How Much Does a Million Dollar Life Insurance Policy Cost?

Do You Really Need a $1 Million Term Life Insurance Policy?

Probably, but let’s find out. A general rule of thumb is that you should get 10x your income as baseline coverage for life insurance.

If you’re young, that may be low because you may want to provide your family with enough to replace your income for 15 years or more.

Today, $1 million has become the new baseline forlife insurance by a primary breadwinner. Anything less could leave your family financially impaired.

Typical obligations to add when calculating the amount you need

Here’s a list of all the different obligations you may want to have life insurance cover in the unfortunate event you pass away early.

  • Your income (and for how many years)
  • Your final expenses
  • Any debt you may want to be settled
  • Future obligations such as college for children
  • Other obligations such as business
  • Typical items you can subtract when calculating the amount you need
  • Current life insurance policies
  • Assets (like cash or stock) you might choose to use instead of life insurance

Now that you have an idea of these obligations, let’s punch them into this life insurance calculator to find out if you need a million-dollar policy.


Frequently Asked Questions

How much does a 1 million dollar life insurance policy cost? A $1 million life insurance policy can cost as little as $14.62 a month for a term life insurance policy, $348.25 monthly for whole life insurance, and $182.00 for universal life insurance.How much does a 2 million dollar life insurance policy cost? A $2 million life insurance policy can cost as little as $26.66 a month for a term life insurance policy, $691.25 monthly for whole life insurance, and $353.00 for universal life insurance.How much does a 5 million dollar life insurance policy cost? A $5 million life insurance policy can cost as little as $61.28 a month for a term life insurance policy, $1,720.25 a month for whole life insurance, and $864.00 a month for universal life insurance.How much does a 10 million dollar life insurance policy cost? A $10 million life insurance policy can cost as little as $116.12 monthly for a term life insurance policy, $3,435.25 monthly for whole life insurance, and $1,716.00 for universal life insurance.Who offers the best million-dollar life insurance policy? Because of their higher maximum coverage levels, affordable rates, and strong financial rating with A.M. Best, Banner Life, AIG, and Pacific Life offers the best million-dollar life insurance policy.

How Much Does a Million Dollar Life Insurance Policy Cost?

Let’s face it, becoming a millionaire is something most people only dream of, yet just because you aren’t rich doesn’t mean you shouldn’t consider buying a million-dollar life insurance policy.

Million-dollar insurance is quite common and might be less expensive than you imagine. Check it out for yourself. Get a free quotation for $1 million of term coverage with our no-obligation quotation software. There is no need to submit any contact information to see real-time pricing estimates.

The three most frequent queries that come up when deciding whether a million-dollar policy is appropriate for you are:

  1. Is it possible to acquire a million-dollar life insurance policy?
  2. When do a million dollars of coverage make sense?
  3. Finally, what is the cost of a million-dollar life insurance policy?

Calculate: Life insurance needs calculator

Million Dollar Life Insurance Policies Layered Policies

What is the smartest way to achieve your goal in life insurance ~ the most financially sensible money-saving tip RIGHT HERE!!!

Yes, it is possible.  In fact, layering policies in most cases can save you over 50% on your premiums.

This can translate to tens of thousands of dollars in savings.  The philosophy of layering policies is getting everything you need now, but not paying for something you don’t need down the road.

For instance, having young children cost you more now than say if kids are in college. Also, 20 years down the road your mortgage will be paid down.

So ask yourself this question, will your financial dependency that your family has for you be the same today as it would be 20 years from now?

Average Cost Of A Million Dollar Life Insurance Policy

Steven, a 47-year-old male, with 2 children, 11 and 12 years old.

He makes $65,000 a year.  He is looking to purchase a $1,000,000 dollar 30-year term policy.

If Steven outlived this policy his total financial outlay for over 30 years is, $63,450.00!!

