How Much Does a $1,000,000 Life Insurance Policy Cost?
Life insurance can be a good investment, and a $1 million policy can ensure financial stability for your loved ones if you die. A policy with this face value will have more expensive monthly premiums than those with lower coverage amounts. Comparing quotes from multiple providers can help you find affordable options.
Compare Life Insurance Rates
Ensure you're getting the best rate for your life insurance. Compare quotes from the top insurance companies.
Many insurers offer life insurance policies with $1,000,000 in coverage, although premiums vary widely. MoneyGeek’s guide helps you determine which the most affordable life insurance companies and what factors could affect your insurance rates.
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Rates for $1,000,000 life insurance policies vary between insurers. The company offering the lowest rates at this level is Transamerica.
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.
It’s possible to purchase an instant life insurance policy at this coverage level. Insurers like Ethos or Jenny Life won’t require you to undergo a medical exam and may approve your application quickly.
How Much Is a $1 Million Life Insurance Policy?
The cost of a $1,000,000 life insurance policy for a 10-year term is $32.05 per month on average. If you prefer a 20-year plan, you’ll pay an average monthly premium of $46.65.
In addition to term length, factors such as your age, health condition or tobacco usage may affect your rates.
MoneyGeek compared several life insurance companies to determine which offers the most affordable rates for $1,000,000 term life insurance. Based on our internal rating system, the top two companies are Transamerica and Nationwide.
Winner: Cheapest $1 Million Life Insurance
Transamerica tops our list. It offers the cheapest rate for a $1,000,000 life insurance policy with a 20-year term at $28.81.
You can choose between two types of term insurance policies: Trendsetter Super and Trendsetter LB. Transamerica provides a good balance between user satisfaction and financial stability.
- MoneyGeek Score: 80
- J.D. Power Rating: 736.4
- AM Best Rating: A
- Average Policy Cost (20-yr Term, $1M Coverage): $28.81
Runner-Up: Cheapest $1 Million Life Insurance
With a slightly higher monthly premium at $35.88, Nationwide comes in second for most affordable life insurance at this coverage level. They offer term, whole, universal and variable life insurance policies.
Nationwide is a financially stable company with above-average customer service ratings. It placed second in J.D. Power’s 2021 U.S. Individual Life Insurance Study.
- MoneyGeek Score: 88.6
- J.D. Power Rating: 785.5
- AM Best Rating: A+
- Average Policy Cost (20-yr Term, $1M Coverage): $35.88
There are multiple options available from insurers when it comes to life insurance coverage amounts. The amount you choose determines how much your beneficiaries will receive when they file a claim after your death. Insurers can provide the payout as a lump sum, installments or an annuity.
If you earn around $100,000 annually, getting a $1,000,000 life insurance policy makes sense. It is also appropriate if you earn less but have substantial debt like a large mortgage or business loan that you need to pay off.
Average Cost of a $1 Million Term Life Insurance Policy by Term Length
Term length refers to your policy’s duration. It’s the length of time you’ll be covered before your life insurance expires. Typically, term life insurance policies have options for 10-, 15-, 20- and 30-year lengths.
Premiums vary across companies and term lengths. Transamerica offers the lowest rates for all term lengths, while Progressive has the most expensive. Find the average cost of $1 million life insurance policies for different term lengths and companies in the table below.
Avg. Monthly Rates for $1 Million Coverage for Different Term Lengths
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- Company10-Year Term15-Year Term20-Year Term30-Year Term
- Mass Mutual$22.19$26.98$36.11$60.47
- State Farm$32.19$37.84$63.49
- Mutual of Omaha$24.28$32.87$38.88$59.93
Average Cost of a $1 Million Term Life Insurance Policy by Age
Many people purchase life insurance in their 30s. Rates tend to increase as you get older because you’re more likely to develop health conditions and less likely to outlive your policy. Both factors make you risker to insure.
