Updated: November 20, 2024
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The average monthly cost for a $1 million term life insurance policy is around $53. This level of coverage can offer substantial financial security for your loved ones, covering funeral expenses, mortgage payments, educational costs and day-to-day living expenses for years to come. It's a way to ensure that your family maintains their standard of living and achieves long-term financial goals, even in your absence.
Why Trust MoneyGeek? We analyzed 1,488 life insurance quotes to determine the average cost of a $1 million life insurance policy for a variety of needs.
Coverage costs and company information for life insurance providers were updated in 2024.
The average monthly cost of a $1 million life insurance policy is $53 for a 10-year term and $83 for a 20-year term.
Rates for $1 million life insurance policies vary between insurers. Transamerica and GEICO offer the lowest rates at this level.
Several factors affect policy premiums for $1 million life insurance plans. These include your term length, your age and whether you have pre-existing health conditions.
The average cost of a million dollar term life insurance policy that lasts for 10 years is $53 per month, while a 20-year term with the same coverage amount costs an average of $83 per month. Opting for a $1 million life insurance policy cost means higher monthly premiums than lower coverage amounts because insurers assume greater financial risk in the event of your passing.
Several factors can affect the monthly premium for a $1 million policy:
Age
Younger applicants generally pay less.
Health Status
Medical exams can reveal conditions that might hike your premiums, like being overweight.
Smoking Habits
Non-smokers usually receive lower rates.
Occupation
High-risk jobs may result in higher premiums.
Policy Term
Longer terms usually come with higher monthly costs.
Gender
Statistics indicate that women often pay less than men.
Lifestyle
Risky hobbies like skydiving can increase your rate.
Family Medical History
A history of certain diseases can also affect your premium.
Understanding these elements may help you anticipate the cost of a $1 million life insurance policy and even adjust some variables to your advantage.
Term length refers to the duration your life insurance policy will remain active, typically ranging from 10 to 30 years. The term length you choose impacts the premium of a million dollar term life insurance significantly.
Generally, shorter terms, like a 10-year policy, will have lower monthly payments for $1 million life insurance. The insurer takes on less long-term risk, as the odds of your beneficiaries filing a claim are statistically lower within a shorter time frame.
Conversely, a 20-year term life insurance with $1 million coverage will have higher premiums because the insurance company is committing to a more extended period and assuming a higher risk of you filing a claim. The table below illustrates the cost differences by term length for a $1 million term life policy.
| 10-Year Term | $53 |
| 20-Year Term | $83 |
Many term policies have "auto-renewal" features when the term expires — you don't need to go through the underwriting process again, but the rate may change. — Mark Friedlander, Director, Corporate Communications, Insurance Information Institute.
Age plays a pivotal role in determining the cost of a $1 million term life insurance. Younger policyholders usually face lower premiums. Insurance companies view younger applicants as lower risk since they are often healthier and have a longer life expectancy. As you age, the likelihood of health issues increases, making you a higher risk for the insurer. Consequently, premiums rise with each passing year.
If you're considering a $1 million term life policy, locking in a rate while you're younger can offer long-term cost benefits. The table below showcases how monthly premiums for $1 million term life insurance change for different age groups, from 30 to 70 years old.
| 30 | $35 |
| 40 | $53 |
| 50 | $117 |
| 60 | $271 |
| 70 | $719 |
Smoking has a significant impact on the cost of million-dollar life insurance, primarily due to the health risks associated with tobacco use. Insurers consider smokers to be higher-risk clients, which is reflected in increased premiums. Smokers can expect to pay higher rates than non-smokers for a $1 million life insurance policy.
The increased rates reflect the potential for early death and the possibility of smoking-related illnesses that might increase the cost of insurance claims. Hence, the 1 million term life insurance rates for smokers remain considerably higher than those for their non-smoking counterparts. This pricing strategy ensures that the insurer can cover the potential risk of early payouts, maintaining financial balance.
