Who needs million-dollar life insurance?

Million dollar life insurance can provide a large death benefit to ensure that your family is financially protected after you pass. When calculating how much life insurance you need, you should consider your debt, income, housing, and your children's education. However, to qualify for million dollar life insurance, you may need to meet eligibility requirements regarding your age, income, and health.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Dec 19, 2021

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Quick Facts

  • Many people do not need a million-dollar life insurance policy, but you can calculate how much coverage you need by considering your debt, income, housing, and children’s education
  • You may need to meet specific requirements regarding your age, income, and health to qualify for a one million dollar policy
  • Buying a one million dollar term life insurance policy is less expensive than most people think but increases with age and term length

When preparing to buy life insurance, you may be wondering how much life insurance you need to purchase. Taking the time to evaluate your finances and to determine an accurate estimate of how much life insurance you need is essential to protecting your family’s finances.

If you believe you need a large death benefit to keep your family afloat after you pass, read more about million-dollar life insurance below to determine if it may be right for you.

Enter your ZIP code into our free quote comparison tool above to get life insurance quotes from companies in your area.

Who needs a one million dollar life insurance policy?

When you purchase life insurance, you should understand how to calculate how much coverage you need.

To begin your calculations, you can add five to ten times your annual income. You could stop here and use this as a rough estimate for the amount of coverage you need, but you may also want to explore a more in-depth financial analysis to get a more accurate estimation.

Using the DIME method can help you dive in. DIME stands for debt, income, mortgage, and education. With this method, you calculate the total value of your debt, ten times your annual income, the balance of your mortgage or future housing, and the estimated amount needed for future education.

Some other expenditures you may want to consider covering with your death benefit include final expenses and funeral costs, medical fees for a child or spouse, childcare charges, and day-to-day or unexpected expenses for your family.

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Do I qualify for a million dollar life insurance policy?

Not all life insurance companies will hand over million-dollar life insurance policies without proof that it is a reasonable amount of coverage for you.

You may need to meet specific qualification requirements before you’re able to purchase a policy with a significant death benefit. Some of the factors that will affect your eligibility include your income, age, and health status.

Because life insurance is meant to replace your income instead of increase it, the life insurance company may review your income replacement needs. For example, some companies will allow you to purchase up to 20 to 30 times your annual income.

If you need a large death benefit, it is better to purchase your life insurance policy at a younger age. Once you reach a certain age, some policies and coverage amounts may become unavailable to you, and million-dollar life insurance rates may increase drastically.

Higher coverage amounts can also become unavailable if you are not in good health. You will likely need to pass a medical examination to purchase a policy with a one million dollar death benefit.

How much is a one million dollar life insurance policy?

How much is a million-dollar life insurance policy? The cost of a million- dollar life insurance policy will vary based on many different factors. Let’s begin by looking at the average price of a million-dollar term life insurance policy by age:

Average Annual Rates for a $1 Million Term Life Insurance Policy
Age10-Year Term20-Year Term
35$302$488
45$547$1,106
55$1,496$2,744
65$4,325$8,925
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As you can tell from the table above, the million-dollar life insurance cost will increase as you get older. It will also inflate if you choose longer term lengths.

Here are some additional rates that will also disclose the increase with age:

  • How much is a million dollar life insurance policy for a 50-year-old man? $870 to $1,688 per year
  • How much is a million dollar life insurance policy for a 60-year-old man? $2,436 to $4,739 per year
  • How much is a million dollar life insurance policy for a 70-year-old man? $7,089 to $16,200 per year

However, if you purchase a one million dollar life insurance policy at a younger age, you are likely to pay somewhere between $25 and $40 per month, which is less than what most people think these policies cost.

What type of life insurance is best?

The rates above are based on a term life insurance policy. Term life insurance is a non-permanent life insurance policy that has fixed rates for the entire term.

Therefore, if you are young and in good health, you could purchase a million dollar term life insurance policy to lock in an affordable rate for terms generally between 10 and 30 years.

You may also buy some type of permanent life insurance policy, such as whole life insurance or universal life insurance. However, these policies are more expensive even with smaller death benefits; therefore, a one million dollar policy may be beyond some people’s budgets.

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Where can I buy million-dollar life insurance?

Even though many people don’t need to purchase life insurance with a significant death benefit, it is relatively easy to find a million dollar life insurance company.

Fidelity Life provides term life insurance for people between the ages of 18 and 65 with coverage amounts up to $2 million. It also offers optional riders to make it easy to customize your policy.

Haven Life offers similar term life insurance options for people up to age 64. Its coverage amounts go up to $3 million, and policies include an accelerated death benefit.

New York Life provides a term life insurance that starts at $1 million in coverage. However, you can only purchase this in 10-year terms.

If you need help finding affordable million-dollar life insurance, enter your ZIP code into our free quote comparison tool below to find a company near you.

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