Affording a Million Dollar Life Insurance Policy
Million Dollar Life Insurance Policy
There is a misconception that million dollar life insurance policies are only for the rich or top one percent. However, the truth is that if you make around $75,000 a year or over, affording a million dollar life insurance policy could be the right coverage for you.
After all, keep in mind that a life insurance policy is meant to help cover funeral and burial costs in addition to years of lost income. Simply getting a policy that is the equivalent of your annual income will not sustain your loved ones for long. If you are a non-working spouse, you should know that you can usually get the same amount of coverage as your working husband or wife.
Qualifying for a Million Dollar Life Insurance Policy
To be approved for a million dollar policy there are certain qualifications you need to meet, and these will all depend on your age and current income (or your spouse’s income, if you are unemployed). Life insurance providers determine the amount of coverage you are eligible for by using a multiple of your annual income. If you have other life insurance policies that you will not be replacing with this new one, they should be factored in as well. Here are the basics:
Age 40 and younger: Multiply annual income by 25 – You need to earn at least $40,000 a year.
Ages 41-50: Multiply annual income by 20 – You need to earn at least $50,000 a year.
Ages 51-55: Multiply annual income by 15 – You need to earn at least $66,000 a year.
Ages 56-65: Multiply annual income by 10 – You need to earn at least $100,000 a year.
Ages 66-70: Multiply annual income by 5 – You need to earn at least $200,000 to qualify.
Ages 71 and up: Your eligibility is based on your overall financial situation.
If you’re buying a policy for estate planning purposes it’s possible that if you don’t meet the income qualifications, that you could qualify based on your assets.
The Life Insurance Medical Exam
Financial requirements aren’t the only standards that need to be met. To qualify for a million dollar life insurance policy, you will need to take a medical exam, or rather, a paramedical exam.
In this type of exam, a paramedic comes to you to record your height and weight, take blood and urine samples, as well as check your blood pressure. Additionally, all applicants 40 and over need a resting EKG (a heart test). Life insurance companies will usually want copies of your medical records as well.
There are life insurance policies that do not require a medical exam. These policies are often referred to as Non Med or No Medical exam life insurance. Unfortunately, most companies cap the maximum benefit amount at around $750,000. However, there have been a few companies recently that have offered a million dollar non medical exam option.
How to Get the Cheapest Life Insurance Rate
If you’re like most, you want to make sure you’re getting the lowest rate for a $1,000,000 life insurance policy. How do you make sure you’re getting the best quotes when you shop online? Watch this quick video on the most common mistakes that shoppers make when buying life insurance online.
Life Insurance Companies with the Best Rates
When it comes to million dollar policies, you can’t just look at general insurance company reputations. See, many companies offer great rates for policies that are five or six figures, but they fail to be competitive for bigger policies. Here are the top companies that do offer competitive rates for million dollar policies:
The American General life insurance company holds an A rating with A.M. Best, and it has been in business for over 160 years. To give you an idea of pricing, let’s look at a couple of examples. Let’s say Jim is a 35-year-old nonsmoker looking for a 20-year, million dollar policy. With American General, he will likely be offered Preferred Plus rates of $44 a month, provided he is in great health, and $71 for Standard rates if he is of decent, average health. Now let’s look at Bill, a 45-year-old nonsmoker. For the same policy as Jim, he will be offered a Preferred Plus rate of $101 a month and a Standard rate of $170 a month.
Having been in business since 1949, Banner Life was given an A+ rating with A.M. Best and currently has over $400 billion worth of active life insurance policies. The same 35-year-old from our earlier example will likely be offered Preferred Plus rates of $41 a month and Standard rates of $71 with Banner Life. The same 45-year-old would be offered $101 a month with Preferred Plus rates and $171 with Standard.
In business since 1907, Protective Life is another A+ rated insurance company. A 35-year-old male nonsmoker seeking a 20-year million-dollar policy will likely be offered a Preferred Plus rate of $39 a month with Protective, and a Standard rate of $86. A 45-year-old nonsmoking male will likewise be offered $100 month for a Preferred Plus 20-year policy and $195 a month with Standard rates.
SBLI is an A+ rated insurance provider with currently over $125 billion in active life insurance policies. For a 35-year-old male nonsmoker seeking a 20-year policy, SBLI is likely to offer him a Preferred Best rate of $38 per month, or a Standard rate of $69 a month. For a 45-year-old male seeking the same coverage, SBLI will likely offer a Preferred Plus rate of $99 a month and a Standard rate of $168 a month.
This is another A+ rated life insurance company that also offers competitive pricing. A 35-year-old nonsmoker applying for coverage with Transamerica will likely be offered $49 a month at Preferred Plus rates for a 20-year million dollar policy, and $75 a month at Standard rates. If he were 45, he would likely be offered Preferred Plus rates of $106 a month and Standard rates of $175.
Affording a Million Dollar Life Insurance Policy
Are you interested in a million dollar policy? Feel free to contact us today for customized quotes and more information on getting the coverage you need. You can call us at 888-411-1329, but you can also fill out the quote form on this page to start comparing rates immediately.
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