The table below highlights the average monthly costs of a $1 million term life insurance policy for smokers.
| 10-Year Term | $125 |
| 20-Year Term | $196 |
Your health profile plays a significant role in determining your $1 million life insurance cost. Insurance providers often require a medical exam to assess key health metrics such as weight, blood pressure and cholesterol levels. Poor health metrics generally increase premiums, as individuals with poorer health represent a higher risk.
The cost of $1 million of term life insurance will reflect the increased likelihood of health-related claims for those in poor health. Below are the average monthly costs for a $1 million life insurance policy for individuals with health concerns.
| 10-Year Term | $65 |
| 20-Year Term | $103 |
The cost of a million-dollar life insurance policy differs significantly between permanent life insurance and term life insurance. Permanent policies, which include whole and universal life, often have premiums up to 15 times higher than term life premiums. How much higher depends on factors like age, health and the specifics of the policy.
The higher premiums are because permanent life insurance, such as $1 million whole life insurance, offers lifelong coverage and a cash value component that can grow over time. Insurers price these policies higher due to the extended coverage period and the investment-like benefits.
In contrast, term life insurance provides coverage for a set period, such as 10, 20 or 30 years. Because the policy will expire if you outlive the term, insurers generally face a lower risk of a payout, making these policies more affordable.
The better choice between the two depends on your individual needs and long-term financial goals. If you're looking for budget-friendly, straightforward coverage for a specific time frame — perhaps until you pay off your mortgage or your children are financially independent — term life insurance is often the sensible option. A permanent policy may be more suitable if you seek a policy that offers lifetime coverage and investment opportunities.
40-Year-Old Male Policyholder
$2940-Year-Old Male Policyholder
$53This is 83% more expensive.
Instant life insurance allows for quick policy approval, often within minutes or hours; it also doesn't require a medical exam. You can secure a $1 million policy without undergoing health tests, streamlining the application process. However, insurers compensate for the lack of health information by charging more, as they're taking on an undefined risk level for the coverage provided.
You can acquire a 1 million dollar life insurance policy from traditional insurance companies and online brokers. Various platforms allow you to compare rates and policy terms, making finding a plan that suits your needs easier.
Transamerica and GEICO tie for offering the cheapest 10-year $1 million term policies, with an average monthly premium of $26. Allstate follows closely behind at around $29 per month. These $1 million term life insurance rates make it feasible to obtain substantial coverage without breaking the bank.
The table below details the average monthly premiums for a 10-year $1 million term life policy from different companies so you can make an informed choice.
| GEICO | $26 |
| Transamerica | $26 |
| Allstate | $29 |
| Protective | $31 |
| Nationwide | $33 |
| AAA | $42 |
| Mutual of Omaha | $46 |
| State Farm | $48 |
| Prudential | $63 |
| Haven | $70 |
| Bestow | $88 |
| Fidelity | $93 |
| Progressive | $93 |
Determining the need for a $1 million life insurance policy hinges on evaluating your total financial obligations and the income required to maintain your family's lifestyle, minus any existing assets and insurance.
To decide how much life insurance you need, begin by tallying your financial obligations. These can include your mortgage, car loans, children's educational expenses and anticipated future costs like college or weddings. Add to this the income your family would need to maintain their current standard of living in your absence. Then, subtract any savings, investments and existing life insurance. The remaining sum will guide you in choosing your proper coverage.
For example, if you have a $300,000 mortgage, anticipate $200,000 in educational costs and want to provide $500,000 for income replacement. These add up to $1 million, making a million-dollar life insurance policy a fitting choice.
The highest life insurance policy a person can obtain varies significantly based on the insurer, the individual's financial situation and their insurability. Typically, policies can range extensively, with high-net-worth individuals securing coverage that can be upwards of tens or even hundreds of millions of dollars. Insurers evaluate potential risks, financial justifications for the coverage amount and the policyholder's overall health and income to determine the maximum coverage. Coverage amounting to hundreds of millions of dollars tends to be rare.
