It's critical to assess life insurance coverage thoroughly, especially if you're looking for a five-million-dollar policy while locating an insurer that meets your demands and budget.
Premiums for million-dollar life insurance policies might differ significantly from one company to the next, which is why you should compare estimates from several firms.
This is the most cost-effective strategy to save money if you require extensive life insurance coverage, regardless of why you require such a huge death benefit.
Sample premium for a five million dollar policy
"How much is a million-dollar life insurance policy?" is a question we get a lot. Before I give them an answer, I usually advise them to consider greater death benefit levels rather than just the cost of a $1 million life insurance policy.
You'll also need to select whether you want to seek permanent or term life insurance rates. We'll focus on term life insurance rates because they're often substantially less expensive than the average cost of permanent life insurance.
In any case, there's no need to look any farther! Here are some examples of what you might spend for a five-million-dollar life insurance policy.
If you're a 45-year-old man looking for a $5 million policy, you can get a variety of favored plus ratings depending on the firm you choose.
Three A+ rated organizations, for example, range in prices from $205.32 to $714.27, depending on the year. These firms, including Banner Life Insurance Company, are included in our top 10 list of life insurance companies.
A ten-year level term policy will cost you roughly $205.32, while a fifteen-year term policy will cost you around $305.37, and a twenty-year term policy will cost you around $427.17.
Although this is just an example, it demonstrated how life insurance prices might vary significantly in some instances.
||$5,000,000 - 20 Year Term
||$5,000,000 20 year Term
Overall, it's crucial to remember that the range of pricing is mainly determined by a few factors, including the length of your term policy and the amount of money (death benefit) you want to insure.
As a result, while planning to apply for a multi-million dollar life insurance policy, it's critical to look into your possibilities.
Higher premiums = stricter tests
When your life insurance premiums reach a particular level, especially millions of dollars, your life insurance company will conduct a more thorough review of your laboratory testing. This process is known as life insurance underwriting.
Certain carriers will allow you to apply for life insurance without taking an exam, but after you reach the $1 million life insurance threshold, anticipate them to scrutinize other areas of their underwriting, which we will go over in more detail later.
Obviously, life insurance firms should conduct due diligence on anyone looking to purchase life insurance worth millions of dollars. If they didn't, they wouldn't be financially prudent.
If a life insurance business develops a reputation for "easy underwriting," insurance agents and consumers will seek coverage from that company if they have major medical issues. This is known as adverse selection, and their underwriting performance would suffer. They would lose money and potentially be unable to pay death benefit claims due to a lack of reserves.
Life insurance applications and your medical history
Your medical history will undoubtedly be considered when applying for high-limit life insurance policies. If you apply for life insurance over the phone or on the internet, you will be asked many health questions by your life insurance agent, either in person or over the phone.
Prepare for this by compiling all of your information from the recent doctor or hospital appointments, including dates of service, reasons for the visit, service results, and whether or not the medical condition is still present and under control. This would include any prescription drugs you're taking for that medical condition and the dose levels and regularity with which you're taking them.
According to the Centers for Disease Control and Prevention, the following are the leading causes of death in the United States in 2014 (the most recent complete year available):
- 614,348 people have heart disease.
- 591,699 people have cancer.
- 147,101 people have chronic lower respiratory illnesses.
- 133,103 strokes (cerebrovascular disorders)
- Alzheimer's disease affects 93,541 people.
- 76,488 people have diabetes.
- 55,227 people were infected with influenza and pneumonia.
- 48,146 people have nephritis, nephrotic syndrome, or nephrosis.
If you have one of the medical issues on this list, you can expect to pay more for your life insurance policy. Because some of these diseases are genetic, you'll also need information on your parents' health conditions and information on the diseases listed above for your siblings.
Life insurance companies will ask you to complete various application requirements depending on your age and the death benefit levels you are looking for. This will allow them to execute their underwriting. Every company is different, and whether you're looking for life insurance at 50 years old or life insurance for people over 75 years old, the enrollment requirements may differ.
Because you're seeking a significant death benefit, such as at least a million dollars in life insurance, you'll nearly always need to get a physical, or at the very least have a paramedic examiner come to your home or workplace and perform a "mini-physical."
