While a million dollar life insurance policy sounds like a lot of money, many people with families should have a million dollar policy or higher. When you add up the mortgage, replacing your income, and covering future college tuition for your kids, you can quickly see how a $1,000,000 policy makes sense. This is especially true if you are in your prime earning years and want to make sure your income will be replaced with life insurance should something happen to you. In this article I’ll explore which companies to consider, life insurance company requirements, and provide some examples of pricing as well.
Companies with the Best Pricing
The company with the best pricing for you may very well be a different company that has the best pricing for someone else. Companies price based on age, coverage amount, length of term, and overall health, and so there isn’t one life insurance company that has the best rates in every situation. Never the less, here are some of the carriers that consistently have the top rates, and are highly rated companies as well.
SBLI has an A+ rating from A.M best and over $125 Billion in life insurance policies in force.
Rated A+ and in business since 1949, Banner boasts over $400 Billion in active life insurance policies.
Usually found in the top 5 best priced companies, Protective has been in business for over 100 years. They also carry an A+ (considered ‘Excellent’) from A.M Best.
One of our go to companies for many high risk life insurance situations, American General has been in business for over 100 years, with millions of customers throughout the U.S.
We had to include Prudential in our list. They have competitive pricing an A+ rating, and we use them in many situations – for example Prudential offers non smoker rates to anyone not smoking cigarettes. That means if you smoke a cigar, pipe, chew tobacco, or even a marijuana user, Prudential will offer non smoker rates. Prudential also approved active military duty personnel.
Aside from the companies above, we represent over 30 life insurance companies, however the list above is companies that are often most competitive.
Financial and Medical Requirements
There are two general requirements to qualify for a million dollar life insurance policy. First, you need to have an annual income that justifies you buying a 1MM policy, as well as qualify from a health standpoint. The younger you are, the higher the multiple of your income that is used. If you’re between 20 – 30 years old, life insurance companies will generally allow you to use around 25-30 times your annual income, for the amount you can qualify for. Meaning a $50,000 income is enough to qualify. As you get older the multiple decreases. For example a 40 year old may be allowed to use 20 times their annual income, while a 50 year old will be allowed 15 times income.
These financial multiples don’t apply in every single situation. For example if you’re buying a business and need life insurance as part of the loan collateral, that could justify a policy, regardless of income requirements.
If you are a non working spouse, you can still qualify based on how much life insurance your working spouse has. Most insurance companies allow you to have an equal amount of coverage up to several million dollars.
As far as medical requirements go, a million dollar policy will require an exam. A nurse would be sent to your home or office to do a blood test, take a urine sample, blood pressure, and your height and weight. Many times the insurance carrier would also want to order your doctor’s medical records as well.
One Million Dollar Life Insurance Rates
Let’s take a look at some sample rates: We’ll use a 40 year old male applying for a 20 year term 1 Million dollar policy. We’ll assume he is in excellent health and can get preferred plus rates. Rates below are monthly rates, and I’ll list the top 10 best priced companies. All companies on this list are rated A or A+ by A.M Best.
SBLI: $54 per month
American General $58
North American $62
Banner Life $65
Principal National $66
Now that you know all about getting a million dollar term life insurance policy, you can get rates right on this page with our instant quote tool or call us at 800-574-0245 to discuss your life insurance needs.