Or Steven can do a one million dollar layered policy as follows:

  • $500,000 for 10 years, monthly payment: $42.00, Total Financial Outlay over years 1-10 is $14,500.00.
  • $250,000 for 20 years, monthly payment: $32.59, Total Financial Outlay between years 11-20, $9,700.00.
  • $250,000 for 30 years, monthly payment: $52.28, Total Financial Outlay between years 21-30, $5,975.00.

Total Financial Outlay over 30 years layering policies is $30,175.00


$33,275.00, that’s 52%!!

As you can see above this is a layered strategy.  Steven’s needs for coverage will decrease after the first 10 years because his children will be grown and most likely out of the house.

In 20 years, his need for life insurance will change again, his home will most likely be paid off so, therefore, the amount of coverage will decrease.

Now, 20 years later, Steven has reached retirement age.

Furthermore, at retirement age, you are on a fixed income!! So ask yourself, would you rather have a premium payment of $185.06 a month for coverage you don’t need or $52.28 on coverage that you do?

Plus another $33,275.00 that’s back in your pocket!

One Million Dollar Life Insurance Policy

To determine the amount of life insurance you need, we focus on the mortgage, college, the age of your children.  Two important factors are:

  • Age of your youngest child
  • Your annual income *(your paycheck dies with you)

This is the best way to calculate what your family will need to live and maintain his or her standard of living in the event of your death especially unexpectedly.

With that being said, if your children are grown up and are no longer financially dependent on you, your financial obligations will change.

You can always consider getting a smaller plan.   Such as a half million dollar life insurance policy.

But as you can see…

Planning to purchase a $1,000,000 (one million) policy would make the most sense when you factor in the standard of living for your family to continue to live the life you planned for them financially.

Keep in mind, term life insurance can provide maximum death benefit at the lowest cost.

For this reason, the most common type of term insurance is a guaranteed level premium term life insurance. For this reason, depending on age, you can get terms of 10, 15, 20 and 30 years.

The premium is guaranteed not to increase for the life of the term period.

Hopefully, in the near future companies offer a one million dollar policy without a life insurance medical exam.


When it comes to thinking about life insurance.  For the most part, think of it this way,  how much life insurance should you purchase? Life insurance is an investment.

An investment in your family and their future in the event of your death.

Focus on your youngest child, and if you plan on having more children, your children depend on you the most. 

How much will life insurance cost?  We determine your annual income and your children’s ages. See below for our breakdown.

Secure Your Families Future


Your Children by age:

  • 5 years of age or younger:  20x your annual income  (your youngest child, needs you the most)
  • 6-10 years of age: 15x your annual income
  • 10 years of age – older: bare minimum 10x your annual income

1 Million Dollar Term Life Insurance


Quit Smoking!!!

You’ll want to make an excellent impression on the insurance company when you go to apply for life insurance.

In the long run, one of the best things you can do is to quit using tobacco; tobacco users usually pay 2 to 3 times more for their life insurance.

Remember, if you do smoke, do not let this discourage you from applying for life insurance.  

Speak to your independent agent.  

He/she is the one who will know the right carrier that fits your health, lifestyle, and needs!

Anything you can do to improve your general health will also do loads to help.

In fact,  before applying, we recommend exercising frequently, eating healthy, taking measure to lower your blood pressure, etc.

Unless you go with the more expensive no medical exam policy, you’ll need to take a physical.

As a result, you’ll need to disclose any pre-existing health conditionsto the life insurance company as well.

Lastly, we always recommend shopping at life insurance companies before settling on one.

For this reason, you can hire an independent life insurance agent to help you. This way, you’ll get connected to the top life insurance companies, and find the cheapest policies with the best coverage.

Term life insurance has the lowest prices and is for a specific amount of time, such as 10, 20, 30 years.

Let’s calculate your life insurance need



How much debt do you need to pay off?

If you want to help with the cost of college tuition, how much would you like to cover?

How much do you want to add for burial expenses?


