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

A million-dollar term life insurance policy can cost less than $48 per month or $555 per year, especially if you purchase it while still young. Here’s how to find out if a $1 million life insurance policy is right for you.

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By

Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent 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 helps lead our life insurance and disability insurance 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 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 initially 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.

Average monthly rates for a $1 million term life policy

The longer your term life insurance policy is, the higher your premiums will be. 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.

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. Rates may vary by insurer, term, coverage amount, health class, and state. Not all policies available in all states. Rate illustration valid as of 01/01/2024.

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 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. Whole life is many times more expensive than term life.

Age

Gender

$1 million coverage amount

20

Female

$558.50

Male

$670.50

30

Female

$814

Male

$954.50

40

Female

$1,195

Male

$1,433

50

Female

$1,899

Male

$2,222

60

Female

$3,179.50

Male

$3,769

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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 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 01/01/2024.

Learn more about whole life insurance rates

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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 details. 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 likely needs a million-dollar policy. 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 or want to cover the cost of your future child’s college education, you might need even more.

Do you have greater coverage needs?

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

Who can buy a $1 million life insurance policy?

When you apply for life insurance, insurers want to make sure you get approved for a coverage amount you can afford. They have guidelines in place to make sure this amount is proportional to your financial responsibilities.

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 and 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?

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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 and 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.

Frequently asked questions

Where can you buy a million-dollar life insurance policy?

Most major life insurance companies can sell you $1 million worth of life insurance, as long as it makes sense based on your income and assets.

How much does a million-dollar life insurance policy cost?

A 30-year-old might pay between $36 and $48 per month for a 20-year, $1 million life insurance policy. A 40-year-old might pay between $60 and $75 per month, and a 50-year-old might pay between $139 and $188 per month for the same coverage.

Is a million-dollar life insurance policy enough coverage for me?

The amount of life insurance you need depends on your circumstances. A recent college graduate likely doesn’t need $1 million in coverage. On the other hand, $1 million might not be enough for a family of five. To get an estimate of how much life insurance you need, add up your income, expenses, debts, and any future expenses you anticipate, like a mortgage or college tuition. Our life insurance calculator can help you do the math — and a Policygenius expert can help give you a more personalized recommendation.

How can you spend a $1 million life insurance payout?

There are no restrictions on how the death benefit is spent. Your loved ones can use the life insurance proceeds to cover costs like childcare, college tuition, funeral costs, monthly bills, medical expenses, or outstanding debts.

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 November 14, 2023.

  2. The Brookings Institution

    . "

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

    ." Accessed November 14, 2023.

Authors

Katherine Murbach is an editor and a former licensed life insurance agent 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 helps lead our life insurance and disability insurance 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 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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