When I was a young agent, I used to think $1 Million to $2 Million of term life insurance was a lot of coverage.
Well, I have learned over the years from seeing first hand the heartbreak of insufficient coverage, and of course, thinking of my own family, 1-2 Million is not a lot of coverage.
You may be wondering if you need that much coverage. And more importantly, how to get the best price.
We’ve got you covered!
For an immediate coverage decision up to $2 million, consider Haven Life. Click here to view rates.
Who Needs $1 Million to $2 Million in Life Insurance Coverage?
With 10+ years of experience and hundreds of clients under my belt, I can easily make an argument for why a spouse, parent, or business owner might need $1 Million to $2 Million of term life insurance.
I’ve also know that you don’t have to break the bank when you buy a million dollar policy – it’s affordable.
One Quick Example
Let’s say the income-earner is a 40 year old male in excellent health, he’ll pay just $66.52 per month for a 20 year term policy with $1,000,000 in coverage!
Wow. Now that’s incredible! This is how he qualified for that rate:
He’s 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 a $1,000,000 nest egg invested conservatively will earn 5%, that will generate $50,000 per year…which means she could live off the interest without ever depleting the principal.
NOTE: You could even argue she needs more than a million, because where are you going to earn 5% in this day and age?
So what happens when that income earner makes $80,000 – $100,000 per year? The need for coverage increases to $2,000,000 in life insurance.
But is it affordable?
Let’s check out some additional sample rates below:
$1 Million to $2 Million – 20 Year Term Quotes
The sample quotes below are for a non-smoking male in excellent health for a 20 year term. Please note that use of medications or health history may or may not increase the premium.
*NOTE: 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.
Actual rates will depend on your specific health, family health history, and state of residence. Again these are 20 year term quotes. If you would like to see a quote for a 10, 15, or 30 years (or permanent), fill out our free no-obligation quote form.
Pre-existing health conditions?
AIG Direct specializes in insuring people just like you. From high blood pressure to diabetes, AIG Direct has seen it all and since they have access to multiple companies, they can find you the absolute lowest rates! Click below to see if you qualify.
Quotes are quick, easy, and free!
What If I Have a Pre-existing Medical Issue?
The good news is if have well-controlled hypertension or cholesterol, you may even be able to qualify for Preferred rate classes, such as the rates quoted above.
In the case of well-controlled diabetes with no other medical issues, a Standard classification is easily obtained. Even preferred is a possibility with a recent diagnosis over the age of 55 with low a1c.
Smoking won’t prevent you from getting approved either, but again, you’ll want to check out our savings guide for the best results.
A history of other medical conditions could push you out of the preferred rates. Heart disease (stents, bypass, heart attack, etc), cancer, hazardous hobbies, occupation or travel, and many other factors may make you ineligible for that category.
If you have a preexisting condition call us for a quote, we can help you find the best possible company.
Is a $2 Million Policy a Good Investment?
Sounds like a lot doesn’t it?…but if you can afford the premium, this could be the best investment you ever made.
Let’s say you purchased this policy at age 60 for $2 Million in coverage for a 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 20 years it would be 20%.
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
Guaranteed universal life insurance 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 for whole life, you pay extra premiums that build up as cash value.
Most Americans would probably balk at the idea that they might need $1 Million to $2 Million of term life insurance.
Unfortunately, many of these people are wrong!
Because a large number tend to underestimate how much life insurance may be needed and are under insured as a result.
One of the main issues is quite simple. Most people are more likely buy life insurance when they are younger and don’t consider the big picture of where they might be 20 – 25 years later.
It’s difficult to picture what your future family will need down the road. Variable factors such as increases in income, additional children and large mortgages may be tough to imagine in your youth.
Another factor which many people neglect to keep in mind is that inflation keeps increasing over time.
A large number of Americans own and operate their own businesses. You may be a well-paid consultant, a professional, skilled trade’s person or the owner of a mid to large size company – but one thing holds true for all business owners – life insurance is vital to the security of your family.
Skip the Needles!
Want to take the “pain” out of life insurance? We don’t blame you! Bestow is one of our top recommended no-exam companies offering 10 and 20 year plans up to age 55. See if you qualify for “no exam” today.