There was a time when I use to think that $3 Million, $4 million or $5 Million of term life insurance were policies that nobody would want to buy. However, I can now say that with many years of experience under my belt, there are plenty of reasons why someone such as parents, spouses and especially those who own a business could easily need $3 Million to $5 Million of life insurance.
You might be surprised to learn there are many affluent families who actually pay anywhere from between $10,000 to over $100,000 per year on life insurance.
Quick Guide to $3 Million to $5 Million of Life Insurance
- Reasons Why the Affluent Purchase These Policies
- Quotes for $3 Million to $5 Million of Life Insurance
- Qualifying With Health Issues
- Benefits of Buying $3 Million to $5 Million of Life Insurance
- Universal Life or Whole Life
The affluent aren’t buying these policies because they worry about becoming destitute. The reason for buying large policies is simple because these are people understand that life insurance is one of the best financial means available to “leverage their dollars”.
Let’s take a look at one possible scenario.
Dave and Jennifer have selected to purchase a $5,000,000 second-to-die permanent life insurance policy which will cost $107,264 annually for a premium.Jennifer, who is 72 years old, will have the greater life expectancy as the Social Security Actuarial Table predicts she will survive to be 87 years of age.
If she lives to be 87 life expectancy, then the couple would have paid a total of $1,608,960 and will have a guaranteed return of $5,000,000 which would be payable to their estate!
This calculates into a hefty after-tax ROI equivalent to 13.2% per year! This same approach can be use for those who are looking for either 3 million of life insurance or for 4 million of life insurance.
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||$99.00||$131.00||$162.00|
|40 years old||$150.00||$198.00||$246.00|
|50 years old||$431.00||$572.00||$714.00|
|60 years old||$1,231.00||$1,640.00||$2,059.00|
|70 years old||$4,654.00||$6,205.00||$7,755.00|
|80 years old||$14,138.00||$18,849.00||$23,560.00|
Please note all quotes above are MONTHLY premiums for a MALE, 20 year term. The two exception for $4,000,000 of life insurance and $5,000,000 of life insurance 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.
What about health issues where you are taking medication to control cholesterol, diabetes or have high blood pressure?
In most instances, you will be covered so long as these medical conditions are under control. It is even possible you may still be eligible for a “Preferred” rating if you are otherwise healthy.
Even a person who is over the age of 55 and looking for 3 million of life insurance, 4 million of life insurance or even 5 million of life insurance and has bee recently diagnosed with diabetes and has a low alc can qualify for a “Standard” rating.
There are other health and lifestyle reasons why you might not get a preferred rate such as if you recently had a heart attack or have recently recovered from cancer, or if you engage in hazardous occupations, hobbies and other rating factors. That’s why we always recommend that you discuss your particular situation and call us for a personalized quote.
Yes! You can actually see a huge financial benefit by buying a large policy including:
• A life insurance policy will provides money that is immediately available to the estate to cover estate taxes
• You can also remove some or all of the death benefits from the estate so it is not subject to estate taxes
• And, by paying the estimated $107K in premiums on annually, the effect would be to lower the value of the estate which will also reduce the tax liability of the estate.
• It preserves their estate
• The effect will also be to enhance the overall estate value
Let’s also look at it from another perspective.
Suppose you were 65 and bought a $3,000,000 policies providing you were affluent enough to afford the premium. It would cost you approximately $27,300 per year for a premium. Were you to survive 10 more years, it would have cost a total of $274,000 but your beneficiaries would receive $3,000,000.
Were you to invest this money in another investment vehicle, you would need to earn an annual rate of return of 42.09%!
What if you wanted to give money to a charity?
Can it be advantageous to buy a larger policy to use some of the proceeds which you donate to your favorite charity which you have named as a beneficiary?
Donating gifts of life insurance to charity instead of using other assets has several significant benefits including:
• Life insurance can avoid probate and avoid any difficulties in settling the estate
• More money can be given to the charity which allows them extra funds for other projects
• Large donations attracts more publicity which can garner more donors
• Your estate will get a tax deduction
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 3 Million of life insurance, 4 Million of life insurance and 5 Million of life insurance dollars 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.
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