When I was a young agent, I used to think $1 Million to $2 Million of term life insurance was a lot of coverage. But now with hundreds of clients and 7 years of experience, I can easily make an argument for why a spouse, parent, or business owner might need 1 or 2 Million of term life insurance.
Here’s one quick example. Let’s take a young husband and father making $50,000 per year. He wants to leave his wife enough coverage to replace his income indefinitely. After all, she’ll need to be able to pay the mortgage and other bills, raise the children, and put them through college.
He would need at least a 20 year term, $1,000,000 policy on his life. If we assume 1 Million will earn 5%, that will generate $50,000 per year, and she could live off the interest without ever depleting the principal. You could even argue she needs more than a million, because where are going to get 5% in this day and age?
This need for coverage easily becomes a $2,000,000 life insurance need when that income earner makes $80,000 – $100,000 per year.
$1,000,000 and $2,000,000 20 year Term Life Insurance Quotes
The quotes below assume MALE, non tobacco user in excellent health. Please note that use of medications or health history may or may not increase the premium. Call us to discuss your case for an individual quote at 877-443-9467.
|30 years old||$37.19||$68.09|
|40 years old||$55.63||$103.69|
|50 years old||$154.44||$303.19|
|60 years old||$424.98||$842.39|
|70 years old||$1,547.64||$3,092.62|
|80 years old||$4,303.82||$8,607.64|
Please note all quotes above are MONTHLY premiums for a MALE, 20 year term. The one exception is for the 80 year old, which is a guaranteed universal life quote, which had to be quoted since no companies offer 20 year term past age 75.
Can I qualify if I take medication for blood pressure, cholesterol, or diabetes?
Yes, in most cases. If your hypertension or cholesterol are well controlled, you may even be able to qualify for Preferred rate classes, such as the rates quoted above.
In the case of diabetes, with good control and no other medical issues, a Standard classification is easily obtained. Even preferred is a possibility with recent diagnosis, low a1c, and diagnosed over age 55.
A history of certain medical conditions could also push you out of the preferred rates, such as a history of heart disease (stints, bypass, heart attack, etc), cancer, hazardous hobbies, occupation or travel, and many other factors apply. For a personalized quote, it’s best to call us.
Does $842 per month for a 20 year term, $2 Million policy sound expensive to you?
If you can afford the premium, this could be the best investment you ever make. Let’s say you purchased this policy at age 60 for $2 Million 20 year term, and lived for 10 years. You would have paid $101,086 into the policy over the 10 years, but your return upon death would be $2 Million. That’s an internal rate of return of 62% per year!
If you lived 15 years, your equivalent rate of return would be 32%, and it would be 20% if you lived 20 years. In other words, if you wanted to accumulate 2 Million dollars over the course of 20 years, and invested $842 per month into an alternate investment, it would need to earn 20% per year to accumulate to $2,000,000. So, yeah, it’s a great investment, if you can afford it.
$1 Million or $2 Million of Universal Life or Whole Life
You can get quotes for guaranteed universal life using our form on the right. This policy is similar to whole life insurance, but without the cash value accumulation. So you pay the lowest amount possible (only the cost of insurance) to provide guaranteed coverage for life, whereas in whole life, you pay extra premiums that build up as cash value.
We primarily sell guaranteed universal life and term life insurance at the 1 and 2 Million dollar levels, since it is so much less expensive than whole life, but if you want to see a quote for whole life, we’re happy to provide this if you call us at 877-443-9467.*Written by Chris Huntley. Huntley Wealth Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.