How to Get Approved for a $5,000,000 Term Life Insurance Policy

by Jeff Rose on August 23, 2016 · 0 comments

When deciding upon life insurance coverage, especially when considering a five million dollar policy, it is important to shop around in order to find the insurer that fits both your needs as well as your budget.

Premiums for million dollar life insurance rates can range quite a bit from company to company, which is why it is crucial that you consider getting quotes from multiple life insurance companies. This is the number one way to save money if you need a large life insurance policy, regardless of the reason you need that high of a death benefit.

The most convenient way to do that is to complete our brief Compare Quote form on the right side of this page, and save you a lot of time trying to find the cheapest term life insurance rates.

5 million dollar life insurance policy

Sample Premium For A Five Million Dollar Policy

Many people ask us “how much is a million dollar life insurance policy?”  Before I give them the answer, I usually tell them to also look at higher death benefit levels, and not to just look at the cost of a 1 million dollar life insurance policy.

You will also have to decide whether to get quotes on permanent life insurance or term life insurance.  For our purposes, we will look primarily at term life insurance rates because typically these are much lower than the average cost of permanent life insurance.

Anyway, look no further! Below are a few examples of what you might expect to expect to pay for five million dollar life insurance rates.

If you are a forty-five year old male seeking a five million dollar policy you may receive various ranges of preferred plus ratings depending on the company you go with. For example three A+ rated companies vary from $205.32-714.27 depending on the year level.  All of these companies rate in our list of top ten life insurance companies, such as Banner Life Insurance Company.

A ten year level term policy would cost you around $205.32 whereas a fifteen year term policy increases to $305.37 and heightens to $427.17 when considering a twenty year term. Although this is just an example, it was used so that one can understand that life insurance rates do vary quite extensively in some cases.

SexAge$5,000,000 20 year Term
Male30$157.47/mo
Male40$253.17/mo
Male50$740.37/mo
Male60$2,103.75/mo
Male70$7,973.88/mo
SexAge$5,000,000 20 year Term
Female30$131.37/mo
Female40$214.02/mo
Female50$528.66/mo
Female60$1,440.91/mo
Female70$5,225.06/mo

All in all, it is important to realize that the range of costs depends primarily on a few things, such as the length of your term policy as well as the amount of money (death benefit) you are wishing to insure. Therefore, it is important to search around for all of the options when looking to apply for a multi-million dollar life insurance policy.

Higher Premiums = Stricter Tests

Anytime you cross a certain threshold for life insurance premiums, especially getting up into the millions of dollars range, your life insurance company is going to be a little stricter in checking your laboratory tests. This is called life insurance underwriting.

Certain carriers will allow you to apply for life insurance with no exam, but once you cross the 1 million dollar life insurance level, expect them to take a much closer look at various aspects of their underwriting, which we will discuss further.

Obviously it is appropriate for life insurance companies to do their due diligence for anyone wanting to buy life insurance in the millions.  They wouldn’t be financially prudent if they didn’t.

Life insurance companies understand if they get the reputation for “easy underwriting” then insurance agents and consumers will go to that company if they have serious medical conditions. This is called adverse selection and their underwriting results would deteriorate; then they might lose money and possibly not be able to have enough reserves to pay death benefit claims.

Life Insurance Applications and Your Medical History

When applying for high limits for life insurance amounts, your medical history will definitely come into play. You will be asked a lot of health questions either in person by your life insurance agent or over the phone if you apply for life insurance by telephone or on the internet.

Go ahead and prepare for this by gathering all your information about recent doctor or hospital visits such as dates of service, reasons for the visit, results of the service and whether that medical condition still exists and whether or not it is under control.  This would also include any prescription drugs you may be taking for that medical condition to include dosage amounts and frequency.

According to the Center for Disease Control, the following statistics from 2014 (last complete year available) indicate the leading causes of death from medically related conditions in the US:

  • Heart disease: 614,348
    • Cancer: 591,699
    • Chronic lower respiratory diseases: 147,101
    • Stroke (cerebrovascular diseases): 133,103
    • Alzheimer’s disease: 93,541
    Diabetes: 76,488
    • Influenza and pneumonia: 55,227
    • Nephritis, nephrotic syndrome, and nephrosis: 48,146

It makes sense that if you have one of these medical conditions that made this list, then you could expect to pay higher premiums for your life insurance policy. Since some of these diseases can be genetic, you will also need to have information about your parents and their health conditions, as well as information on the above diseases about your siblings.

Depending on your age and the death benefit levels you are applying for, life insurance companies will ask you to do various application requirements to allow them to perform their underwriting. All companies are different, and whether you are looking for life insurance at 50 years old, or life insurance for over 75 years old, may have different requirements for enrollment.

Since you are looking at a high death benefit amount, such as at least a million dollars of life insurance, then you will almost always have to either take a physical, or at least have a paramed examiner come to your home or office, and give you a “mini physical.”