Qualifying For A 1MM Term Life Insurance – Financial and Medical Requirements

Financial qualifications for life insurance are based on your income, or your spouse’s income if you aren’t working. Life insurance companies use a multiple of your income to determine how much coverage you could qualify for. Below are some guidelines to help you figure out how much life insurance you can qualify for. Note that any policy you have at work will not count in the calculation, but if you have other existing policies that you won’t be replacing with a new policy, that number should be included in the total.

  • Under Age 40 – 25 Times Annual Income. You would need to earn $40,000 a year to qualify.
  • Age 41-50 – 20 Times Annual Income – You would need to earn $50,000 a year to qualify
  • Age 51-55 15 Times Annual Income – $66,000 to qualify.
  • Age 56-65 10 Times Annual Income – $100,000 to qualify.
  • Age 66-70 5 Times Annual Income – $200,000 to qualify.
  • Age 71+ – Based on financial situation.

If you’re buying a policy for estate planning purposes it’s possible that if you don’t meet the income qualifications, that you could qualify based on your assets.

Term Life Insurance vs. Whole Life?

Any discussion on life insurance should include a comparison of whole life and term life insurance coverage. After all, both products can be immensely valuable in the right situation, yet one product (whole life) costs considerably more than the other.

Most of the time, the debate is settled in favor of term life insurance based on cost alone.

A whole life insurance policy can easily cost 10x the same amount of coverage you can get with a term policy.

With that being said, whole life insurance and other investment-type life insurance coverage can be valuable in terms of the cash value you can build up over time. Whole life insurance also offers a fixed benefit amount for your heirs that will last for your entire life, yet the cost of your premiums are guaranteed to stay the same.

The cash value of a whole life insurance policy also grows on a tax-deferred basis, and you can borrow against this amount if you need a loan. Further, many whole life policies from reputable providers also pay out dividends during good years, which can be substantial.

Why young families choose term coverage

The problem with whole life and other similar policies like universal life is the fact that premiums can be exorbitant for the amount of coverage you might need.

A couple with young children provides a good example since they might need a $1 million dollar policy or more to provide income protection for their working years and have money left for college tuition and other expenses.

With young families, expenses are already high.

This includes costs for food for a family, childcare, heavy use of health care, and the seemingly endless demand for clothing, furniture, and even entertainment as the children grow.

As you can see from the cost comparison below from State Farm, there’s not enough room in the typical family budget to afford the type of life insurance that’s needed.

A 40-year-old mother and breadwinner in excellent health would pay $80.09 per month for a term life policy that lasts 20 years, whereas a whole life policy in the same amount would cost $1,266.69 per month (or $14,560 annually).

This is a classic situation where term insurance rides to the rescue. The family can afford to buy the amount of coverage they need at an affordable price, whereas paying for permanent life insurance coverage in the same amount would be difficult to justify.

And just as important for people of any age and in any circumstance, the extra funds not being spent on insurance premiums can be invested to gradually improve your financial situation.

So absolutely, term insurance will work best for most people.

Can I Get $1,000,000 Whole Life Without A Medical?

In reality, you can’t get 1 million of whole life insurance without a medical exam. However, we know of a company that will get your whole life insurance up to $400,000 without having to do a medical test.

You will still need to answer medical questions, but it will not require blood and urine.

You should only consider this option if you have health issues. A medical test is used to determine your health rating. The actual value of a whole life will improve if you get a better health rating.

If you still want to get a non-Medical $1,000,000 whole life, then we would suggest getting $400,000 non-Medical, and then $600,000 in a whole life with a medical.  

$1,000,000 Single Premium Whole Life

Another option is to do a Single Premium Whole Life if you have the funds. Because this whole life is paid upfront, many companies will not require a medical exam.

So this way, you will be able to get a $1,000,000 whole life insurance without a medical exam.

Guaranteed Issue Life Insurance $1M Cost

Another option to get a million-dollar policy is a $1,000,000 guaranteed issue policy. Some policies are term some are whole life. The good news is that you will not have to worry about getting approved. If you decide to get a guarantee issue term, the cost will be much cheaper.

