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 insurance 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 or pipe, use chewing tobacco, or even are a marijuana user, Prudential can offer nonsmoker 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
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
- Protective: $54
- Genworth $56
- American General $58
- North American $62
- AXA $62
- MetLife $63
- Banner Life $65
- Transamerica $65
- Principal National $66
While a million-dollar life insurance plan probably sounds outrageous, the majority of applicants need this much life insurance coverage for their family. Before you apply for coverage through any of those companies, you should calculate your life insurance needs.
The first thing that you should calculate is your debts and any final expenses that you would leave behind your loved ones. If something tragic were to happen, your family would be responsible for all of the bills, which can make an already difficult worse. One of the biggest expenses is your mortgage payments, which can put your loved ones under financial strain. Make sure that your final expense insurance plan is large enough to pay off all of your bills.
The next factor to consider is your salary. The second most prominent goal of your life insurance is to replace your salary if anything tragic were to happen.
If you’re one of the main income earners in your household, your loved ones would suffer financially. You should consider getting seven to ten times your annual salary.
Getting Affordable Life Insurance Coverage
In order to get approved for the lowest premiums, we suggest a few key steps:
- Talk to a knowledgeable, independent agent
- Compare rates from several insurance companies
- Apply to more than one carrier, if necessary
When you work with a true, independent agent or broker, it means you’re working with someone who is not bound to just one company, but offers many. It’s one of the more important ways you can spend your time early on in your search for coverage.
By comparing rates and types of insurance from many companies at once, you’ll also get a sneak peek into how many different options you have to choose from. This might mean paying slightly more to skip an exam, or simply to choose a name brand you recognize.
Last, if the first carrier doesn’t give you the rates you’re looking for, don’t hesitate to try the next carrier in line, if your agent thinks it’s worth the time. Sometimes, it’s a result of something coming up in your medical history you had forgot about, but other times it’s the carrier being, well, stingy.
If you have any questions on how to save, please contact us today and we’ll get you going.