Life insurance is important coverage to have. It protects your family and is critical for your financial and retirement plan. Many factors affect life insurance pricing however, and you may be wondering how much you can expect to pay for your life insurance policy.
As you can expect, the higher the benefit from your life insurance policy the greater the cost. Read on to learn more about how much you can expect to pay for a million-dollar life insurance policy and the other factors that determine pricing.
Contact us for more help with your life insurance needs.
Who Needs a Million Dollar Life Insurance Policy?
Assess your needs carefully to help decide the amount of life insurance coverage you need. One general rule insurance carriers sometimes use to start the calculations is estimating 6-10 times your annual salary to find your life insurance needs.
You can also consider expenses that will be left after your passing, such as college funds for children and retirement for a spouse. We can help you estimate these amounts to find your optimal coverage limit. Many people find they do need a million-dollar policy to provide an appropriate death benefit for their loved ones.
What is the Potential Cost of a Million Dollar Life Insurance Policy?
While a million-dollar life insurance policy does not make sense for everyone, it is a coverage level that is appropriate for many families. A family with two young children, for example, could easily require a million-dollar policy to replace the income of the breadwinner over the infancy of the children.
For an individual in good health with no family history and who is in their 30s, a million-dollar 30-year term policy could cost between $45 – 60/month. The same parameters but for an individual in their 40s could range between $77 – $153/month. Health conditions or a family history of certain medical conditions increases premiums from these ranges.
These policies can be surprisingly affordable given the high level of coverage you are purchasing. Considering your family’s needs carefully will guide you in deciding if you need a million-dollar policy. We can help you review your needs and responsibilities to select the appropriate level of coverage to protect your family.
Factors that Affect Life Insurance Pricing
Lots of factors affect the price you pay for life insurance.
Age has a large impact on the price you will pay for life insurance. Older people will pay a higher monthly premium for life insurance coverage than younger people – this is because an older person is likelier to pass away sooner and pay less in premiums. To make the policy an acceptable risk for the carrier, they need to charge more given they will collect premiums over a shorter period of time.
Men in the US have a lower life expectancy than women, although this gap is narrowing. Men can expect to live 75 years, while for women life expectancy is 80 years. To make up for this difference in time to collect premiums, men can expect to pay more for life insurance.
As you might expect, your general health status affects your life insurance costs. You will likely fill out a medical questionnaire and sign releases so your carrier may receive your medical records. You will often be asked to take a medical examination.
Taking medications for chronic conditions like diabetes or high blood pressure may increase your costs. Recent health concerns, like a heart attack or cancer diagnosis, or long-term conditions can also affect your premium.
Your carrier will look at your weight and BMI and use those as a barometer and predictor of overall health. If you are overweight, losing even 10 pounds can help improve your health and lower your life insurance costs.
If you are a smoker, this is another great reason to quit – you pay higher premiums for your life insurance as compared with a non-smoker. Vaping tobacco products is starting to be considered the same risk as using tobacco products in more traditional ways. Quitting now can start to lower your life insurance premiums after only a year of being tobacco-free, so it is well worth the effort.
Unsurprisingly, your immediate family’s medical history can affect the rate you pay for insurance. If your sibling or parents suffered various medical conditions at a young age, it can be a predictor for your health and so your life insurance company will underwrite your policy and may consider this a higher risk.
Your occupation can play a role in how much you pay for life insurance, as well. Airline pilots, loggers, farmers, miners, and commercial fishermen pay more for life insurance than writers, office workers, and salesmen. Jobs with a higher risk of death will result in a higher life insurance premium.
Some people have riskier hobbies than others, and sometimes those hobbies cause us to pay more for life insurance. For example, if your hobbies include visiting cat cafes, touring museums, and reading, you may have less chance of injury or death while engaging in your hobbies as compared with someone who enjoys rock climbing, motocross, and cliff diving. While exhilarating, skydiving and bungee jumping carry a higher risk of death or injury compared with knitting or stamp collecting.
Even your driving history can be a factor when it comes to life insurance costs. This is because accidents on the roads are a large contributor to injuries and death. A driver with a history of driving accidents or tickets for speeding or reckless driving could be more likely to die in a car accident, therefore your driving record is relevant and can be considered in your life insurance rating.
Purchasing life insurance is an important decision. You may find the costs, even for a high level of coverage like a million-dollar policy, are more affordable than you thought. Ask us for more help with determining how much coverage you need and with purchasing a million-dollar life insurance policy.
How do I Learn More?
To learn more about the costs of a million-dollar life insurance policy and how to purchase one to protect your family, reach out to us at EINSURANCE. We’re always happy to help!