How much does a million dollar life insurance policy cost?
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 4:33 p.m. UTC Feb. 22, 2024
Editorial Note: Blueprint may earn a commission from affiliate partner links featured here on our site. This commission does not influence our editors' opinions or evaluations. Please view our full advertiser disclosure policy.
Getty Images
Key points
- A $1 million life insurance policy with a 10-year term costs an average of $306 per year, for a healthy 30-year-old.
- Buying life insurance at a younger age can reduce how much you pay for a $1 million policy.
Buying a $1 million life insurance policy could make sense if you have a family and you want to ensure they’re taken care of financially after you’re gone. Your policy could ease the burden of paying final expenses while also providing money to cover basic living expenses, like lingering debts or education expenses for your children or grandchildren.
But is a $1 million life insurance policy too much?
“While a $1 million policy sounds like a lot, in reality — conservatively invested and taking into account inflation — it could provide a reasonable, long-term income replacement of around $40K or $50K a year,” said Barbara Pietrangelo, chair-elect at Life Happens.
Explore life insurance:
Ethos
How much does a $1 million life insurance policy cost?
The cost for a $1 million policy with a 10-year term is around $306 a year, while a 20-year term will cost about $482, according to our analysis of term life insurance rates. These rates are based on a 30-year-old non-smoker in good health.
Your actual cost for a $1 million life insurance policy will depend on your personal risk factors, such as your age and health history. Being a smoker, engaging in risky hobbies or working a dangerous job can also influence your life insurance rates.
Average cost for a $1 million life insurance policy, by age and gender
The average cost of a $1 million life insurance policy depends on several factors, including your age, gender and health, as well as the policy term length you buy.
Annual cost for $1 million,10-year term life insurance policy
| AGE | MALE | FEMALE |
|---|---|---|
| 30 | $337
| $275
|
| 40 | $492
| $407
|
| 50 | $1,249
| $997
|
Annual cost for $1 million, 20-year term life insurance policy
| AGE | MALE | FEMALE |
|---|---|---|
| 30 | $543
| $420
|
| 40 | $840
| $691
|
| 50 | $2,341
| $1,681
|
Annual cost for $1 million, 30-year term life insurance policy
| AGE | MALE | FEMALE |
|---|---|---|
| 30 | $841
| $655
|
| 40 | $1,458
| $1,150
|
| 50 | $4,052
| $2,953
|
Your age and gender will affect the cost of a million dollar life insurance policy:
- Age is a primary rating factor for life insurance. The younger and healthier you are, the less expensive life insurance is to own. Life insurance quotes will rise as you get older. That’s because the life insurance company takes on more risk as your life expectancy declines. Buying coverage when you’re younger means you can lock in cheaper rates.
If you’re a 30-year-old male, waiting until age 40 to buy a $1 million, 20-year term life insurance policy could cost you nearly 55% more. Delaying life insurance until age 50 could mean paying four times more for the same coverage.
The same is true for females. Purchasing a $1 million life insurance policy at age 40 versus age 30 will cost you nearly $300 more per year on average. Meanwhile, you’ll pay over $1,400 more per year if you wait until you turn 50 to get covered. - Gender also influences what you’ll pay for life insurance, as women statistically live longer than men. A longer life expectancy could reduce risk for insurers as there’s a greater chance the insured will outlive a term life policy. That means women typically pay less for life insurance overall.
Here’s a glance at the difference in rates for a $1 million, 20-year term life policy for males and females at different ages:
- Age 30 – Males pay approximately 29% more than females, or $123 more annually.
- Age 40 – Males pay approximately 22% more than females, or $149 more annually.
- Age 50 – Males pay approximately 39% more than females, or $660 more annually.
How to choose a one million dollar life insurance term length
Term life insurance policies are typically available for 5, 10, 15, 20, 25 and 30 year terms. If you prefer coverage that lasts longer, you may want to consider a permanent life insurance policy. These policies are generally more expensive than term policies but last a lifetime.
