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Million dollar life insurance: How much it costs & who needs it

A million-dollar term life insurance policy lasting 20 years can cost less than $48 per month or $555 per year. Here’s how to find out if a $1 million life insurance policy is right for you.

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Headshot of Antonio Ruiz-Camacho

By

Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.&Antonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Edited by

Adam MorganAdam MorganEditorial DirectorAdam Morgan is an editorial director at Policygenius who leads the life insurance and annuities team. Previously, he led editorial teams matrixed across multiple financial publications at Red Ventures — including Bankrate, NextAdvisor, Million Mile Secrets, and others. As a journalist, his work has appeared in Esquire, Scientific American, The Guardian, Los Angeles Times, and elsewhere.
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Reviewed by

Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated|4 min read

Expert reviewedExpert reviewedThis article has been reviewed by a member of ourFinancial Review Council to ensure all sources, statistics, and claims meet the highest standard for accurate and unbiased advice.Learn more about oureditorial review process.

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A $1 million life insurance policy might seem like too much coverage at first, but once you account for long-term costs like raising children and paying off a mortgage, you may discover your loved ones would need that much financial support in the event of your death, if not more.

A $1 million life insurance policy is more affordable than you might think, especially if you’re young and in good health.

Key takeaways

  • A common rule of thumb is to purchase life insurance coverage at least 10 to 15 times your income. If you make $100,000 annually, that’s $1 million.

  • When calculating your coverage needs, make sure to include any additional financial obligations, like shared debts.

  • There are no restrictions on how your loved ones can spend a $1 million life insurance payout.

How much does million-dollar life insurance cost?

The longer your term life insurance policy is, the higher your premiums will be. Your premium is how much you pay for your coverage — usually on a monthly or annual basis.

A 30-year-old non-smoking male in good health can expect to pay $31 per month for a $1 million term life insurance policy with a 10-year term, or $48 for a 20-year term. That same adult would pay $71 for a policy with the same coverage amount with a 30-year term.

Average monthly rates for a $1 million term life policy

Age

Gender

10-year term

20-year term

30-year term

20

Female

$23.91

$33.63

$49.32

Male

$33.76

$47.51

$66.57

30

Female

$24.85

$36.90

$57.04

Male

$31.59

$48.89

$71.88

40

Female

$37.81

$60.65

$97.32

Male

$46.80

$75.24

$122.41

50

Female

$89.17

$139.50

$232.24

Male

$111.38

$188.29

$315.50

60

Female

$190.71

$354.51

N/A

Male

$259.24

$499.98

N/A

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Methodology: Average monthly rates are calculated for male and female non-smokers in a Preferred health classification obtaining 10-year, 20-year, and 30-year $1 million life insurance policies. Life insurance averages are based on a composite of policies offered by Policygenius from Legal & General America, Brighthouse Financial, Corebridge Financial, Foresters Financial, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, Symetra, and Transamerica and the Policygenius Life Insurance Price Index, which uses real-time data from leading life insurance companies. Rates may vary by insurer, term, coverage amount, health class, and state. Not all policies available in all states. Rate illustration valid as of 04/01/2024.

Learn more about term life insurance rates

Sample monthly rates for a $1 million whole life insurance policy

Whole life insurance doesn’t expire, so it’s significantly more expensive than term life, and the amount of coverage you choose will be a key factor in the cost of the policy. A 30-year-old non-smoking male in good health can expect to pay around $954 per month for a $1 million whole life insurance policy.

Age

Gender

$1 million coverage amount

20

Female

$558.50

Male

$670.50

30

Female

$814.00

Male

$954.50

40

Female

$1,195.00

Male

$1,433.00

50

Female

$1,899.00

Male

$2,222.00

60

Female

$3,179.50

Male

$3,769.00

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Methodology: Approximate monthly rates are calculated for non-smokers in a Preferred health classification, obtaining a $1 million whole life insurance policy paid up at age 100 offered by Policygenius through MassMutual. Rates may vary by insurer, coverage amount, health class, and state. Not all policies available in all states. Rate illustration valid as of 04/01/2024.

Learn more about whole life insurance rates

Ready to shop for a $1 million life insurance policy?

What factors influence the cost of a $1 million life insurance policy? 

Life insurance companies determine how much you’ll pay for your policy based on your application and health history. Below are a few of the main factors they consider.

  • Your age. The younger you are, the less you’ll have to pay for life insurance because we all become riskier to insure as we age. The average cost of life insurance increases by 4.5% to 9% every year you delay buying a policy.

  • Your gender. On average, men pay 24% more for life insurance than women. Men have a shorter life expectancy than women, so insurers consider them riskier to insure. [1]

  • Your health. Generally, the fewer health conditions you have, the lower the chances that you die while the policy is active will be. This means that the healthier you are, the lower your rates will be.

  • Lifestyle activities. Lifestyle activities that increase your risk of dying can raise your rates — whether that’s smoking or skydiving.

