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Do I Need A Million-Dollar Life Insurance Policy?

Who couldn’t do with a million dollars, right? You might dream of making that much money, or of leaving that amount to your family so they won’t have to worry about money after you’re gone – and if you’re shopping for life insurance policies, you’ll find that million-dollar policies exist so that you can provide that to them. But is a policy that big right for you and your situation? Before considering a million-dollar life insurance policy, you’ll need to consider your needs and your eligibility.

Who Should Get A Million-Dollar Life Insurance Policy?

Million-dollar life insurance policies are just what they sound like – policies that promise a $1,000,000 death benefit to your family members in the event of your passing. As long as you pay your monthly premiums and do not let your policy lapse, or lie during the application process, your family is guaranteed a million dollars when you pass.

In general, your life insurance policy should cover 5-10 times your salary, so if you earn about $100,000 a year, then a million-dollar policy might be the right choice for you. However, a million-dollar life insurance can also work for you if you earn less and want to cover:

Large debts, such as a mortgage and student loans
Child care and dependent expenses
Funeral expenses
Your children’s education

You will need to factor in all of the above and estimate your future expenses to see how much coverage your family will need further down the line.

How Much Does A Million-Dollar Life Insurance Policy Cost?

Life insurance premium rates are always dependent on a number of factors, including your age, health history, smoking habits, and more, but you might be surprised to know that even million-dollar policies can be very affordable. If you are young and healthy, a policy can cost you as little as $35 a month, or a little over $1 a day.

Another factor that will help determine the price of your premiums is the type of policy that you choose, whether it be term, whole life, or universal life insurance. Term life insurance will be the least expensive choice of the 3 types because there is no cash value included with the policy. The benefits of term life insurance include:

Lower premiums
Guaranteed death benefit (as long as premiums are paid)
Choice of 10, 15, 20, 25, and 30-year policy term
Premium prices are locked in for the entire policy term
Renewable at the end of the initial term

But if you choose to go with a whole life or universal life insurance policy, you will have cash value that builds over time, which you will have access to at any time.

What Are The Eligibility Requirements for a Million-Dollar Policy?

If you are considering a million-dollar life insurance policy, be prepared to give some information to the life insurance company you have chosen; they will want to assess your risk to determine if you will qualify for that large of a policy. Not only will you have to pass medical underwriting, but the company will also look at:

Your age– Most insurance companies will issue a million-dollar policy that is 40 times your annual income for applicants under 40, 25 times for people ages 40-60, and 10 times for people ages 60-70.
Your income– Most insurers, though, will offer benefits that are anywhere between 10 and 30 times your annual salary, with some variation based on your age.
Your health– Any current and past health conditions will be considered.

Looking For A Life Insurance Policy?

If you are looking for a million-dollar life insurance policy to help protect your family’s financial future, you might find that you are eligible for one, and that it is more affordable than you thought it would be. But if you do find that a million-dollar policy is not the right fit for you, don’t worry: you can find another affordable plan with great coverage with the help of a life insurance agent.

There are many different life insurance companies with different coverage options and prices, which is why it is important to compare all of your options, and the best way to do this is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

What Type of Life Insurance Annuity Is Right for Your Family?

Did you know that when it comes to life insurance benefits, beneficiaries of a policy have options for how they get their money paid out? You can choose to have benefits paid out in one lump sum, but if you’d prefer to receive your money over a longer period of time, an annuity might be the best option. Annuities are long-term investments that allow your money to grow over time, so that you will get guaranteed income for life; if you decide to go with this option, you should know that there are different annuities to choose from.

How Life Insurance Annuities Work

bag of money in black with a white money symbol in the middle — *Beneficiaries can choose one lump sum, or an annuity on life insurance payments.*

When a life insurance policy holder passes away, the beneficiary to the policy will generally receive their payout in one lump sum, but they also have the option to receive it as a life insurance annuity. Not to be confused with a life annuity, which is a standalone investment to supplement your retirement income, a life insurance annuity is only for beneficiaries of a life insurance policy; if you or your beneficiary chooses to receive benefits over an agreed-upon number of years, your life insurance company will convert the payout into an annuity, in a process called annuitization. The good thing about choosing an annuity is that the money that remains in the annuity will earn a fixed rate of interest determined by the insurer.

