Narrow down life insurance companies by coverage levels, riders offered, medical exam requirements and more to get a quote for a $100,000 life insurance policy.
A $100,000 life insurance policy makes sense for people who already have healthy savings or retirement accounts or people who need a low-cost way to provide some support to their family after they die. When you die, your policy can kick in to help your family replace your salary for a period of time, cover medical or funeral costs or pay down any debts you owe. However, you’ll likely need to pass a medical exam to get this amount of coverage, since most policies without medical exams cap coverage much lower.
How much a $100,000 life insurance policy costs
A $100,000 term life policy could cost you as little as $10.28 a month for a healthy woman in her 20s, and $11.86 for a healthy man of the same age. For many insurers, this is the minimum amount of coverage you can buy, making it your cheapest option. However, how much you pay comes down to your age, health, lifestyle and occupation.
*Sample rates averaged from five major insurers in the US: Protective, Prudential, MassMutual and Mutual of Omaha. They’re valid as of January 2021.
When a $100,000 policy makes sense
If you need coverage at a cheaper price or you’re using life insurance as a supplement to savings or other life insurance policies, you may only need a policy worth $100,000. Tally up your income, any savings and financial obligations to determine if this coverage amount meets your needs, but it may be enough for people that:
- Make less than $20,000 a year. The general rule of thumb for how much coverage you need is 5 to 10 times your annual salary. If you make under $20,000 annually or are still climbing the career ladder, a $100,000 policy might be enough to help your family stay afloat if you die.
- Can’t afford more coverage. If your budget doesn’t allow for a higher coverage policy, getting a $100,00 policy is a lower-cost way to ensure your family has some financial cushion to help with bills, medical costs or funeral costs after you die.
- Only want to cover specific expenses. If you’re buying coverage to pay for a specific debt, like your mortgage, or your funeral costs, this amount of coverage may be enough. Just do the math to make sure this amount covers the debt you’re aiming to help your family pay off.
- Want to ladder policies. If you already have a life insurance policy and want to increase your coverage level or the amount of time your coverage lasts, adding a $100,000 term policy to your insurance assets may meet your needs.
- Have savings or assets. If you have healthy savings, no dependents, little debt and few liabilities — this amount of coverage can supplement the costs for end-of-life expenses or provide an inheritance to loved ones.
- Have working or retired spouses. If your spouse makes good money or you’re retired, you might not need more than $100,000 in coverage to help cover your family’s living expenses after you die.
- You want keyman insurance. A $100,000 keyman insurance policy may be enough to offer your company cash flow and financial security while searching for a replacement if an important employee or partner dies prematurely.
$100,000 policies require a medical exam, but you have options
If you want $100,000 in coverage you’ll likely have to pass a medical exam or complete a medical questionnaire in order to receive coverage. A medical exam includes questions about your medical history and a physical exam. These results help your insurer assess your level of risk and are a factor in determining how much you’ll pay for coverage.
If you don’t want to take a medical exam, you can opt for a simplified issue policy, which waives the medical exam and only requires you to fill out a health questionnaire of about 20 yes or no questions. These policies are ideal for people who have been denied coverage due to pre-existing conditions, and for those who need coverage fast — say, to secure a business loan or fulfill a court order. However, they’re expensive, so you may be better off with a traditionally underwritten policy in some cases.
If you’re looking for a guaranteed issue policy, which skips both the medical exam and a health questionnaire, you likely won’t be able to get $100,000 in coverage. Most insurer’s cap guaranteed coverage between $2,000 and $25,000.
How to qualify for a $100,000 policy
To be approved for coverage you’ll only need to prove you have an annual salary over $10,000 and pass a medical exam. And you won’t have a hard time finding a policy, most top insurers offer a $100,000 policy.
Once you’ve decided you need life insurance, the next step is working out how much coverage to buy. Think about your financial obligations now and in the future, and why you’re buying your policy. If you’re simply purchasing life insurance to boost your business or help your family tie up loose ends, or your financial responsibilities come to $100,000, you may be the right candidate.
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