iQuanti: A million dollar life insurance policy might seem like a lot, but since life insurance helps your family replace your income and pay off your debts, you might find it’s the right one amount for your needs.
That said, this level of coverage can cost more than a
Factors Affecting a Million Dollar Life Insurance Policy
Many factors can increase or decrease the cost of your million dollar life insurance policy. Keep these in mind when shopping:
Longer life insurance terms cost more in monthly premiums. For example, Forbes found that a 30-year-old man would pay approximately
The cost of a $1 million term life insurance policy will vary depending on the type of policy:
- Term life insurance contract: Term life insurance lasts for a fixed term, usually 10 to 30 years. After your term ends, you will need to get a new policy to continue to be covered. Term life insurance policies generally offer affordable premiums.
- Permanent life insurance policy: This type of policy lasts for your lifetime and has a cash value growth component. Cash value generates tax-deferred interest and allows you to build wealth over time. With these policies, keep in mind that the premiums tend to be more expensive.
Riders are additional forms of coverage that you can add to your life insurance policy to customize your coverage. For example, a terminal illness rider allows you to access part of your death benefit during your lifetime if you are diagnosed with a terminal illness. You can use the funds for anything you need, including medical expenses and income replacement. Adding certain riders to a million dollar life insurance policy can lead to higher premium payments.
Premiums generally increase with age. For example, a 30-year-old man will pay lower premiums for a million dollar life insurance policy than a 50-year-old man with the same term and death benefit. So getting a life insurance policy while you’re younger can help you pay lower premiums.
Gender also plays a role in premiums. Men generally pay more on average for life insurance premiums than women because women have a longer average life expectancy.
Health is a major factor in determining your life insurance premiums if you are purchasing a million dollar life insurance policy that requires review. Any conditions or history of conditions may increase your premiums. Similarly, being a smoker can lead to you paying more premiums.
Other lifestyle factors
Some other lifestyle factors like your job can also affect the cost of a million dollar life insurance policy. For example, if you work in an occupation considered high risk, such as an airline pilot or first responder, your premiums may cost more. Likewise, high-risk hobbies like skydiving and auto racing can result in higher life insurance premiums.
The bottom line
Many factors about you, your policy details, your policy type and even your lifestyle can affect the cost of your million dollar life insurance policy. You can’t change some, like your age or gender. But you can have an impact on many other things, such as improving your health, choosing the right tenure, and changing your lifestyle.
Finally, you can shop around with multiple insurers and compare quotes. This can help you find better rates for the same million dollar coverage, saving you money without giving up the insurance you need.
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