Types of Life Insurance Annuities

If you or your beneficiary chooses to invest your death benefit in a life insurance annuity, you will have various options, including:

Fixed-period annuity– Your money will be paid out over a period of 10, 15, or 20 years, and will grow tax-deferred at a fixed interest rate. If the beneficiary dies during this time, his or her beneficiary will receive the remaining payments until the fixed number of years expires.
Variable annuity– This kind of annuity can be a little risky, because it involves investing in the stock market, meaning the amount of money paid out will be determined by how well the investment is doing.
Lifetime annuity– Also known as life income annuity, with this type of annuity, the beneficiary will receive a percentage of the death benefit plus interest every year until they die.
Lifetime annuity with period certain– With this annuity, your insurance company pays out income for the beneficiary’s entire life or the period certain, whichever is longer. If the beneficiary dies within the time, a designated beneficiary will receive the remaining payments for the remainder of the period.

Younger beneficiaries will benefit most from lifetime annuities since there is a longer payout period, meaning there is a longer time for interest to grow. Older beneficiaries might prefer a fixed-period annuity so they do not risk passing away before receiving the full amount.

Tax & Interest On Annuity Payments

If you take a death benefit as one lump sum, you will not need to pay taxes on it, but if you or your beneficiary chooses an annuity payment, part of the income will be taxed. This is because the money that is left with the insurance company will earn interest each year, and that interest is taxable.

When it comes to life insurance payouts, you have options, and it’s important to go over these options so you can decide when the time comes. And if you’re still shopping around for a life insurance policy, remember that there are multiple policies to choose from, so make sure you compare different policies from multiple life insurance companies, since all of them have different ratings, coverage options, and pricing. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Life Insurance Planning For Different Stages Of Life

When it comes to life insurance, your needs will vary throughout your lifetime. That means, in order to be adequately covered by your life insurance policy, you will have to consider what coverage you will need at different stages of your life, and plan accordingly. So what should your life insurance coverage look like at each stage of your life?

Ages 20-30

This time in your life is full of possibilities, but also full of uncertainty and new financial obligations. You might be single, but in a relationship and looking toward getting married, and you might be either still renting or getting ready to purchase a house, all while juggling student loans, auto loans, and more. All of these financial obligations mean that you will want to get a life insurance policy now whatever your relationship status, especially if you have a co-signer on any of your loans. Not only that, but now is a good time to purchase a life insurance policy because at a younger age, life insurance is relatively inexpensive, so you will be able to get a larger amount of coverage with lower monthly premiums.

Ages 31-50

Whether you are still single or are married, life insurance is important during this stage in your life. You might be considering growing your family, which is not cheap, as well as trying to pay down any large debts that you have, including your mortgage. At this stage in your life, your salary is probably higher than it was in your twenties, which means your family will now be relying on a larger income, making it harder for them to go without it in the event of your passing. When assessing your life insurance needs at this stage of your life you will have to consider:

Any raise in income
The balance of your mortgage
Cost to maintain your family’s lifestyle
You children’s expenses, such as college tuition
Medical bills or any final expenses

Ages 51-60

During this stage of your life, you might be an empty nester and living in a quiet home that is almost paid off. Your life insurance coverage needs might not be as much as in previous years, but having a policy is just as important to help your family and partner. A policy can help cover: scale with a blue house on one side and a red percentage sign on the other

Any remaining mortgage balance or debts
Ongoing care for special needs
Final expenses
Creating a legacy
Healthcare and long-term care costs

Ages 61 & Over

Retirement is not too far off during this stage of your life, and you will want to be able to protect your retirement and your legacy with life insurance. Sure, you may not need as much coverage at this stage because you might not have the same financial obligations that you had when you were younger, but you should come up with a financial plan for the rest of your life – and life insurance can be a very helpful part of that plan. Life insurance coverage should be considered for:

Long-term care for yourself or your spouse
Estate planning
Any debts you may have left
Final expense costs

Whether you are young or old, it is important to consider life insurance in order to protect your loved ones and your assets – and it doesn’t matter if you are in your 20s or 50s, there are many great affordable life insurance policies to choose from that will provide enough money for your family. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Should I Get Life Insurance Or Just Use My Savings?

