Compare $100,000 life insurance policies

A $100,000 life insurance policy is popular among those who have healthy savings and retirement accounts and want to use life insurance to supplement that. When you die, your policy kicks in to help your family maintain the lifestyle they’ve grown accustomed to. It’s also common for business owners taking out key employee insurance and those who are hoping to secure a loan.

How much does a $100,000 life insurance policy cost?

The premium you’re offered will come down to a range of factors, including your age, health, lifestyle and occupation. However, a $100,000 policy has a relatively low face value, so you could secure coverage for 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.

*Sample rates averaged from five major insurers in the US: Protective, Prudential, MassMutual and Mutual of Omaha. They’re valid as of January 2021.

Is a $100,000 life insurance policy right for me?

To figure out if $100,000 is the right amount of coverage for you, think about your income, financial obligations and why you’re getting life insurance. This type of policy might be right for you if:

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• You make less than $20,000 a year. A general rule of thumb about how much life insurance you need is 5 to 10 times your annual salary. If you have a low income or are still climbing the career ladder, a $100,000 policy might be appropriate.
• You can’t afford more coverage. Though a $100,000 policy is on the cheaper side for premiums, it’s still a monthly expense that you should be able to comfortably pay.
• $100,000 will cover big expenses after you die. Consider your reasons for taking out a policy. Is it to cover your funeral costs? Pay off remaining mortgage or loan debt? If you’ve done the math and realize that your financial responsibilities add up to over $100,000, you may want to look at higher coverage.
• Your family could afford to replace your income. $100,000 may not leave your family with a lot of money to replace your income; $100,000 is only 2 years’ salary for the average American. If your spouse makes good money or you’re retired, you might not need more than $100,000 in coverage.
• You have other savings or assets. Typically, those who sign up for $100,000 of coverage have healthy savings accounts, no dependents, little debt and few liabilities. It’s a popular life insurance option for seniors who’ve paid off their debt and have assets or money stashed in savings or retirement accounts. Their children are grown and well established in their own careers, and simply want life insurance to cover end-of-life expenses so their families aren’t saddled with that financial burden. They may also want to leave a small inheritance for their grandkids.
• You’re looking for a keyman policy for your company’s executives. It’s also common for business owners to take out $100,000 of life insurance coverage for key employees or partners. That way, if those valuable people die, the company won’t be strapped for cash while it finds replacements.

Can I get a $100,000 life insurance policy?

Most major insurers offer $100,000 life insurance policies — including Prudential, Guardian and MassMutual. Unless you choose a no-exam policy, you’ll need to go through the underwriting process to find out if you’re eligible for coverage.

To determine this, insurers will look at a range of factors including your age, health, family medical history and income. Young, healthy applicants receive the best rate because their life expectancy is higher — and there’s less chance the insurer will have to pay out your death benefit. Your insurer will also assess your income. The reason is simple: you’ll need to be able to afford to pay your premiums, and for a $100,000 policy, the requirements aren’t too steep. In most cases, you’ll just need to prove that you’re earning $10,000 a year or more.

Can I get $100,000 coverage without a medical exam?

Yes. You can opt for a simplified issue policy, which waives the medical exam and only requires you to fill out a health questionnaire. 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, you most likely won’t be able to get $100,000 in coverage. Most insurers cap their coverage between $2,000 and $25,000.

Bottom line

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.

Frequently asked questions

• Who should I choose as my beneficiary?

  Think about the person or company you’d like to receive your policy’s benefits if you pass away. Most people choose a person as their beneficiary, such as a spouse, sibling or child, but you can also assign an entity, like a charity or alma mater.

• Should I get life insurance for my business?

  If you’re an owner or partner in a business, it’s worth looking into life insurance. If you die during the term, your policy would kick in to offer the company cash flow and a sense of financial security. You may also want to explore key person insurance, which is when business owners and partners purchase a life insurance policy for a valuable employee. Should they die, the company will have cash to tide them over until they find a replacement.

• I already have health insurance. Do I need life insurance, too?

  While health insurance helps to cover your medical expenses if you get sick, it doesn’t pay for the debts, bills and loss of income if you can’t work as a result. That’s where life insurance can step in. Life insurance also offers your family financial support when you die, whereas your health insurance policy dies with you.