Get a $1,000,000 guaranteed issue quote.

$1,000,000 Convertible Term to Whole Life

If you still can not decide on a $1,000,000 whole life policy is right for you. However, don’t hesitate to consider buying a convertible term insurance policy first. This is a fantastic strategy, especially at younger ages.

You can buy a term policy today for $1,000,000 and change that policy into whole life in the future. You can even decide to change only a portion of the $1,000,000 if you do not want to convert the entire term policy. The best part about this is you will not be required to perform any medical exams at the time of conversion.

Check out your $1,000,000 Convertible Term Quote

$1 Million Term Life Insurance Rates by Term Length

If you want a life insurance policy that lasts longer, you’ll pay more. Finding the right length for you will depend on the concern you want to cover with life insurance.

You don’t want your policy to expire before the financial needs of your family are met. On the other hand, you may not need a longer term if you buy the policy at an older age when some of your debts have been paid off or decreased substantially.

For a $1 million policy, determine which term length is best for your particular circumstances. Don’t assume a longer term won’t fit your budget before pricing it out.

Here we compare costs for various length policies for a 30-year-old male and female.

Term Male Female
10-year term $312 $264
15-year term $348 $324
20-year term $480 $348
30-year term $780 $588

Our analysis found that:

  • Upgrading from a 10-year term to a 15-year policy raises rates 12% for males and 23% for females.
  • Moving from a 10-year to a 20-year policy costs males 50% more but only costs females about 30% more.
  • For either gender, it’s a decent deal to double the time of your term life insurance policy and not even come close to doubling your premium.
  • To triple the time of the policy to 30 years from 10, it raises rates 150% for males and 123% for females.

Cash Value Accumulation

We are not displaying the cash value accumulation in our original table because we want to keep things simple.

Cash value adds another important layer to your whole life insurance. Imagine cash value like a saving portion of your whole life insurance. Also, this savings portion grows each year and that can be accessed at any time.

Certain policies grow cash value much faster than others, so you need to know which company to pick. The easiest way to compare the cash value accumulation is to get an online whole life insurance quote with us.

In addition, if you want to get maximum cash value growth you should consider whole life policies that are participating. Because these types of whole life policies will get a dividend to help the cash value grow much faster.

For more information on cash value check out our article: Top 7 Whole Life Companies For Cash Value

1 Million Dollar Insurance Policy

People are always surprised at how much life insurance it takes to receive the proper amount of coverage for their family. Some people assume that $100,000 will certainly be enough.

However, as alluded to above, life insurance goes quickly — there are a lot of living expenses to cover. Even a million-dollar life insurance policy ($1,000,000) might not be enough for full coverage.

In fact, the average cost of a child is about $250,000 from age 0-18! So it is important to shop and find the best 1 million dollar term life insurance quotes to choose from.

Many clients are interested in knowing what a 1 million life insurance policy costs, I advise you to also ask us about Indexed universal life insurance (IUL) as well as term million-dollar quotes.

This type of policy allows the owner to distribute cash value amounts to either a fixed account or an equity index account.  These policies are similar to the S&P 500.  There are pros and cons to IUL’s.

Why do I need a million dollars of life insurance coverage?

Different personal financial situations will dictate one’s need for a substantial benefit. While your needs will be unique to yourself and those you are aiming to financially protect, some of the many reasons Canadians contemplate a million dollars of life insurance include:

  • Covering an outstanding mortgage debt, loans, or joint lines of credit
  • The cost of living for a partner, children, or other dependents left behind
  • Education costs for children who are no longer legally dependent but still looking to you to help with these costs
  • Covering a business partner to ensure the survival of the business should something happen to you

If you are not sure if a million dollars of life insurance is the right amount for your circumstances, there’s an easy way to check the numbers. Check out our life insurance calculator; it only takes 5 minutes to answer a few basic questions and reveal exactly how much coverage you need.

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