How much does a $1 million life insurance policy cost?
Life insurance benefits can cover end-of-like expenses like your funeral, but they can also help to replace your income, pass on an inheritance, pay off shared debts, and more. With that in mind, it's easy to see why someone may need a $1 million policy. But how much will it cost?
The monthly premium on a $1 million term life policy can range significantly, according to quote data from Haven Life. The price you end up paying will depend on factors like your age, medical history, lifestyle habits, and policy type.
If you're in the market for life insurance - in any amount - then start by getting a free online price estimate here now so you know exactly what you'd qualify for.
To help you estimate your cost, here are the common factors that influence life insurance rates, as well as a lineup of $1 million policy quotes.
What influences the cost of life insurance?
When you apply for life insurance, the provider's going to ask you a variety of questions to assess your health and expected lifespan.
"Insurance companies will often request blood, urine, height, weight, and blood pressure readings to confirm the health of the person applying for insurance," said Brendan Sheehan CFP, the managing director at Waymark Wealth Management.
He adds, "Other less evident factors can also affect the cost including a potential insured's family history (e.g. premature death of parents/siblings), demographics, driving record, and credit score."
Additionally, the policy type you select will play a large role in your costs. For example, a 10-year term policy will be cheaper than a 20- or 30-year term because the shorter term carries less risk. Further, whole life policies are typically more expensive than term policies because they're permanent and come with a cash value component.
The insurer you choose will also influence your cost because each company has its own risk assessment procedures, approval requirements, and rates. You can ensure you find a competitive rate by shopping around, getting quotes, and comparing the offers side-by-side.
Start with a free online price quote from Haven Life here or use the table below to shop providers.
How much does a $1 million life insurance policy cost?
With so many factors at play, there's no one set price for a $1 million life insurance policy that applies to everyone. However, here's a look at how the pricing can change depending on age and the length of the policy.
Costs for a 10-year term
Male
Age | Policy cost per month | Annual cost | Full 10-year term cost |
30 | $27.90 | $334.80 | $3,348.00 |
40 | $40.76 | $489.12 | $4,891.20 |
50 | $194.22 | $2,330.64 | $23,306.40 |
60 | $585.87 | $7,030.44 | $70,304.40 |
Female
Age | Policy cost per month | Annual cost | Full 10-year term cost |
30 | $23.11 | $277.32 | $2,773.20 |
40 | $33.37 | $400.44 | $4,004.40 |
50 | $129.40 | $1,552.80 | $15,528.00 |
60 | $418.66 | $5,023.92 | $50,239.20 |
Costs for a 20-year term
Male
Age | Policy cost per month | Annual cost | Full 20-year term cost |
30 | $43.27 | $519.24 | $10,384.80 |
40 | $64.59 | $775.08 | $15,501.60 |
50 | $388.74 | $4,664.88 | $93,297.60 |
60 | $1403. 67 | $16,844.04 | $336,880.80 |
Female
Age | Policy cost per month | Annual cost | Full 20-year term cost |
30 | $33.65 | $403.80 | $8,076.00 |
40 | $54.05 | $648.60 | $12,972.00 |
50 | $248.31 | $2,979.72 | $59,594.40 |
60 | $1,118.76 | $13,425.12 | $268,502.40 |
Costs for a 30-year term
Male
Age | Policy cost per month | Annual cost | Full 30-year term cost |
30 | $73.24 | $878.88 | $26,366.40 |
40 | $135.40 | $1,624.80 | $48,744.00 |
50 | $520.12 | $6,241.44 | $187,243.20 |
60 | NA | NA | NA |
Female
Age | Policy cost per month | Annual cost | Full 30-year term cost |
30 | $64.06 | $768.72 | $23,061.60 |
40 | $108.65 | $1,303.80 | $39,114.00 |
50 | $380.67 | $4,568.04 | $137,041.20 |
60 | NA | NA | NA |
Assumptions: These quotes from Haven Life are based on an individual who lives in California, has good health, and doesn't use tobacco or nicotine. Permanent life insurance quotes were not available.
A few interesting takeaways:
- The policy costs increase with age.
- Coverage is more expensive for males than females.
- Monthly premiums increase as the term length increases.
- The most expensive policy's full-term cost was only 34% of the $1 million death benefit amount.
- Quotes on 30-year terms aren't available for 60-year-olds.
Do you need a $1 million life insurance policy?
If you want to leave a large amount of money behind to a loved one, life insurance provides a way to do so. But is a $1 million policy enough or too much?
"$1 million may sound like a lot, however, if it's stretched out over several people's lifetimes (spouse and kids), many will need much more than $1 million to support even a modest lifestyle," says Aaron Freedman CFP, insurance and financial strategist at MassMutual Idaho. "
He adds, "There are many factors to consider such as the family's living expenses, if they want to have enough to send the kids to college, and if the remaining spouse will work."
Sheehan also pointed out that, in some cases, families don't need life insurance for protection but want it for tax benefits.
"An older, 60+-year-old parent may have significant IRAs and 401k balances which will be taxable to their heirs after they pass. They can open an Irrevocable Life Insurance Trust (ILIT) and apply for a sizeable life insurance policy to be owned by the ILIT," explained Sheehan.
He continued, "They then can withdraw funds from their IRAs, pay the tax on the withdrawals, and ultimately pass an inheritance to their children via life insurance that isn't subject to estate or income taxes."
In either case, the policy amount that's right for you will depend on how much you want to leave behind, if the premiums for your desired policy fit into your budget, and—perhaps—what you hope the benefit will cover.
Get a quote for a $1 million life insurance policy online now!
