There are many applicants that would balk at the idea of purchasing a $2.5 million dollar insurance policy for their loved ones, but there are a lot of households that need that much coverage. Having enough life insurance is one of the most important investments that you can make for your family. While not having life insurance is one of the worst mistakes that you can make.
Not only should you ensure that you have a life insurance plan, it’s important that you have enough insurance protection for your family. Not having enough life insurance is one of the worst mistakes that you could make. If you decide that you need a large plan that gives several million dollars, you might be worried about how much you’re going to pay every month for your plan.
This article is going to look at how much you’ll pay for your life insurance plan. We will also give you some ways that you can lower your insurance rates and keep more money in your pocket.
Do You Need a $2.5 Million Dollar Life Insurance Policy?
About half of all Americans that do have life insurance are drastically under-insured, which means that if they were to pass away, their family wouldn’t have enough resources to pay off all of the debt that they left behind.
Aside from having a policy, having enough coverage is the next most important decision. Before you automatically assume that $2.5 million is way too much for your family, you’ll need to do some important calculations first. You don’t want to be one of the millions of families that would leave their families with thousands of dollars of debt, and no way to get out of it.
The primary goal of your life insurance is to pay for any expenses that you would be left to your family after you passed away. This includes debt like your mortgage, car payments, student loans, business loans, and other final expenses like medical bills or funeral costs. With all of these unpaid expenses, it’s easy to see how your debt could quickly add up to $500,000 or $750,000 quickly, but that still isn’t anywhere near the $2.5 million dollars. Your debts are only a portion of your life insurance needs.
The secondary goal of your life insurance is to replace your salary. If you’re one of the main income-earners in your family, they would struggle financially if you were to pass away, but that’s where life insurance comes in. It will give them the resources they need to pay for necessary expenses that your paycheck typically covers. This is especially true if your family only has one income. In this case, your life insurance should be able to replace your salary for at least one year, but we suggest getting a policy that could replace your salary for seven to ten years.
For example, let’s say you’re the only income-earner in your household, and you make $90,000 a year. You would want to get a life insurance policy that could replace your paycheck for ten years, which means your life insurance policy needs to be at least $900,000. It’s easy to see why some families will need $2.5 million in life insurance coverage if anything tragic were to happen.
If you’ve done all your calculation and determine that you need $2.5 million in life insurance, you probably think that you won’t be able to afford that much coverage, but these plans are much more affordable than most applicants assume. Money shouldn’t prevent you from getting the coverage that your loved ones deserve.
How Much Does a $2.5 Million Policy Cost?
Several different factors are used to calculate how much you’ll pay for your insurance coverage. The company is going to look at your age, health, tobacco usage, any pre-existing conditions, the term length, and much more. Because there are several variables, each person could receive significantly different rates based on the situation, but we can give you generic quotes to give you an idea of how much you would pay for $2.5 million of coverage.
These are sample rates for a non-smoking man in the preferred rating:
Age is one of the biggest determining factors for what you’ll pay for your coverage, the younger that you are, the less you pay, which is why it’s important to apply as soon as possible for your coverage.As you can see, the younger that you are, the more affordable one of these policies are. In fact, for anyone that is 30 or younger, that are incredibly cheap for the amount of coverage you’re going to receive.
Requirements For a $2.5 Million Policy
There are some requirements that applicants have to meet to be accepted for large policies over $1 million that aren’t required for smaller plans. One of the first requirements is that your income has to be enough that it makes sense for the insurance company to insure you for $2.5 million. You can’t ensure yourself for drastically more than you’re worth alive. Each company has a different type of formula for their restrictions, but most of them only allow you to have around 35 times your income. The older that you get, the less life insurance that you’ll qualify for, because you have fewer working years ahead of you.
Also, they will also require a medical exam, like most insurance plans, but with the larger policies, they may also require a quick EKG to complete the exam before you can be accepted. Not only do you have to be in relatively good health to be accepted, but the results of the medical exam are also going to impact how much you pay for the insurance policy.
Because these policies are so large, the insurance company is going to be stricter with the underwriting and application process than they would with a larger policy. There is a chance that you’ll be declined for coverage because of your health. If that’s the case, you can find a company with more favorable underwriting or you can buy two insurance plans. Don’t let one rejection or high premiums keep you from getting the insurance protection that you and your family deserve.
Getting Lower Insurance Premiums For A $2.5 Million Plan
Regardless of how much life insurance your family needs, it’s important that you’re getting the lowest insurance premiums available. There are several ways that you can secure better rates from the insurance company. Making a few simple changes could help you save thousands on your life insurance plan.
One of the best ways that you can save money is by cutting out any tobacco that you use. If you’re a smoker, you’re going to pose a much great risk to the insurance company, and they are going to offset that risk by charging you more for life insurance. In fact, smokers are going to pay at least twice as much for life insurance versus what a non-smoker would pay for the same sized plan. If you want to keep more money in your pockets, it’s time that you cut your bad habits, like smoking.
On the other hand, if you’re a cigar smoker, but you only smoke on special occasions, it’s important that you find a company that is going to view your smoking more favorable. There are some companies that will allow you several cigars before they give you “smoker’s rates”. Most insurance companies will allow one cigar ever couple of months. Other insurance companies are going to give you smoker’s rates, regardless of how often you smoke. Finding the perfect company can save you thousands of dollars every year on your insurance protection.
The next thing that you should do to save money is improve your overall health. Before the company approves your application, they are going to require that you take a medical exam, and more than likely, it will include the EKG. The results of the medical exam are going to play a major role in how much you pay every month for your coverage. Improving your health is going to get your better medical exam results, which is going to translate into lower insurance premiums.
There are two main ways that you can do that, by getting regular exercise and sticking to a healthy and balanced diet. Both of these can help you lose weight, lower your blood pressure, lower your cholesterol, and reduce your risk of being diagnosed with health complications. All of these are going to translate into better monthly rates for your insurance coverage. In fact, a person that is in a healthy weight category is going to pay 50% less than a person that is overweight. Hitting the gym is going to save you hundreds of dollars every year for your life insurance.
$2.5 Million Insurance Coverage
If you think your family needs more insurance coverage to pay off debts, or you have business loans that will need to be paid for or any number of reasons that you need $2.5 million life insurance, it’s vital that you get the coverage that you deserve. If you have any questions about life insurance or the different options available, please contact us today toll free at 800-866-8780. We would be happy to answer those questions and connect you with the perfect policy for you and your loved ones. It’s our mission to ensure that you get quality coverage at an affordable rate by comparing quotes with several different companies.
You never know what’s going to happen tomorrow, don’t wait any longer to get the life insurance that you need. Tomorrow could be too late.
We know that nobody wants to think about his or her death, but it’s important that you plan for the inevitable. If you have any questions about getting life insurance or the different options available to you, please contact one of our agents today. We would be happy to answer those questions and connect you with the best plan to meet your needs. Life insurance is one of the most important investments that you’ll ever make for your family, let our agents help you make the best purchase possible.