5 million dollar life insurance policy cost

5 million dollar life insurance policy cost

How much will a 5 million dollar life insurance policy cost you?

Will it cost too much?

Research shows that life insurance shoppers think coverage is 3 times more expensive than it actually is.

Although a 5 million dollar life insurance policy might seem rather large, there are people who need a lot of coverage to support their families.  We have worked with doctors, executives, business owners, etc that are looking for large coverage in their life insurance.

People who have the financial ability to pay for million-dollar coverages need to protect their income or possibly one or several large active loans.  In many cases, these clients are looking to purchase these policies on the recommendations of their attorneys or their CPA.

Should I buy a 5 million dollar life insurance policy?

First off, you should calculate your current debts, your family’s living expenses, and any future financial requirements that might arise such as your children’s college tuition.  You might discover that a 5 million dollar life insurance policy is the right choice.  Once you have decided this is the best policy for you, you might discover it’s more affordable than you thought.

Before making a decision on a life insurance policy of this caliber, shop around and compare quotes from the various life insurance companies.  If you are interested in a term life insurance policy, keep in mind they vary from one company to another.  Our site makes it very easy to find the insurance companies that offer the best rates.

Quotes for $5 million dollar life insurance

Age10 Year Term20 Year Term30 Year TermLevel Rates to Age 100
30$86.43$146.13$268.63$1616.36
40$122.50$236.93$452.38$2355.08
50$346.06$682.41$1239.01$3567.34
60$1039.81$1961.23N/A$5949.94
70$3046.01$7712.48N/A$11029.26
80$11350.50N/AN/A$25172.65

*All quotes are based on a male nonsmoker in excellent health.

5 million dollar life insurance policy cost

The amount you’ll pay will be based on a variety of underwriting factors. Here are the most common underwriting factors that can affect your rate.

  • Age
  • Height & Weight
  • Current & Past Health
  • Medications
  • Motor Vehicle Report
  • Financials (Net worth, annual salary, debts & assets)

Top life insurance companies

There are several life insurance companies that offer the best rates if you purchase a 5 million dollar policy. 

The Top 10 Companies

  1. Principal
  2. Foresters
  3. Lincoln Financial
  4. AIG
  5. Protective
  6. John Hancock
  7. Mutual of Omaha
  8. Prudential
  9. North American
  10. American National

How to get approved for 5 million dollar policy

If you are in the market for a million dollar policy, it’s really important that you work with an agent who is experienced in these larger policies.  We have the knowledge and experience to help you get approved for a million dollar policy.

Obviously, life insurance companies are a great deal more strict with their underwriting for those looking for very large death benefits.  Some insurance companies have set standards for a 5 million dollar policy and some companies offer 10 million dollar policies.  This usually depends on the insurance company’s financial strength.  Many insurance companies do not have the ability or desire to underwrite such large coverages.  Others need support from reinsurance companies before they will commit to this kind of coverage.

Death benefits that are over a certain value go beyond the company’s set limit (jumbo limit) which means the underwriting is taken from the carrier and send your application to a reinsurance company.  Also, many agents do not generally sell policies of this magnitude and do not have the knowledge or experience to secure the best coverage for a wealthy family.

Many agents will just run a spreadsheet of the cheapest one million dollar insurance policies from many different carriers and then simply fill out the application.  An alarm should go off in your head if your agent proceeds down this path!  Many agents are just not familiar with the proper steps and do not have the internal systems in place to provide offers to wealthy families.

Life insurance questions we ask (So will other companies & agents)

  • How much total insurance coverage do you need?
  • Why do you need this amount of coverage?
  • For personal protection, are you protecting your income and/or your mortgage balance?
  • For business protection, do you need to secure a business loan or provide a key person coverage for your company?
  • Do you currently have life insurance and for how much?  This is factored into how much additional insurance you can get.
  • What’s the condition of your overall health?  You will have to supply an insurance examination along with your medical records.

Life insurance includes financial underwriting

Approval for a 1 to 10 million dollar life insurance policy will require a financial underwriting which will include verification of your income and your net worth.  Therefore, you will be asked what your finances are at this time?

Do you participate in high-risk activities such as skydiving, do you regularly travel overseas, or other high-risk activities?

Once these questions have been answered satisfactorily, it’s time to start the application process.  We will shop around for coverage which will include 1 to 5 million dollar policies.

Business life insurance

Do you need a $5 million dollar business insurance policy? Business life insurance is needed for a variety of situations. Do you need to provide coverage for a Key Person in your company? Do you need create a Buy Sell agreement? How about an SBA loan and collateral assignment?

These are a few of the more popular reasons where a five million dollar policy could help protect your business.

How to buy a 5 million dollar policy

Your information will be evaluated and matched to companies that offer the best products for death benefits.  Also, it might be necessary to look into several carriers because your total risk under your current carrier’s retention limits may fall short of the amount of overage you are looking for.

We, as well as other agents, will need you to complete an insurance examination which will be used by insurance companies.  We will need the required medical summary from your doctor which is known as the APS.

Keep in mind, large insurance policies in the range of 1 to 10 million dollars are subject to financial underwriting to determine whether the amount you are seeking can be justified from your financial information.

We have a team of underwriters who will summarize and analyze your medical and financial information and decide which companies we submit to for tentative offers.  We also provide your medical and financial profile as a “trial application” to multiple companies to find out which insurance carriers would be willing to offer this kind of coverage at a competitive rate.

Our service allows us to make preliminary premium comparisons, accurately, based on the tentative offers.  That said, you will not know the actual premium until a carrier makes a formal offer of coverage.  Once that is done, a formal application will be provided to the carrier who offered the best rate during the shopping process.

There will be an inspection report to verify the information provided on the formal application to ensure it’s correct.  Once these steps have been completed, your policy will be approved and then mailed to us to ensure accuracy.  Once all is good, we will mail or email your policy to you.

Compare rates

At some point in time, life insurance is something everyone needs to look into and find the best policy for his or her lifestyle and concerns.  No one wants to leave their loved ones in financial debt or unable to care for themselves, should something happen.  Comparison shopping should be the first thing you research to find an insurance company that will give you the coverage you need along with additional options that are flexible.

Looking for free quotes? Make sure to compare rates at our Life Insurance Quotes page.

Bottom line

Once you have narrowed down companies but still are feeling somewhat confused, please contact us.  We will gladly go over your choices, point out companies we think are good choices and those that are not serving your best interests.  Life insurance is a decision that should be taken very seriously so you want to ensure you are getting the very best policy for you and your family.

Learn more about life insurance by visiting our Life Insurance 101 page.  If you’re looking for additional benefit amounts, be sure to visit Life Insurance Payout Amounts.

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Michael Quinn

Michael Quinn

Michael Quinn is the owner of Life Insurance Blog. Please email or call us at 888-411-1329. We're here to answer your questions & help you get the best policy available.