For individuals and families worried about the financial impact of losing the primary breadwinner, term life insurance provides a solution. It ensures that your family’s income is replaced, debts are paid off, and final expenses are covered if the unexpected happens. But is a million dollar life insurance policy sufficient to meet these needs?
A $1 million life insurance policy is often seen as standard for many families, providing peace of mind through income replacement. However, understanding the cost of such a policy is crucial.
The main concern isn’t the policy amount but the monthly premium required. Term life insurance offers the most affordable rates. In this article, we’ll break down the costs associated with a $1,000,000 life insurance policy.
Understanding a $1 Million Dollar Life Insurance Policy
Term life insurance is a fairly straightforward life insurance product. Only a few things need to be understood about how it works and why it’s so affordable. The rates are determined like any other life insurance product, and the underwriting process is virtually the same across the board.
- Term life insurance pays a predetermined death benefit if the insured dies within the policy period (the term).
- Once the policy is issued, the periodic premiums and death benefits will not change.
- The terms (policy periods) commonly available are 10-year term, 15-year term, 20 years, 25 years, and 30 years.
- Rates are based on these risks: age of the applicant, health of the applicant, length of the policy term, and the amount of the death benefit. In this case, a one million dollar life insurance policy.
Even though this type of life insurance is fairly simple to understand, many insurance shoppers have questions about other aspects of a term insurance policy, which is generally due to the additional riders and available benefits. Let’s discuss the riders first.
Common Riders to Consider for a $1 million dollar life insurance policy
Your $1 million dollar term life insurance policy can be much more than a death benefit for surviving loved ones. Using insurance riders allows policyholders to broaden their coverage. Here is a list of some common riders available.
| Type of Rider | Rider Benefit |
| Waiver of Premium | Premiums are waived if you’re disabled and cannot work |
| Accidental Death Benefit | Adds additional death benefit if death is caused by a covered accident |
| Child Term Rider | Allows the policyholder to insure all dependent children from birth to the maximum specified age or marriage |
| Additional Insured | Allows the policyholder to insure a spouse or partner up to the limit of the insured’s coverage |
| Conversion Privilege | The term conversion option allows the policyholder to convert some or all of the term coverage to permanent coverage without proof of insurability. Many companies offer a premium credit toward the permanent policy. |
| Accelerated Death Benefit | It provides for the insurer to advance a large portion of the death benefit to the insured in the event of a terminal illness that will result in death. |
| Critical Illness Rider | The insurer will provide a portion of the death benefit to assist in treatment expenses for a covered critical illness. |
| Chronic Illness Rider | Provides for the insurer to advance a portion of the death benefit to assist in treatment expenses of a covered chronic illness |
| Long-Term Care Rider | Provides a portion of the death benefit for long-term care expenses such as in-home nursing costs. |
| Return of Premium Rider | The insurance company will return all premiums paid for life insurance to an insured who outlives the policy term. |
When shopping for a $1,000,000 life insurance policy, the company you select must offer the riders you need to customize your term insurance coverage to meet your individual needs. Most riders are inexpensive and can benefit tremendously when life happens during your policy period.
Be sure you evaluate your needs. How much income do you want to replace? Do you want your life insurance to pay off your mortgage? Do you want to provide a college fund for your kids?
The cost and availability of any life insurance riders will depend on the company you choose. Some companies offer many riders, and some offer very little. Make sure to ask us which company will work best for your needs.
$1 Million Dollar Life Insurance Policy Costs
As an independent life insurance broker, we can provide the best rates from the many companies we represent, and all of them will be highly rated-insurers. To get your specific rate, you can begin the process by using the life insurance calculator on this page to see what a 1 million dollar life insurance policy will cost.
Here are the million dollar life insurance policy rates for a male non-smoker in very good health for the most popular policy terms: 10, 20, and 30 years:
| Age of Applicant | 10-Year Term | 20-Year Term | 30-Year Term |
| 25 | $19.57 | $32.05 | $49.27 |
| 30 | $20.64 | $32.73 | $54.50 |
| 35 | $22.04 | $34.86 | $64.26 |
| 40 | $29.23 | $50.10 | $93.49 |
| 45 | $47.00 | $87.48 | $150.44 |
| 50 | $72.38 | $136.77 | $244.79 |
After you review this price chart, you might notice the false assumptions that many insurance shoppers make about term life insurance:
- A $1 million dollar policy will be ten times the amount of a $100,000 policy.
- A 30-year term policy will always cost the most, but remember, 30 years is a very long time.
Here are the $1 million dollar life insurance policy rates for a female non-smoker in very good health for the most popular policy terms: 10, 20, and 30 years:
| Age of Applicant | 10-Year Term | 20-Year Term | 30-Year Term |
| 25 | $16.66 | $23.77 | $38.22 |
| 30 | $17.87 | $25.38 | $42.88 |
| 35 | $19.35 | $29.49 | $53.20 |
| 40 | $25.88 | $42.39 | $75.38 |
| 45 | $41.14 | $67.14 | $115.59 |
| 50 | $59.02 | $99.02 | $179.34 |
As you can see after comparing this rate chart with the one above it, the rates for women are lower than the rates for men. This is primarily due to women outliving men, and therefore, the insurance company will collect more insurance premiums from women over a long time period.
How to Start a Million Dollar Life Insurance Policy
Now that you understand more about how much a million dollar life insurance policy will cost, starting your policy is an easy process. With our help, you will need to apply for your policy with the company of choice by using their electronic application process. Once we submit your application to the life insurance company, the underwriting begins. The application process can take as little as 10 minutes and only asks for your basic information.
The health info required is confidential. The process today is pretty simple. A phone interview or electronic questionnaire will gather your health information. Your answers and the digital information that life insurance companies can access about you will determine if an exam is needed. This exam usually requires a urine sample, blood draw, and blood pressure check. In many cases, we can get you insured for up to $3 million dollars of life insurance without even needing an exam or labs.
You can get this application process started by using the life insurance calculator on this page. You will gain a better understanding of what a million-dollar life insurance policy will cost you based on your age, the term length, and your gender.
Frequently Asked Questions
What factors influence the cost of a $1,000,000 life insurance policy?
What are the benefits of a million dollar term life insurance policy?
Can I enhance my $1,000,000 life insurance policy with additional riders?
How do million dollar life insurance rates differ between men and women?
