Jessica Fox Last Updated On: March 12, 2024

Do You Need a Million Dollar Life Insurance Policy? Let’s Find Out.

A million dollars. It may sound like a lot of money, but when it comes to a life insurance policy, this large sum may be just the right amount. Granted, not everyone needs a million-dollar life insurance plan, but there are a handful of people who will truly benefit from the peace of mind provided by this hefty payout.

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Who Needs a 1 Million Dollar Life Insurance Policy?

One million dollar life insurance policies are designed for people who would leave a lot of loose ends behind if they died. Whether it be dependents, debts, or both, a million dollars of coverage will go a long way to ensure no one is saddled with financial uncertainty and stress after you’re gone.

One million dollar life insurance policies are ideal for:

  • Parents of young families
  • Parents who plan to pay for their children’s education
  • People with a lot left to pay off on their mortgage
  • People with substantial student debt or other loans

We know it’s difficult to think about your own passing, but the fact remains that the plans you make now will have a huge impact on your surviving loved ones.

How to Know If You Need One Million Dollar Life Insurance?

As we said, million dollar term life insurance isn’t for everyone. Even if you do have a young family and some debt, it may still not be the right option.

One of the easiest ways to figure out if a one million dollar policy is a good bet for you is to take your yearly income and multiply it by 5-10.

An example: If your income is $90,000 per year, then $1 million life insurance is likely worth considering. After all, life insurance is income replacement, so the more you make, the more you should aim to replace in the event the unthinkable happens.

Conversely, if you make $35,000 a year, one million dollars of life insurance may be a bit much. Unless that is, you have debt—which leads to our next point.

$1 million dollar life insurance isn’t just for people who want to replace their income to support their loved ones; it’s also for people who have sizable debts. The amount of coverage can effectively wipe out your loans and not leave the people you love struggling to take care of your finances.

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Determining Your Eligibility for a One Million Dollar Life Insurance Policy

Just like many other types of life insurance policies, you can be denied coverage for a $1 million dollar plan. Most insurers will offer you anywhere from 10 to 30 times your annual salary. 

Additionally, there will be some variation in what you’re offered based on your age. If you’re younger, your coverage eligibility will be higher. The reason is simple: younger people tend to be healthier, and the healthier you are, the less of a risk you pose to insurance companies. 

Insurance, after all, is a business, and these businesses make money by not having to pay out every single policy. Most people who have policies out-live their terms, so insurance companies make money. 

But, if something does happen to a policyholder, at least they invested in the coverage.

Average Monthly Premiums, $1 Million Life Insurance Policy

The table below reflects sample premiums for a million-dollar, 20-year term policy for men and women of different ages in the Preferred Non-smoker health class.

25 Female $34.44
Male $45.09
35 Female $41.81
Male $50.88
45 Female $84.04
Male $111.10
55 Female $201.91
Male $284.48

*Sample premiums are for male and female non-smokers who qualify for a Preferred health rating, buying a $1,000,000, 20-year term life insurance policy. Not all policies are available in all states.

What Can Affect My Ability to Get One Million Dollar Health Insurance?

If you’re in poor health or do not have a steady job, you may be denied life insurance—one million dollar health insurance or otherwise. 

Use your current annual salary as a gauge for how much life insurance you may need. Someone with a $30,000 salary may not be approved for one million dollar life insurance but perhaps, more importantly, they probably don’t need this much life insurance. 

The amount of life insurance you require will depend on the money you earn, the dependents you have, and the debt you’ve incurred. The more of each of these things you have, the more million dollar term life insurance you’ll need.

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How Much Does a One Million Dollar Life Insurance Policy Cost?

There are a few factors that will influence the cost of your life insurance policy:

  • The term length of your policy. Longer-term policies will cost more than shorter-term policies. This is because the longer you have the policy, the more likely the carrier is to have to pay out on it.
  • If you have another policy. Your carrier will likely account for the amount of your life insurance with your primary company when they prepare an offer, so you may not qualify for a $1 million dollar plan if you already have substantial coverage.
  • Your age. The younger you are, the less your health insurance will cost. If you’re younger, you’re not as risky of an investment.
  • Your health. If you have any serious pre-existing health conditions or an unstable medical history, your insurance can cost more. Again, it comes down to be riskier to insure.

So, if you’re younger and in good health, it’s a good idea to start looking into one million dollar health insurance now and to lock in rates while they’re lower.

But to answer that question—how much does a one-million-dollar life insurance policy cost—we can’t give you an exact answer, without giving you a quote (which you can request here).

However, to provide you with a generalized idea, a healthy 35-year old woman with a good job would pay around $35/month for a $1 million dollar life insurance policy no exam. That’s just over a dollar a day.

Not bad for a million bucks.

Where to Get a One Million Dollar Life Insurance Policy?

The easiest, most affordable, and ultimately the best place to get a one-million-dollar life insurance policy is right here.

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It’s probably a good idea, unless you own your home outright, have no outstanding debts, and have saved as much as you want to save for their educations. The number of children you have also plays into the amount of life insurance that’s ideal for you. If you have one child, you won’t need as much as if you have three, for instance.
People with dependents and debt are ideal for this amount of life insurance. Request a free comparison quote from our top (and most affordable) providers to see how much you can expect to pay.
Yes, but unless you have dependents or substantial debts, it may not be worth it. Life insurance exists to provide income to loved ones you leave behind who depend on you and to pay off debt. If you don’t have children who rely on your income and sizable loans, you likely don’t need this much coverage.
If you’re younger and in good health, no—in fact, you can get a policy for around a dollar a day. Request a free comparison quote to get an idea of what you can expect to pay.
That depends on the coverage in your primary policy. If it is considerable coverage, you may be denied the full amount.


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