A 30-year-old policyholder may only pay a third of the premium amount a 50-year-old does for a 20-year term life plan. You’ll have fewer term length options as you age — insurers only offer 30-year plans to buyers who are age 50 and younger.
Average Monthly Rates for $1 Million Coverage for Different Ages
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- Age10-Year Term Average Cost15-Year Term Average Cost20-Year Term Average Cost30-Year Term Average Cost
Avg. Cost of $1 Million Term Life if You Smoke or Are in Poor Health
Several factors affect life insurance premiums, and health status is one. Buyers with severe health conditions are riskier to insure since they may be less likely than healthier policyholders to outlive their policies.
Lifestyle can also affect your premiums. The life expectancy of people who smoke is at least ten years shorter than people who don't, so insurers tend to price life insurance for smokers much higher.
Rates for consumers who smoke, have poor health or have a high body mass index (BMI) are higher than those for someone in good health. You can see the same pattern across all term lengths.
Policyholders who smoke pay the highest premiums. Even if you’re generally in good health, tobacco use can result in significantly higher rates.
$1 Million Monthly Rates for Smoking, Low-Health & High-BMI
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- Criteria10-Year Term Average Cost15-Year Term Average Cost20-Year Term Average Cost30-Year Term Average Cost
- Poor Health$49.33$59.69$72.24$122.09
- High BMI$44.67$54.05$65.25$110.28
Average Cost of a $1 Million Permanent Life Insurance Policy
Though all of these offer permanent coverage, there are significant differences between them.
Whole life grants you coverage for your entire life as long as you pay your premiums on time. It assures you of a fixed rate, a death benefit and cash value.
Universal life policies are also known as adjustable life insurance. They allow for flexible premiums and an adjustable death benefit. A guaranteed-issue policy doesn’t require you to get a medical exam.
Annual Life Insurance Cost of Permanent vs. Term Life Insurance ($1,000,000 Coverage)
30-Year-Old Male Policyholder$605
30-Year-Old Male Policyholder$12,177
This is 1913% more expensive.
$1 Million Life Insurance With No Medical Exam
Instant life insurance policies don’t require medical exams. If you otherwise meet age and good health benchmarks, insurers may approve your application within minutes.
These are convenient and contactless, making them in-demand during the COVID-19 pandemic. Typically, an instant life plan with this coverage amount costs about the same as a $1 million term life insurance policy.
Instant life insurance should not be mistaken for guaranteed-issue policies, which are usually offered for seniors and can be more expensive. Simplified issue plans are also different in that they require you to answer a health questionnaire.
If you’re looking for a $1 million life insurance policy, one of the easiest ways to get it is by applying for an instant life insurance policy.
You can compare quotes from several insurers that offer this type of insurance, such as Ethos, Jenny Life, Haven Life or Ladder Life.
If you’re young and generally in good health, some insurers won’t require you to complete a medical exam. Instead, you may only have to answer some health-related questions. Although it isn’t a guarantee, you could potentially be approved for $1 million coverage in a matter of minutes.
Is a $1 Million Life Insurance Policy Right For You?
A $1 million life insurance policy may have higher premiums than policies with lower coverage levels, but it may be the best option based on your needs.
Ideally, your life insurance should be 10 to 12 times your annual salary. If you’re earning $30,000, a $300,000–$360,000 coverage amount may be more appropriate for you. However, even at this income level, a $1 million life insurance policy may be the right option if you have large debts such as a mortgage, student loans or business loans.
This coverage amount could also make sense if you are the sole breadwinner of your family, have several dependents who will one day attend college or you want to provide for a child with a permanent disability.
Life Insurance FAQs
Life insurance with $1 million in coverage may seem like a lot, but it makes sense for some people and may not be challenging to get. Here are answers to some of the most commonly asked questions to help you decide whether it’s the right policy amount for you.
About the Author
- J.D. Power. "Pandemic and Tax Code Change Spur Interest in Life Insurance, J.D. Power Finds." Accessed December 9, 2021.