A nurse will typically check your blood pressure, height, and weight, ask you questions about your health and family, take blood and obtain a urine specimen for lab analysis, and perform a portable EKG assessment.
If you're applying for a $5 million life insurance policy, you'll almost certainly be required to undergo a comprehensive physical examination and a stress test EKG from a cardiologist.
Why is it important for life insurance companies to know about your lifestyle?
Your lifestyle choices will undoubtedly influence the rates life insurance companies offer you and whether or not you are provided a policy.
The following are some of the lifestyle choices that you will be questioned about on your life insurance application:
- Do you chew tobacco, smoke cigarettes, or smoke cigars?
- Do you routinely exercise or participate in physical activities such as tennis, biking, or other sports?
- Do you go to unsafe locations around the world regularly?
You probably already know that quitting smoking and doing more exercise will improve your health and cut your life insurance premiums.
For your convenience, here are a few lifestyle guidelines that have been demonstrated in several studies to help you live longer. They won't help you save money on term life insurance, but they might help you live longer:
- Floss your teeth on a regular basis (it helps reduce infections and inflammation in gums, resulting in less chance of infections in your arteries causing plaque buildup).
- Increase your vegetable consumption. Vegetables are cooked in a heart-healthy manner.
- Get out of Alaska and/or spend a lot of time outside (Vitamin D has several health benefits).
- Put your seatbelt on: it has nothing to do with disease prevention, but it can help you stay alive in a car accident.
Is your job going to keep you from getting a $5 million life insurance policy?
Maybe. Perhaps not. Actuaries at life insurance businesses (the accountants who assess how much life insurance companies will charge for their policies) must also consider criteria depending on the applicants' occupations.
Truck drivers and delivery drivers are high-risk occupations that most people are unaware of. According to the Bureau of Labor Statistics, transportation accidents are one of the leading causes of workplace deaths.
Commercial fisherman, loggers, roofers, farmers, powerline installers/repairmen, touring circus workers, and other dangerous vocations may prevent someone from receiving a million-dollar life insurance coverage.
Also, if you work underwater or at the height of more than three stories, life insurance providers may raise your rate.
If you work in one of these vocations, give us a call so we can refer you to one of our firms that provides life insurance to people who work in high-risk jobs.
Which hobbies affect the process of applying for life insurance?
Okay, so you just got a new Harley. First and foremost, you should have applied for life insurance. Yes, riding a motorcycle might increase your life insurance premiums because life insurance companies prefer to see you in a car wearing a seat belt.
So, before you sign up to jump out of a plane because it's on your bucket list, get a decent deal on a million-dollar life insurance policy immediately.
Here are a few additional activities that will raise your life insurance premiums:
- Mountain Climbing, including rappelling.
- Scuba Diving
- Car racing
- Cave exploring (spelunking)
Why would you even want to get a million-dollar life insurance policy?
Many people purchase life insurance to help pay for funeral expenses or fund their children's college tuition. It's unlikely that you're looking at a multimillion-dollar life insurance policy for either of those reasons.
The majority of these substantial death benefits apps are used in a business or personal will. This could be used to support corporate buy-sell agreements or key man life insurance policies for a company or to pay estate taxes for a person.
Individuals and businesses may require substantial insurance to pay off debts in the event of an unexpected death or provide for a generous donation to a charity in the name of an individual or corporation to leave a lasting legacy.
If you don't like what you hear, get a second opinion.
If your initial premium is significantly greater than you thought, shop around for the best life insurance rates. It's worth noting that we've already taken care of this for you as an independent insurance firm. We had a client who was a real estate developer and needed $7 million in life insurance coverage on one occasion. To spread the risk among the two life insurance firms, we split the policy between two carriers.
One carrier rated him Preferred after the medical check, whereas the other ranked him Standard Table 1. Both companies had a $2,000 discrepancy, which perplexed the client and me. We attempted to negotiate with the company, but their underwriter saw something the others did not, and they refused to budge. As a result, we shopped the policy with a third insurance firm to find the least priced option, saving the customer money while diversifying his extensive coverage.
We hope this has answered your question about how much a million-dollar life insurance coverage costs altogether.
If you have any more worries about life insurance, please do not hesitate to contact us. We are always delighted to address your individual needs.