For many, a $1 million life insurance policy represents substantial coverage, which can significantly aid in securing their family's financial future. Obtaining a life insurance policy with a 1 million dollar coverage amount usually involves detailed financial assessments and, in some cases, medical exams to justify the need for high coverage levels.
When considering a $1 million life insurance policy, a strategic approach can help you get the best deal and ensure that your coverage meets your needs. Here are steps on how to get a million-dollar life insurance policy:
If you prepare adequately and find the right coverage for your family's needs and financial profile, you can secure the best million-dollar life insurance policy to provide substantial financial security.
The most expensive life insurance policy typically correlates with the highest coverage amounts, often reaching the multi-million dollar range. These policies, such as million-dollar whole life insurance policies and million-dollar term life insurance policies, carry hefty premiums due to the significant financial protection they offer.
The costliest policies are usually purchased by those with extensive assets or large financial responsibilities that warrant such high coverage. Premiums can vary widely based on factors such as the policyholder’s age, health and the term length of the policy. For instance, a 30-year term life insurance with $1 million coverage is often among the more expensive options.
A $1 million life insurance policy might seem excessive, but it's attainable and sensible for many individuals. To help you determine if this coverage amount suits your needs, we've answered some frequently asked questions.
The average monthly premium for a $1 million term life insurance policy is $53. However, your actual cost may vary based on several factors, including your age, health and the type of policy you choose.
A $1 million life insurance policy provides a lump-sum payment of $1 million to your designated beneficiaries upon your death. This financial safety net can cover mortgage payments, educational expenses and other debts. It can also help recover lost income, easing the financial burden on your loved ones.
One way to determine whether you need $1 million in life insurance coverage is to look at your income. Ideally, your coverage should be at least 10 to 12 times what you earn in a year.
You might also consider the balance of your debts, such as a mortgage, student loans or business loans. A $1 million policy may also provide funds for future expenses like your children’s college tuition or living expenses for a child with special needs.
Yes, some companies offer instant life insurance policies. This means you won’t have to complete a medical exam; if you qualify, the insurer can approve your application in minutes. If you’re interested in such policies, consider insurers like Ethos and Jenny Life.
For a 50-year-old man, the average monthly cost of a million-dollar 10-year term life insurance policy is $117. Opting for a 20-year term increases the average cost to $203.
A 50-year-old woman can expect to pay around $95 per month for a million-dollar 10-year term life insurance policy. A 20-year term for the same coverage averages $156 monthly.
The cost of a million-dollar life insurance policy for a 60-year-old varies by gender. For men, it's $271 per month for a 10-year term and $556 for a 20-year term. For women, the costs are $187 and $391 monthly for ten and 20-year terms, respectively.
For a 70-year-old man, a million-dollar life insurance policy costs approximately $719 per month for a 10-year term. A 20-year term policy averages $2,988 monthly.
To obtain a million-dollar life insurance policy, start by comparing quotes from reputable insurers, considering both term and permanent options. Evaluate your financial needs, assess policy features and consult a financial advisor for tailored advice.
You can obtain a $1 million life insurance policy from many major insurers. Companies offer both 1-million-dollar term life insurance policy and 1-million-dollar whole life insurance policy options, depending on your financial goals and health profile.
The highest life insurance policy can reach into the hundreds of millions, particularly for high-net-worth individuals needing significant financial protection for estate or business planning. These are often structured through multiple insurers.
The cash value of a 1-million-dollar life insurance policy largely depends on the type of policy. Cash value is an important feature primarily associated with permanent life insurance options like whole and universal life policies. As the policy matures, a portion of the premiums paid accumulates as cash value, which can grow tax-deferred over the policyholder's lifetime. This accumulated cash can be accessed via loans or withdrawals, providing financial flexibility for the policyholder to cover expenses or invest as needed.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