Who needs a million-dollar life insurance policy?

Anyone who’s making $100,000 or more per year or has multiple people depending on their income likely needs a million-dollar policy. 

Some common categories of people who could need this kind of coverage include:

  • Parents and future parents

  • Spouses with shared debt, like a mortgage and car loans

  • Business owners

Many financial advisors recommend buying coverage that’s 10 to 15 times your annual income. The best way to determine whether you need that much coverage is to calculate your current expenses and future financial obligations. 

For example, say you:

  • Make $100,000 per year

  • Have $200,000 remaining on your mortgage, and

  • Plan to have a child before your policy expires

To cover your remaining mortgage and the cost of raising a child to age 18 (approximately $310,605, according to the Brookings Institution and data from the U.S. Department of Agriculture), [2] your loved ones would need over $500,000. 

If you’d like to leave them enough on top of that to replicate just five years of your $100,000 salary, you would need another $500,000.

In total, you’d need at least $1 million in coverage. If you have additional debt, expect your salary to increase, or want to cover the cost of your future children’s college educations, you might need coverage closer to a $2 million life insurance policy.

Do you have different coverage needs?

If you’re a high-net-worth-individual, consider shopping for a $5 million or $10 million life insurance policy instead.

If you’re not sure how much life insurance you should have, we can help. Use our life insurance coverage calculator to get a sense of your coverage needs.

Who can buy a $1 million life insurance policy?

As long as your income, assets, and liabilities justify the coverage, you usually won’t have any problems buying a million-dollar policy. When you apply for life insurance, insurers want to make sure you get approved for a coverage amount you can afford. 

They’ll look into factors like your age, income, net worth, overall financial stability, and any life insurance coverage you may already have to determine the payout amount they think is appropriate for your situation.

Age & income

Each insurer sets a maximum amount of coverage people in each age group can purchase. Here are common ranges based on Policygenius’ partner insurance companies:

  • Under age 40: 25 to 30 times your yearly income

  • Ages 40 to 60: 10 to 25 times your yearly income

  • Ages 60 to 70: 5 to 10 times your yearly income

Based on these ranges, you’d need to make at least $34,000 under age 40 to qualify for a million-dollar policy. By the time you reach age 60, you’d need to make $100,000 to $200,000 to qualify.

This is because when you’re young, you have more working years ahead of you and higher potential for financial growth. As you get older, you’re closer to retirement and likely have fewer financial responsibilities, so you need less coverage.

Read more about the best life insurance for seniors

Net worth

Let’s say you’re a retiree in your 60s with a high net worth, who earns $30,000 in yearly dividends. 

  • You might need $300,000 in coverage, but an insurer could approve you for more coverage based on your total assets. 

  • The insurer will view you as low-risk from a financial standpoint because you’ll be able to maintain your premium payments.

Existing life insurance coverage

If you already have some life insurance and apply for another policy, your existing coverage counts toward your total coverage limit. 

  • For example, let’s say you qualify for a $1 million policy based on your income and you submit an application for that coverage amount. 

  • If you already have an active life insurance policy worth $500,000, the insurer may only approve $500,000 in additional coverage. 

  • The company will count your existing coverage toward your maximum approved coverage amount.

If you’re unsure about how much life insurance you need, we can help. 

  • Use our calculator to get a sense of how much coverage is right for you. 

  • Then connect with a Policygenius agent to discuss your options and get started on your application.

At Policygenius, our experts are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.

Learn more about the best life insurance companies

Ready to shop for a $1 million life insurance policy?

How to buy a $1 million life insurance policy

  1. Buy now to get the cheapest rates. The longer you wait to buy life insurance, the more you’ll have to pay for the same coverage because we all get riskier to insure every year.

  2. Compare multiple life insurance quotes & companies. Insurance rates are regulated by law, which means no company, broker, or agent can offer you a discount on a policy. But because each insurer will look at your profile differently, you can find the cheapest rates by shopping around with multiple insurers as opposed to working with just one.

  3. Work with an independent broker. Independent brokers like Policygenius offer more impartial advice, because they’re not tied to one particular insurance company. Policygenius experts work for you — not the insurers — and can help you find the best type of coverage for your needs.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. Kaiser Family Foundation

    . "

    Number of Deaths per 100,000 Population by Gender

    ." Accessed April 04, 2024.

  2. The Brookings Institution

    . "

    It's getting more expensive to raise children. And government isn't doing much to help

    ." Accessed April 04, 2024.

Authors

Katherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Editor

Adam Morgan is an editorial director at Policygenius who leads the life insurance and annuities team. Previously, he led editorial teams matrixed across multiple financial publications at Red Ventures — including Bankrate, NextAdvisor, Million Mile Secrets, and others. As a journalist, his work has appeared in Esquire, Scientific American, The Guardian, Los Angeles Times, and elsewhere.

Expert reviewer

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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