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Compare $5 million life insurance policies
High-dollar coverage may not be as expensive as you think, but only if you’re in good health.
A $5 million life insurance policy may seem unnecessary, but as your salary and financial obligations grow, you may find this is the level of protection you need. If you’re leaving behind a taxable estate or a business, this coverage can help your family pay taxes and keep your business afloat after you die. And premiums for a policy this large can be pretty affordable, especially if you’re young and healthy.
What's in this guide?
How much does a $5 million life insurance policy cost?
Your premium depends on personal factors, such as your age, health and habits. If you’re healthy and don’t smoke, you can get a 20-year term policy for $131 a month for a 30-year-old man or $99 a month as a woman. But smokers pay a serious premium for the same level, with a man paying $621 a month and a woman paying $485.
* Based on sample rates from Policygenius, August 2020
Is a $5 million life insurance policy right for me?
How much coverage you need depends on your family’s lifestyle, future financial needs and how much your family depends on your financial contribution. Estate planners recommend buying coverage at five to 10 times your annual salary, but here are additional expenses to factor in:
- Mortgage. Consider the monthly expense of your home, how much you owe and how long it might take your family to pay off your mortgage. If you’re seeing high numbers, consider a policy to match.
- Tuition. Whether your kids are in private schools or planning for college education, factoring in tuition expenses can ensure your children get the education you want for them, even after you’re gone.
- Long-term care. If you’re responsible for elderly or ill family members, life insurance can go a long way to help cover their medical care and future expenses in your absence.
- End-of-life expenses. Funeral costs and hospital stays can eat into the money your family needs to get by. Planning to cover these costs with your life insurance money can ensure your family can stay afloat.
- Business costs. Consider whether your business is one you want to keep in the family, or if you simply need to help cover expenses until the business can be sold.
- Estate taxes. If you have an estate worth over $11.58 million, the 2020 estate tax threshold, your life insurance can help pay the taxes to keep your family from having to sell off assets to foot the bill.
Can I get a $5 million coverage policy?
How much coverage you’re eligible for depends on two main factors: your age and your annual income. Because coverage is based in part on your earning potential and present and future financial obligations, starting your policy younger increases your eligibility for a higher coverage level.
Your current income is also a factor in eligibility. Insurers typically offer between 10 and 20 times your current annual income, which means you may need to make close to $250,000 to $500,000 a year to be approved for a $5 million policy. Where you work also matters, since some insurers see working for a corporation as more stable than being self-employed.
Can I get this much coverage without a medical exam?
No. A $5 million policy usually requires a medical questionnaire and a 20- to 30-minute medical exam that you can schedule at your leisure. You may even be able to request smaller, temporary life insurance coverage while you wait for the results of your exam.
Policies that don’t require medical underwriting, such as simplified issue and guaranteed issue life insurance, usually cap at around $250,000 of coverage.
Compare life insurance companies with high coverage amounts
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