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BLOG 05/22/2020

How much is a 1 million dollar life insurance policy?

One million dollars: Sounds like a lot, right? For most of us, a million dollars is a huge sum of money – one that could help take care of a lot of necessary expenses and bills for our loved ones if needed.

Wondering if your family needs that kind of financial protection? And how much is a 1 million dollar life insurance policy, anyway? Here’s what to know about life insurance that’s worth 1 million dollars – and how much that kind of life insurance policy costs.

Do I need a 1 million dollar life insurance policy?

As the name suggests, this type of life insurance provides a $1 million cash payout to your family to help them replace your income, pay debts, and cover any other expenses. That payout can allow your family to focus on final expenses and taking care of themselves, rather than worrying about financial challenges once you’re gone.

Ask yourself: If you weren’t there to provide for your family, what would your life insurance need to cover? Different costs to consider include:

  • Daily expenses, like food and transportation
  • Housing payments
  • Caring for dependent children or family members
  • Future college or education expenses
  • Credit card or other debt
  • Outstanding student loans
  • Funeral and other end-of-life expenses

While there are no hard and fast rules, it’s recommended you get a policy that has a payout seven to ten times your current income. If you’re one of the nearly one in 10 Americans who earn $100,000 per year, that means it might take a million dollar policy to cover your family’s expenses.

Your insurance plan’s coverage also depends on factors like your income, which helps determine how much you qualify for when it comes to a payout, and the amount of savings or other assets you already have on hand. Try our term life insurance calculator to find the right coverage amount for your needs.

How much does a $1 million life insurance policy cost?

It may sound expensive, but a million dollar life insurance policy is probably more affordable than you think. Over half of Americans overestimate the cost of term life policies by more than triple in many cases, and that perception remains true for a million dollar policy. In fact, a healthy 30-year-old man could pay as little as $14 per month for a million dollars in life insurance.

Certain factors can affect how much you’ll pay, including your age, your overall health, and the length of the policy. Different insurance companies may offer you different rates, which is why it can pay to shop around when you’re looking to make a purchase such as term life insurance. At eFinancial, we work with more than 20 insurance companies to help you find the right fit for your needs and budget. Start by seeing your personalized price for a million-dollar policy here.

Can anyone get a million dollar life insurance policy?

As long as you can show a financial need for the policy, you may qualify for a million dollars in life insurance coverage with some insurers. Before you apply, it’s important to remember that life insurance isn’t designed to increase your family’s wealth but to protect what you already have, so you’ll want to be smart about the policy size you actually need.

Factors like income, age, and health status could impact your eligibility for life insurance. So buying a policy to replace a reasonable multiple of your income, securing coverage at a young age, and being able to demonstrate good health are all ways to boost your chances of approval for a million dollar life insurance policy.

Find coverage that provides peace of mind

You don’t need to be the typical tycoon to get protected like one, especially when you consider the true insurance policy cost. A million dollar policy can be a cost-effective part of your financial planning that will go on to ensure peace of mind and protection for your entire family, no matter what happens.

 

At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.