You probably did not know that the more term life insurance you buy, the rate per thousand keeps going down
If this sounds too good to be true, keep on reading and we will show you how to effectively receive the lowest rates
If you believe that purchasing a high face amount policy is expensive and hard to do, 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 polices and even much higher face amounts. Let’s see what $1,000,000 to $10,000,000 policies really cost and the best ways to apply for them.
Take a moment to read our life insurance rate band article.
Use our quote engine to compare quotes up to $10,000,000 and see for yourself
Every company has their own set of rates and the life insurance rates are regulated by law. This means nobody can sell the exact same product for more or less than another. In fact all insurance rates are regulated by law. Each companies rates vary by age, gender, health status and many other variables. Some companies have better rates for smokers vs other companies and so on.
Most Americans have a much higher cost of living than ever before and need higher face amounts
Also due to the fact that 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 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 will also go down.
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 quite often.
- 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?
- Who needs a million dollar policy anyway?
- How much is a 30 year $1 million dollar life insurance policy?
Having an “insurable interest” is a requirement you should understand
Applying for life insurance with a very high face amount will trigger a red flag. The flag I am referring to is insurable interest to warrant such a high face amount. This means who will suffer such a high 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. In this example, we will our man George who is 40 years of age.
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.
This example shows a lack of insurable interest
George wants to apply for a $5,000,000 Term life policy and name his wife Lisa as the beneficiary. The first question the company considers is George’s wife going to actually suffer a $5,000,000 loss if George dies? The answer to this question is probably no and the actual financial loss won’t even come close to that. This scenario shows that George is planning on over insuring himself.
Is there possible criminal intent where George wants to commit suicide and Lisa collect the money?
The carriers have to be concerned with possible foul play when working with multi-million dollar policies
Is Lisa contemplating over insuring her husband and then planning on murdering him? Who knows, but this scenario will definitely open an underwriters eyes to that question. George will have to prove 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 million dollar term life insurance policy?
Having any medical conditions when applying for a multi-million dollar policy 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.
$1,000,000 – $2,000,000 sample rates
Let’s take a look at some sample premiums for a very common Term 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.
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.
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
Let’s take a look at a sample of premiums based on $1, $2, $3, $4 and $5 million dollar face amounts of Term 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 will also save you some money
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 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. 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.
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 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 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 can increase your rates by over 300%?
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 life insurance rates.
What kind of life insurance should you 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 life is the modern form of permanent life insurance. It will never terminate unless you stop paying the premiums and let it lapse. The problem with whole life is it will cost much more and just 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 insurance.
If you need any help deciding what your face amount (death benefit) should be, feel free to use our face amount calculator. Always take your time and carefully decide just 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 best life insurance rates
All insurance companies underwrite applications differently than another. 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. We use over 40 of the top life insurance companies to shop the market for the lowest rates.
Don’t hesitate to pick up the phone and call us with any questions
There is no 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 if you decide to apply. Purchasing million dollar term life insurance 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,