What factors affect the cost of a million dollar life insurance policy?

Several factors can impact the cost of a million dollar life insurance policy such as age, gender, health, occupation and lifestyle.

How Much Does a Million Dollar Life Insurance Policy Cost?

A $1 million life insurance is a type of policy that offers a larger death benefit payout. This level of coverage can be more costly, but it can be helpful if you need to replace a large income or if your loved ones will have significant financial needs in your absence. This article will explain how much a million dollar life insurance policy costs, including factors that can impact premiums and situations where getting one may make sense.

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What is a million dollar life insurance policy?

A million dollar life insurance policy pays out a death benefit of $1 million to your beneficiaries if you pass away during the policy term. In exchange, you can pay premiums monthly or yearly to keep the policy active. A $1 million payout tends to be one of the more sizable death benefits you can get when purchasing a life insurance policy.

Average cost of a $1 million life insurance policy

Here are the average monthly premiums for a 20-year, $1 million term life insurance policy for healthy, nonsmoker men and women:¹

	Male	Female
30	$67	$54
40	$109	$86
50	$262	$194
60	$771	$545
70	$2,586	$1,802

Here are the average monthly premiums for a $1 million whole life insurance policy for healthy, nonsmoker men and women:¹

	Male	Female
30	$815	$783
40	$1,115	$1,065
50	$1,665	$1,283

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What factors can affect the cost of a million dollar life insurance policy?

Several factors can impact the cost of a million dollar life insurance policy:

Age

Life insurance premiums can increase with age for most life insurance policies, including million dollar policies. However, many policies maintain fixed premiums once you take them out. Therefore, the earlier you get the policy, the more you can potentially save on your coverage.

Gender

In general, men pay more in premiums than women for the same level of coverage. This is because men tend to have a lower life expectancy and participate in risky activities at a higher rate.²

Health

An individual or family history of certain diseases or health issues can result in higher premiums. Life insurance premiums can be higher for smokers in particular. Smokers can still qualify for life insurance but may not have as budget-friendly rates as nonsmokers.

Occupation

Since insurers consider some jobs to be riskier, they may charge higher premiums for the same level of coverage. Some jobs considered to have higher risk include:

Firefighting
Law enforcement
Military
Garbage collection
Construction

Lifestyle

Like occupation, certain hobbies and lifestyle pursuits can be riskier from a life insurance perspective. Insurers may charge higher premiums if you engage in activities like:³

Scuba diving
Hang gliding
Bungee jumping
Horse riding
Racing cars

Should I get a $1 million life insurance policy?

Since a $1 million death benefit is significant, it may cost more than other policies. However, it can make sense in certain circumstances:

You’re starting a family

Your expenses can increase once you have children. Not only do you have to make more everyday purchases, but you may need a larger living space. Furthermore, your child will be dependent on you for almost two decades. This means you may need a significant amount of coverage. A million dollar life insurance policy for your family can offer plenty of coverage in case you pass away. Your partner will have enough to help replace your income and save for future goals.

You have a mortgage or other debts

If you pass away with debts, your partner may become responsible for paying them off. Alternatively, your estate may be used to pay them off. A million dollar life insurance policy can help, especially if you have significant debt, like a mortgage. Your partner can pay down all these debts to help reduce monthly expenses and save the rest for later.

You want to maximize your estate plan

Any amount in your estate over $15 million may be taxed federally.⁴ Plus, your state may impose additional estate taxes. Life insurance death benefits may not count toward your estate amount if you place it in an irrevocable life insurance trust (ILIT). So, your heirs could potentially receive a substantial amount of assets via your death benefit without losing as much money to taxes.

How to apply for a million dollar life insurance policy

Here’s how to apply for a million dollar life insurance policy:

1. Assess your life insurance needs: Evaluate your current income, living expenses, and savings goals to help determine if you need a $1 million policy.

2. Pick a policy type: The main difference to consider is term vs. whole life insurance. The former offers cost-effective premiums, but coverage can expire. The latter offers lifelong coverage and the ability to help build wealth in a cash value growth component, but premiums can be higher.

3. Shop around and compare life insurance quotes: Getting quotes from multiple providers can help you find the best rates and terms for your million dollar death benefit.

4. Apply for the policy: Once you pick a policy, fill out an application. You’ll provide information about your job, financial circumstances, criminal history, and lifestyle. You may also have to give some basic medical information.

5. Undergo the medical exam: Many million dollar life insurance policies may require you to schedule a medical exam in your home or at the exam provider’s office. They’ll take a medical history, gather basic data (height, weight, blood pressure), and take blood and urine samples.

6. Review the policy terms: Medical exam results can take a couple of weeks to process. The insurer will provide you with policy terms when approved. Review the premiums and terms to make sure everything looks right, and ask any questions you may have.

7. Sign the documents and pay your first premium: If the policy looks good, you can sign the documents and pay your first premium. Coverage officially starts once you start making premium payments.

Get a life insurance quote from Aflac

Million dollar life insurance policies can offer a large death benefit and cost more than most other policies. However, the additional coverage can be worth it for many situations, such as starting a family, helping loved ones cover debt, and estate planning. Plus, various factors could help bring down the cost you’ll pay.

Aflac offers life insurance policies with a wide range of death benefit amounts, whether you need a small amount of coverage or much more. Speak with an agent to see what type of policy could work for you and get a quote today.

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