Having cash set aside for a rainy day is always a good idea: a savings account will give you a cushion of protection in the event of an emergency, and will help you in planning for your retirement. You might even think it will be enough for your family to live on in the event of your passing, but will you really be able to save enough to ensure their financial stability when you are gone? If you are deciding between buying a life insurance policy or relying on your savings account for your family’s future financial needs, there are a few things you should consider.

The Purpose Of Life Insurance

Life insurance will help give your family financial security in the event of your passing; the great thing about it is that you can choose the amount of coverage you want for your family (or any beneficiary of your choosing), and as long as you make your premium payments, they will receive a lump sum payout, or death benefit, which they can use to pay for your final expenses, or any other expenses that are paid for by your income.

Two of the most popular life insurance policies include:

Term Life– This is the most affordable and flexible type of life insurance coverage. The policy lasts for a specific amount of time, usually anywhere from 5-30 years, and is best for those who want to cover expenses that last a certain amount of years, such as a 30-year mortgage.
Permanent Life– This type of policy offers lifelong protection, and so typically costs more than term life insurance policies. It also builds up cash value over time, which you can borrow from, like a savings account; the money you borrow will be deducted from your death benefit, unless you pay it back into your policy.

Pros of Life Insurance

Life insurance offers multiple benefits, including:

In most cases, your death benefit will be a tax-free payout.
Your family receives the lump sum death benefit payout quickly after your passing, unlike with a savings account – with a savings account, your family will have to wait until your estate is settled to gain access to your account.
You pay a low monthly fee to receive a large payout- a term life insurance policy can cost as little as $15 a month for a death benefit of $250,000.

Pros Of A Savings Account

You can earn interest on your money
You have instant access to your money while alive

Why Choose A Life Insurance Policy?

brown casket — *Funeral costs alone can be too much for your family, and your savings might not be enough.*

Everyone should have a savings account for all of those rainy day expenses, or for retirement planning, but when it comes to your family’s needs when you are gone, just having money in the bank might not be enough to financially sustain them. In fact, did you know that the median savings account balance across American households is less than $5,000, and that, according to a recent study conducted by the Federal Reserve, 40% of adults wouldn’t be able to cover an unexpected $400 expense? Considering that the typical funeral alone costs around $10,000, one of the main reasons to invest in a life insurance policy is the fact that it can be nearly impossible to save up the thousands of dollars necessary to help your family when you are gone. For a few extra dollars a month, you can give your family guaranteed financial security when you are gone with a life insurance policy that will cover the loss of your income, their monthly and annual expenses, and any future expenses like college tuition.

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable options to choose from that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Does Life Insurance Pay in Cases of Suicide?

Sadly, suicide is all too common: in fact, it’s the 10th leading cause of death overall in the United States. Many people think that if someone commits suicide, not only will their family be experiencing unimaginable grief, but their family will also be unable to access their life insurance benefits, because it’s a common misconception that suicide is not covered under life insurance. But that is not necessarily the case: when it comes to suicides, the reason life insurance companies have a “suicide clause,” or an exemption for death by suicide, is to prevent people from buying policies immediately before taking their lives so that their families can receive financial benefits – but that doesn’t mean that suicide is never covered by life insurance.

When Does Life Insurance Cover Suicide?

bar graph with red bars going upwards — *Suicide rates have steadily increased over the years, which is why life insurance companies have a suicide clause.*

Suicide rates increased around 1% every year in the U.S from 2000-2006, and have increased 2% each year after 2006; because of this, life insurance companies have actually changed their policies: while at one point, they never paid out benefits in cases of suicide, most are now better prepared to help family members if it does happen. Life insurance policies now cover suicidal death, as long as it occurs within certain periods:

Life Insurance Suicide Clause

This clause is a provision put into most life insurance policies that outlines the specifics of your coverage if you were to commit suicide. Generally the clause is a 2-3 year exclusion period, which means once you have had the policy for 2-3 years, depending on the insurance company, your family will receive your death benefits even if you commit suicide. On the other hand, if you were to take your own life during that 2-3 year period, the insurance company would have the ability to investigate your death and deny coverage, meaning your beneficiaries would only get a refund on premiums paid towards the policy, not the death benefit. This is meant to prevent any applicant from taking out a life insurance policy and then taking their life immediately after.

Contestability Period

In addition to the suicide clause, all life insurance policies have a contestability period, which is also generally the first 2-3 years of the policy. During this period, the insurance company has the ability to contest or deny a claim for a number of reasons, including if they believe you lied on your application, committed an illegal act that led to your death, or that you committed suicide.

