Quick answer
A million dollar life insurance policy is standard planning for households replacing a solid income, not a luxury. Coverage of 10 to 15 times annual income puts many families at seven figures, and healthy applicants find level term at this size surprisingly affordable. Insurers verify income to justify the amount, and accelerated underwriting now approves qualifying buyers for $1 million or more with no medical exam.
Improvements in the insurance industry have made it much easier and commonplace to get these kinds of million-dollar policies. Over the course of many years, this policy will serve as income replacement in the event of your untimely demise.
With all of that in mind, here’s what you need to know about million dollar life insurance:
Q: What is the most important factor in qualifying for a million-dollar policy?
A: Your annual income.
Do your financial obligations warrant this kind of policy?
This is most often determined by a Multiple of your Annual Income
| Your Age | Recommended Coverage | Maximum Coverage |
|---|---|---|
| 20-30 | 15x annual income | 20x annual income |
| 31-40 | 15x annual income | 20x annual income |
| 41-50 | 10x annual income | 15x annual income |
| 51-60 | 7x annual income | 10x annual income |
| 61-65 | 5x annual income | 7x annual income |
| 66 or Older | 3x annual income | 5x annual income |
As you would when considering any life insurance policy, you need to consider what financial obligations a potential policy would need to cover.
For example, if you are a 30-something making $50,000 a year, your recommended coverage amount would be somewhere between 15-20 times your salary. Using this metric, you’d be right in the sweet spot for $1 million coverage.
Once you know if your income qualifies, it’s important to consider the expenses that a million-dollar policy could cover. It’s important to consider the expenses that your family would have to cover in the event of your death. These are the kinds of questions you need to be thinking about:
- Do you have outstanding student loan debt?
- How much do you owe on your mortgage?
- What would it cost to put your children through college?
- Do I already have enough saved away as a safety net?
The idea of these questions is to make sure that you aren’t selling yourself short on the kind of coverage you actually need.
Like any life insurance policy, it is meant to be income replacement for 5-10 years after your death, not an increase in income. So, if your long-term expenses total out around $1 million, then this kind of policy might be right for you.
Best companies for no medical exam million dollar life insurance
Accelerated underwriting has made seven-figure no-exam coverage realistic. Instead of labs and fluids, carriers verify prescription histories, medical records, and database checks, and healthy applicants can be approved in days.
Ethos offers up to $2,000,000 of no-exam term coverage for healthy applicants ages 20 to 65, with an instant online decision for many buyers.
Banner Life approves healthy applicants ages 20 to 45 for up to $1,000,000 with no exam through its OPTerm accelerated underwriting path.
Protective extends accelerated underwriting to guaranteed universal life, with up to $1,000,000 of GUL coverage available without an exam for qualifying applicants ages 18 to 55.
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Best companies for million dollar life insurance with a medical exam
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Corebridge Financial (formerly AIG American General)
Corebridge Financial, the former AIG Life and Retirement business, is one of the largest life insurers in the United States.
Its term products regularly price competitively at seven-figure face amounts; verify current financial strength ratings at ambest.com when you compare quotes.
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Banner Life Insurance
Banner Life, the US brand of Legal and General America, has been writing life insurance for more than 70 years and is a perennial price leader in large-face term.
It holds an A+ (Superior) financial strength rating from A.M. Best.
In many cases, this helps determine if you are actually healthy enough for this policy, and the risk of insuring you. But, there are some insurers who offer no medical exam policies which bypass this step entirely. Though, in doing this, they assess your risk by analyzing your medical history, driving records and questions about your lifestyle. All things to keep in mind when considering this avenue for coverage.
If you meet all of these eligibility requirements, then you’re one step closer to getting coverage.
Sample rates for million dollar life insurance
If one spouse qualifies for a million dollar policy, the other spouse qualifies as well!
You may think that only the main income earner in a family can get one million dollars in coverage. When one spouse has all or most of the coverage, the insurance companies run a higher risk of insurance fraud. In consideration of this life insurance coverage is based on household income. This means both of you can get a million in coverage.
P.S. We don’t want our spouses to be tempted :)
The general rule of thumb is that 2% of your yearly income should be spent on life insurance.
If you compare million-dollar term coverage to whole life, you may be surprised by the price difference. This means that you could be paying way more for a whole life policy versus an equivalent term policy with $1 million of coverage. For this reason, you should weigh your options. If you meet the eligibility and health requirements, then million-dollar life insurance might be right for you.
Is million dollar life insurance actually affordable?
In the end, you’re the only one who really knows if a million-dollar policy is right for your life insurance needs. As noted above, this often depends on your income and health, so you will want to take those into consideration before making any big decisions. You can even input some of that basic information into a calculator and see how affordable your monthly premiums might be as well.
Our recommendation is to purchase as much life insurance as you qualify for.
If you decide to explore these policies further, Insurancy has plenty of tools to help you compare quotes from many providers. This way you can find the million-dollar policy that will fit you best.