The longer the term, the more you’ll pay. Here’s how annual premiums for $1 million in life insurance compare for different term lengths.
| TERM | 30-YEAR-OLD MALE | 30-YEAR-OLD FEMALE |
|---|---|---|
10 years
| $337
| $275
|
20 years
| $543
| $420
|
30 years
| $841
| $655
|
Buying a 20-year term life policy instead of a 10-year term costs males approximately 61% more per year, while females pay around 53% more. Choosing a 30-year term over a 10-year term increases the cost by 150% for males and 138% for females.
Whether paying more for additional coverage is justifiable can depend largely on your needs and what amount of life insurance allows you to feel secure. For instance, you may want to purchase a policy that will last until your mortgage is paid off, your children are finished with school, or your spouse has access to their retirement savings.
Reviewing the reason you’re choosing a life insurance policy can help you choose the term that’s best for your and your beneficiaries.
Also, keep in mind that it may be cheaper in the long run to buy a longer term up front, rather than renewing or buying another shorter-term policy when you’re older.
Do you need a $1 million life insurance policy?
A $1 million life insurance policy may be more than enough coverage for some but not enough for others. There are several ways to determine how much life insurance you need. The following factors can help you determine how much life insurance coverage:
- How many years’ worth of salary you’d like to be available for your beneficiary in your absence.
- Your existing savings, including retirement accounts.
- Educational expenses you’d like to cover for your children or grandchildren.
- Your family’s living expenses, including mortgage, utilities and childcare costs.
- Any existing debt you’d like your beneficiary to be able to pay off.
Comparing average premiums for smaller and larger policies can offer perspective on what you might pay for different levels of coverage.
Annual costs for 20-year term life insurance
| COVERAGE AMOUNT | 30-YEAR-OLD MALE | 30-YEAR-OLD FEMALE |
|---|---|---|
$500,000
| $316
| $253
|
$1,000,000
| $543
| $420
|
$2,000,000
| $1,022
| $776
|
As you can see, purchasing $2 million in life insurance costs substantially more than a $500,000 policy, particularly for males.
On average, a $2 million policy costs 223% more than a $500,000 policy for a 30-year-old male in good health. Meanwhile, a 30-year-old female will pay approximately 207% more to upgrade a $500,000 policy to $2 million in coverage.
Talk to a financial professional about your life insurance needs if you’re not sure whether $1 million is enough coverage.
“You wouldn’t want to buy a $1 million house without some help,” said Parrish. “Similarly, buying a large policy may likewise call for the assistance of an advisor.”
Weighing all of your options for getting covered and considering your bigger financial picture can help you to find the right amount of life insurance for your needs at the most affordable cost for your budget.
How to buy $1 million in life insurance
If you’re interested in buying a one million dollar life insurance policy, it pays to shop around and compare life insurance companies. Each company has different underwriting standards that may influence what you pay in premiums, said Steve Parrish, co-director of the Center for Retirement Income at The American College of Financial Services.
Before beginning your search, consider what kind of term you think you’ll need and your reasons for getting covered. Also, consider whether a $1 million policy is best or if a different coverage amount is more appropriate.
Getting life insurance quotes online is the next step. You can get multiple quotes from different insurers for $1 million policies with different term lengths, then consider what best fits your budget.
It’s also helpful to understand what insurers factor in when setting your premiums. Along with age and gender, other things that influence your life insurance rates include:
- Height and weight.
- Health history.
- Medical history of your parents and siblings.
- Medications you’ve taken, past and present.
- Tobacco, alcohol and drug use.
- Lifestyle and hobbies, including the type of job you have.
- Future plans to visit destinations outside the U.S.
You may need to complete a medical exam as part of the underwriting process. The exam may take place at a doctor’s office, your home or your workplace. During the exam, a medical professional will take measurements of your height and weight, check your blood pressure and take urine and blood samples.
If you’d rather skip the exam, you might consider no-exam life insurance. These policies allow you to get covered without a medical exam. However, you might pay more in premiums and not all insurers offer $1 million no-exam policies.
Methodology
We analyzed rates provided by AccuQuote, a national online life insurance agency that works only with top carriers. Term life insurance rates are for nonsmokers of average height and weight who are in excellent health. Your rates will depend on your age, gender, health and other factors.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
