going down. It is now cheaper than ever to buy million dollar term life insurance at an affordable premium. The risk factor of people having fatal heart attacks and strokes has 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, premiums will go down.
Some of the most common questions we often receive.
- How much does 1 million dollar term life insurance cost?
- What are the best quotes for 2 million to 3 million dollars of coverage?
- How much does a 2 million dollar face amount cost?
- What are the best quotes for 4 to 5 million dollars?
- How much does a 10 million dollar policy cost?
- Approximately how much is a 5 million dollar life insurance policy?
- What are the best million dollar quotes?
- Do I need a million dollar policy?
- How much does a 30 year 1 million dollar life insurance policy?
Just for example purposes, we will use a 30-year-old male with a preferred non-tobacco rate class for 20 years. We are using Banner Life for the illustration. These premiums are per year:
- $1,000,000 – $489.99
- $2,000,000 – $919.98
- $3,000,000 – $1349.97
- $4,000,000 – $1,779.96
- $5,000,000 – $2,209.95
- $10,000,000 – $4,359.90
- $15,000,000 – $6,509.85
- $20,000,000 – $8,659.80
Health classifications totally control the fate of your premiums. Here are examples of $1,000,000 life insurance policies being displayed with the basic health classifications. We will use the 30-year-old male with a 20-year term policy as we did above.
- Preferred Plus Non-Tobacco – $401.44
- Preferred Non-Tobacco – $489.99
- Standard Plus Non-Tobacco – $653.89
- Standard N0n-Tobacco – $743.83
- Preferred Smoker – $1,509.89
- Standard Smoker – $2039.88
The Standard Smoker rates class costs over 400% more than the Preferred Plus Non-Tobacco class.
If you need a million dollar life insurance policy or higher. You do not have to make up the full face amount on one policy because you can simply “ladder your policies”. This could save you thousands of dollars in the long run. For example, if you need a face amount of $3,000,000 you can simply have more than one policy.
If you need 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. You would then 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. Laddering life insurance policies are also referred to as layering policies.
If there was any surefire 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 very costly when buying life insurance. Smoking cigarettes will destroy your health and inflate your premiums to the point where they are not even affordable for most people.
Some companies 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’ life insurance rates.
You have a choice of three major types of million dollar life insurance:
Term Life Insurance – By far, term life insurance is the most popular form of life insurance in America and the most cost-effective also. Term insurance is a temporary type of life insurance that has available terms periods of between 10-40 years. It can also be converted to permanent insurance at a given point during the policy period. Virtually all of the million dollar life insurance policies sold are based on the term insurance chassis.
Permanent Life Insurance – Permanent life insurance products are policies that stay in force for the rest of your life as long as you maintain the premiums. The most affordable and cost-effective product is known as universal life insurance. Whole life is not cost-effective in today’s market and many companies have dropped it from their product lines.
Non-Med Life Insurance – These products are also referred to as “no medical exam life insurance“. This means no medical exam is required if you are reasonably healthy. Non-Med policies do cost more because the companies are not collecting all the information they would normally review if you would have taken a medical exam. The companies, in reality, are taking a higher risk of not knowing as much about your health history.
In reality, there is no one life insurance company that has the best rates. This will depend on many variables such as your age and health among others. All insurance companies underwrite applications differently than others. This is why choosing the most applicable company is so important. What company might be the best for one person may not be the best company for another person? This is especially true if you have medical conditions, hazardous sports, or a high risk occupation.
We use over 40 of the most competitive life insurance companies so we can shop the market for the lowest rates and cover all our bases. We use the most applicable company that will offer our specific applicants the lowest rates. This is done on a case-by-case basis.
Comparing million dollar life insurance quotes is simple with our instant rate comparison tool built into our website. You can run quotes from $1,000,000 all the way up to $10,000,000. You will quickly be able to find what company has the lowest rates specifically for you. Keep in mind that you will need to speak with an experienced insurance agent to determine what company you should apply with. This will be determined by a quick medical pre-screen if you have any medical conditions that could affect your rates.
You have the choice of two different types of agents to help you buy life insurance. They are independent agents otherwise known as brokers and captive agents that represent only one company such as State Farm. The independent agent (such as ourselves) does not work for an insurance company. We have our client’s main interest in mind where the captive agent works for his or her insurance carrier. The captive agents have to have their companies main interest in mind.
As an independent agent, we have access to over 40 top-rated life insurance companies whereas a captive agent only has one. Needless to say that an independent agent has a huge advantage in finding the lowest rates for their clients.
Running a quick 5 to 10-minute medical pre-screen can definitely help you find the best rates. It can do a lot more than that by eliminating the chaos of your agent running into additional medical conditions in your medical history that is revealed by your doctor or the Medical Information Bureau. When this happens, the rates you thought you were going to receive are going to change. All of this information is going to be directed at initially choosing the right company to apply with.
Applying for a million dollar life insurance policy is very easy. We always recommend applying over the telephone to save a lot of time. You can still apply online or with a paper application, but the telephone application process is the only way to go. All you have to do is sit back and listen to the questions and then answer them. You can easily explain all your answers in detail so there is no room for a communication breakdown. It is also impossible to miss a question on the application like it was on the paper applications from years ago.
There is never any cost or obligation for our help and you are welcome to contact us 7 days a week. We can show you how to identify the best rates and have total confidence when you decide to apply. Purchasing a million dollar life insurance policy should always be a simple process.
Especially when you have an experienced independent insurance agent who specializes in life insurance helping you every step of the way.
All the best,
You can set up a specific date and time to discuss all your options and find out how to get the lowest rates on million dollar life insurance policies.