Often we purchase life insurance to provide financial protection to our families in the event of our passing. Because, once the policyholder passes away, their beneficiaries can claim the life insurance death benefit.
Let’s say you want to leave your beneficiaries with a million dollar policy. This should go a long way toward covering mortgage payments, education expenses and other common living expenses.
You may be thinking that a policy with that big of a death benefit may be super expensive. But you might be surprised to learn it’s likely not as bad as you think.
Below we’ll look at how much is a million dollar life insurance policy. You’ll also get an overview of what factors will impact what you end up paying.
One thing to understand first, however, is that there are a number of different options for life insurance policies. So the type of policy you get will be a big factor in how much your policy costs.
How Much Is A Million Dollar Life Insurance Policy?
The short answer to that is it depends. There are various factors that affect the costs of a million-dollar policy. But, believe it or not, a million-dollar life insurance policy is also less expensive than you may think.
Which Factors Influence the Cost?
The things that will have the biggest impact on how much a million dollar policy will cost you include your health, income, age, career or activities, life expectancy, and term length.
Insurers want to see that you’re spending a proportional amount of money based on your earnings (or the earnings of your partner, if you’re a stay-at-home parent). In most cases, you can qualify for coverage worth up to 20-30 times your annual income.
Generally, the younger you are, the more life insurance you can get, and do so at a lower cost. This is based upon the rationale that the younger you are, the less likely you are to develop health problems and pass away.
If you’re in good health, you may be able to qualify for policies with higher coverage limits. Your career, hobbies, and activities can also affect your health, affecting your life insurance rates.
For example, having a high-risk career such as being a roofer or logger, high risk hobbies such as sky diving, or are a smoker can affect your life insurance rates. Gender is also a factor that affects the costs of life insurance. Men tend to pay higher rates than women.
Term length also impacts cost, so consider how long you will need coverage. Most insurers offer term lengths ranging from 10 to 30 years. Longer-term life insurance policies are more expensive, but they allow you to use your current age to lock in a lower rate for a longer period of time.
Price-Demographic Breakdown of Policy Costs
If you’re looking for a single number, then figure the average term life policy with a million dollar death benefit costs around $115 per month for a 45 year old male.
But let us take a deeper look at the average costs of a million-dollar policy based on these factors, especially age. Again, this is for a term life policy.
For 40 years old male policyholders, here is a table:
| Risk Class | 20-Year Term Monthly Premium | 25-Year Term Monthly Premium | 30-Year Term Monthly Premium |
| Preferred Plus | $49 | $77 | $92 |
| Preferred | $65 | $92 | $112 |
| Standard Plus | $90 | $130 | $156 |
| Standard | $101 | $150 | $177 |
For 40 years old female policyholders:
| Risk Class | 20-Year Term Monthly Premium | 25-Year Term Monthly Premium | 30-Year Term Monthly Premium |
| Preferred Plus | $41 | $61 | $74 |
| Preferred | $52 | $74 | $87 |
| Standard Plus | $71 | $101 | $122 |
| Standard | $80 | $125 | $137 |
As the tables outline, there are differences in average costs of million dollar life insurance policies between men and women of the same age. So you can imagine the variation that exists when you introduce other factors into the mix.
So as you can see, although a million dollar life insurance policy may sound expensive. However, this is not necessarily the case. It really depends on your age, health and type of policy plus a few other key factors.