This usually involves a nurse checking your blood pressure, your height and weight, asking you the usual health questions about you and your family, drawing blood and obtaining a urine specimen for lab work, as well as giving you a portable EKG exam.

If you are applying for a 5 million dollar life insurance policy, then you will most likely have to take a complete physical from a Medical Doctor as well as take a Stress Test EKG from a cardiologist.

Why Life Insurance Companies want to Know about Your Lifestyle

Your lifestyle choices will definitely be a part of the determination of premiums you will be offered by life insurance companies, or whether you will be offered a policy at all.

Some of these lifestyle choices are as follows that you will be asked about on your life insurance application:

  • Do you smoke cigarettes, cigars, or chew tobacco?
  • Do you exercise regularly or engage in physical activities such as tennis, biking, etc.
  • Do you frequently travel overseas to dangerous places in the world?

You probably already know that stopping smoking and starting to exercise will increase your health and lower the average cost of life insurance.

Just for your information, here are a few lifestyle tips that have been shown by various studies to increase your life expectancy.  They may not help reduce your term life insurance premiums, but they may help you live longer:

  • Floss your teeth regularly (helps reduce infections and inflammation in gums, resulting in less chance of infections in your arteries causing plaque buildup)
  • Eat more vegetables. Healthy vegetables prepared in a heart healthy way.
  • Move out of Alaska and/or get lots of outside time (Vitamin D has several healthy benefits)
  • Wear your seat belt: Not related to disease prevention, but it sure can help with staying alive in an auto accident

Will Your Occupation Prevent you from Getting a 5 Million Dollar Life Insurance Policy?

Maybe. Maybe not. Life insurance company actuaries (the accounting folks who actually determine what life insurance companies will charge for their policies) also have to include factors based on the occupations of their applicants.

One of the occupations that consumers don’t think about that is a high risk occupation is truck drivers and delivery drivers.  This is because transportation accidents are one of the highest on the job reasons for deaths according to the Bureau of Labor Statistics.

Other occupations that are hazardous and might even preclude someone from getting a million dollar life policy are commercial fishermen, loggers, roofers, farmers, powerline installers/repairmen, traveling circus workers, etc. Also, if you work underwater or over 3 stories, that can give life insurance companies a cause to rate up your life insurance offer.

If you are in one of these occupations, you might want to just give us a call so we can go to some of our companies that offer life insurance to consumers engaged in high risk occupations.

Which Hobbies affect Applying for Life Insurance?

OK, you just bought that new Harley.  You should have applied for life insurance first.  Yes, riding a motorcycle can cause you to have to pay higher life insurance rates because life insurance companies would rather see you in a car wearing seat belts.

So now before you sign up for jumping out of an airplane because it is on your bucket list, buy your million dollar life insurance policy now to get a good rate.

Here are a few more hobbies that will cause your life insurance rates to be surcharged:

  • Mountain Climbing, including rappelling.
  • Scuba Diving
  • Car racing
  • Paragliding
  • Cave exploring (spelunking)

Why Would You Even Want to Get a Million Dollar Life Insurance Policy?

Many times people buy life insurance to help pay for funeral expenses or provide college education for younger children.  If you are looking at a multimillion dollar life insurance policy, it is probably not for either of those reasons.

Most applications for these large death benefits are to use for a business or personal will.  This could be to fund business buy sell arrangements or key man life insurance policies for a business, or to provide for estate taxes for an individual.

Sometimes both individuals and corporations will need a large policy to pay off debt in the event of an untimely death, or to provide for a generous donation to a charity to leave a lasting legacy in the name of an individual or corporation.

Get a Second Opinion (if you don’t like what you hear)

If the initial rate comes back much higher than expected, make sure you seek out rates from all the best life insurance companies.  It should be noted, that as an independent insurance agency, we already do this for you.  In one case, we had a client that was a real estate developer and was seeking $7 million of life insurance coverage.  We decided to split the policy up between two carriers to diversify the risk for the two life insurance companies.

After the medical exam, one carrier rated him Preferred, while the other one rated him Standard Table 1.  It was a $2,000 difference for both companies which left both myself and the client puzzled.  We tried working with the company but their underwriter saw something different than the others so they didn’t budge.  The end result was us shopping the policy with a 3rd insurance company that matched the least expensive option saving the client money while also keeping his large policy diversified.

What steps can I take to find the best rate?

You can next use our instant Compare Quote engine provided in the right column in order to compare and contrast the various rates for life insurance from different companies. This is an excellent tool for those who are beginning to shop around for a million dollar life insurance policy.

We hope this will have fully answered your question of how much is a million dollar life insurance policy.

If you have any further questions regarding life insurance, feel free to contact us via telephone with any of your concerns as we are always happy to address your specific needs.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: