The monthly premium for a $1 million term life insurance policy might vary widely. The Getty Images/iStockphoto collection
In addition to covering final expenses such as a funeral, life insurance proceeds can be used to replace lost income, pass on an inheritance, pay off joint debts, and more. Given this, it is simple to see why someone could require a $1 million coverage. However, how much does it cost?
According to quotation data from Haven Life, the monthly premium for a $1 million term life policy might vary substantially. Your premium will be determined by variables like as your age, medical history, lifestyle, and policy type.
If you’re in the market for life insurance, regardless of the amount, start by obtaining a free online quote so you know exactly what you’d be eligible for.
Here is a list of key characteristics that affect life insurance premiums, as well as quotations for $1 million policies, to assist you in estimating your premium.
What factors affect the price of life insurance?
When you apply for life insurance, the company will analyze your health and predicted lifetime by asking you a series of questions.
“Insurance companies frequently request blood, urine, height, weight, and blood pressure readings to prove the applicant’s health,” stated Waymark Wealth Management’s managing director, Brendan Sheehan CFP.
He adds, “Other less obvious criteria, including as a potential insured’s family history (e.g., early death of parents/siblings), demography, driving record, and credit score, can also affect the cost.”
Additionally, the policy type you choose will have a significant impact on your premiums. A 10-year term policy, for instance, will be less expensive than a 20- or 30-year term policy since the shorter term involves less risk. Additionally, because they are permanent and include a cash value component, whole life insurance are often more expensive than term policies.
Each firm has its own risk assessment techniques, approval requirements, and pricing, therefore your choice of insurer will also affect your premiums. You can discover a competitive rate by shopping about, obtaining many quotations, and comparing the offers side by side.
Here you can get a free online quote from Haven Life, or you can use the table below to compare providers.
What is the cost of a $1 million life insurance policy?
With so many variables in play, there is no universally applicable pricing for a $1 million life insurance policy. However, here is a peek at how pricing can vary depending on age and policy duration.
Costs for a 10-year term
Male
| Age | Policy cost per month | Annual cost | Full 10-year term cost |
| 30 | $27.90 | $334.80 | $3,348.00 |
| 40 | $40.76 | $489.12 | $4,891.20 |
| 50 | $194.22 | $2,330.64 | $23,306.40 |
| 60 | $585.87 | $7,030.44 | $70,304.40 |
Female
| Age | Policy cost per month | Annual cost | Full 10-year term cost |
| 30 | $23.11 | $277.32 | $2,773.20 |
| 40 | $33.37 | $400.44 | $4,004.40 |
| 50 | $129.40 | $1,552.80 | $15,528.00 |
| 60 | $418.66 | $5,023.92 | $50,239.20 |
Costs for a 20-year term
Male
| Age | Policy cost per month | Annual cost | Full 20-year term cost |
| 30 | $43.27 | $519.24 | $10,384.80 |
| 40 | $64.59 | $775.08 | $15,501.60 |
| 50 | $388.74 | $4,664.88 | $93,297.60 |
| 60 | $1403. 67 | $16,844.04 | $336,880.80 |
Female
| Age | Policy cost per month | Annual cost | Full 20-year term cost |
| 30 | $33.65 | $403.80 | $8,076.00 |
| 40 | $54.05 | $648.60 | $12,972.00 |
| 50 | $248.31 | $2,979.72 | $59,594.40 |
| 60 | $1,118.76 | $13,425.12 | $268,502.40 |
Costs for a 30-year term
Male
| Age | Policy cost per month | Annual cost | Full 30-year term cost |
| 30 | $73.24 | $878.88 | $26,366.40 |
| 40 | $135.40 | $1,624.80 | $48,744.00 |
| 50 | $520.12 | $6,241.44 | $187,243.20 |
| 60 | NA | NA | NA |
Female
| Age | Policy cost per month | Annual cost | Full 30-year term cost |
| 30 | $64.06 | $768.72 | $23,061.60 |
| 40 | $108.65 | $1,303.80 | $39,114.00 |
| 50 | $380.67 | $4,568.04 | $137,041.20 |
| 60 | NA | NA | NA |
These Haven Life quotations are based on an individual who resides in California, is in good health, and does not smoke or use nicotine. Permanent life insurance quotes were not available.
Several noteworthy takeaways:
Insurance premiums grow with age.
Insurance is more expensive for men than for women.
As term duration increases, so do monthly premiums.
The full-term cost of the most expensive policy was only 34% of the $1 million death benefit.
Quotes on 30-year terms are not available for those aged 60.
Do you require $1 million in life insurance?
If you wish to leave a significant sum of money to a loved one, you can do it using life insurance. But is a $1 million coverage sufficient or excessive?
Aaron Freedman CFP, insurance and financial consultant with MassMutual Idaho, says, “$1 million may sound like a lot, but if it’s spread out over multiple people’s lifespan (spouse and children), many will need significantly more than $1 million to support even a modest lifestyle.”
He adds, “There are other aspects to consider, such as the family’s living expenses, whether or not the children will attend college, and whether or not the surviving spouse will work.”
Sheehan also noted that in some instances, families may not require life insurance for protection, but desire it for its tax advantages.
“A parent aged 60 or older may have substantial IRA and 401k balances that may be taxable to their heirs after death. Sheehan indicated that they can establish an Irrevocable Life Insurance Trust (ILIT) and apply for a substantial life insurance policy to be owned by the ILIT.
He continued, “They can then withdraw cash from their IRAs, pay taxes on the withdrawals, and ultimately leave a legacy to their children through tax-free life insurance.”
In either case, the appropriate insurance amount will depend on how much you wish to leave behind, if the premiums for your preferred coverage are within your budget, and perhaps what you anticipate the benefit would cover.
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