Does Life Insurance Cover Physician-Assisted Suicide?

As long as your policy’s contestability and suicide clauses have expired, your life insurance policy might cover physician-assisted suicide, which is generally defined as someone dealing with a terminal illness giving permission to their doctor to administer lethal doses of medication to end their life. There are currently 11 states, and Washington D.C., that have laws protecting the right to assisted suicide:

California
Colorado
Hawaii
Maine
Montana
New Jersey
New Mexico
Oregon
Vermont
Washington

Make sure to check with your life insurance company if you have any questions about coverage, and always be honest when filling out your application. If you have a terminal illness, most companies will deny coverage, but some might still allow you to purchase a policy; however, if you lie about your medical condition, that is grounds for the insurance company to claim fraud, which would leave your family with nothing.

Payouts For Suicide

Before you can purchase a life insurance policy, the insurer will conduct an analysis of your physical and mental health. If you are living with depression, you will most likely be able to get a policy as long as you are getting treatment and taking your medication, but the rates and coverage you will be offered will be determined on a case-by-case basis. In addition, if you do not disclose any mental health conditions when you first apply for your policy, your insurance company could deny payouts in the event of a suicidal death.

If you are in crisis, call the toll-free National Suicide Prevention Lifeline at 1-800-273-TALK (8255) – this service is available to anyone, 24 hours a day, 7 days a week. All calls are confidential.

If you are looking for a life insurance policy, the best way to find the right one for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

What is Life Insurance Laddering?

Life insurance policies are not only incredibly useful, because they provide your family with the money they need after you are gone, but they are also more flexible than you might realize. You have the option to build a life insurance plan that works for you, commonly known as an insurance ladder, or life insurance laddering. This can help you save money while ensuring that you have the right amount of coverage at every stage of your life, so your family is financially protected for a great price.

How Life Insurance Laddering Works

illustration of a person holding a ladder walking to a dollar sign being held up high — *Life insurance laddering allows you to have multiple policies for your different needs so you can save more money.*

At the most basic level, life insurance laddering provides you the option to buy multiple life insurance policies with different coverage amounts and durations. For example, you might want multiple term life insurance policies that will expire at different times; laddering your policies will provide you with protection for different needs, such as a 20-year term life insurance policy for a mortgage and a 10-year policy for your children’s college tuition, or student debt. Each policy will serve a different purpose in your life, and will prevent you from spending extra money for coverage.

Life insurance laddering is also a great way to make sure you’re not overspending on life insurance as you get older and pay down your bills, since your financial obligations will probably decrease over time, and you will need less coverage for expenses after you pass. Laddering policies will allow you to pay for the coverage you actually need and not the coverage you needed 10-30 years ago: for example, if you want a $1 million life insurance policy that would give you more coverage at certain periods in your life, you could ladder policies to achieve this with a:

10-year policy of $500,000
20-year policy of $300,000
30-year policy of $200,000

This way, you ‘ll get the most coverage when you’re younger and have more expenses, and will have less coverage – and lower premiums – as you get older and have fewer financial obligations.

Downsides of Laddering

Laddering is not for everyone, especially because you have to do some shopping and comparing to find multiple policies that fit your needs. One of the main downsides of life insurance laddering is it can be difficult to understand and manage the different policies; not only that, but your future needs are not defined yet, so choosing the right policies can be tough. To better understand if this strategy will work for you and help you save money, work with a licensed agent who can compare plans from different companies for you.

Can You Benefit From Life Insurance Laddering?

If you want access to different levels of benefits and want to reduce the price of your life insurance premiums, laddering policies could be right for you. Before considering laddering policies, though, speak to an agent, who can help you get a better understanding of what your future expenses and needs for your family might look like. You will also need to have an understanding of how much coverage you will need at different points in your life. Laddering will work for you if:

You have large, but temporary, obligations
You have pre-existing conditions that could increase the cost of your insurance down the road

As we said, life insurance laddering is not for everyone, but it can be helpful for families who want to save money on insurance premiums, or for those who know what their future financial needs will be. But doing the work to calculate all of your future expenses, on top of researching each type of policy, can seem like a lot, so your best bet is to use online tools and work with an agent who can help you compare different policies from different insurance companies. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

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