A 2 Million Dollar Life Insurance Policy

Written by Scott W Johnson

Are you crazy for wanting to buy a $2 Million Dollar Life Insurance Policy?

This often not discussed coverage amount has been neglected for too long.

What is the Same - What is Different.

  • check
    Speak with a Specialist
  • check
    Consider Affordability
  • check
    Carefully Consider Coverage
$2,000,000 life insurance

Who Needs a $2 Million Dollar Life Insurance Policy?

A two million dollar life insurance might seem like an insane amount of insurance, but the truth is, its not really.  Especially to people that live in more affluent areas, such as the New York Metro area, Los Angeles, the San Francisco Bay Area, Miami, Chicago, Etc. 

But the candidates for two million dollars of life insurance is not at all limited to these areas. 

buying a $2MM life policy requires more work

If you are following the old 'ten times earning rule', than anyone making $200,000 per year, might need a $2,000,000 level term life insurance policy.   Anyone that has a mortgage of $2 million plus dollars may also be inclined to need a life insurance policy for this amount.  There are all sorts of various life insurance calculators that you can use to assist in coming up with this calculation.

What is the Ten Times Earning Rule?

The ten times earning rule simple says that you should multiply ten.

For Example:

$50,000 per year times ten would equal $500,000 in needed coverage.

10 X $50K = $500K

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The ten times life insurance rule is admittedly a crude tool for deciding how much life insurance to buy.

Why Buying a $2 Million Dollar Life Insurance Policy is Different:​

When shopping for this much in insurance, often the internet may not be the best place to look. 

But solely relying on information online may lead you astray.   The higher the dollar figures  the more complex underwriting may become.

Although helpful for lower amounts of coverage, there are several reasons why shopping for a $2 Million Term policy is extremely different:

$2,000,000 life insurance policy may require a better insurance agent
  • Not all Life Insurance Carriers Offer Policies up to $2MM
  • Not all Life Insurance Carriers Offer $2MM policies beyond certain older ages, such as 76 years old. 
  • Most Insurance Carriers will have more aggressive underwriting
  • With higher benefit amounts it is imperative that pre-screening be done for your health, lifestyle, and job in order to assist you in getting the best price.
  • Increased need to consider affordability.
  • The Whole Vs Term Life and Invest the Rest Calculation

A two million dollar life insurance might seem like an insane amount of insurance, but the truth is, its not really.

Click to Tweet

How to Calculate How Much the cost of a $2 Million Dollar Life Insurance is:​

Buying higher dollar life insurance​ amounts as we have stated is not nearly as simple as lower dollar amounts.   Therefore its often not possible to get a simple estimate by looking online.   Therefore here are some general life insurance quotes, all at the $2,000,000 amount, all term life policies.

10 Year Term Life Insurance, $2,000,000 Death Benefit, California

Male, Aged 40, Non Smoker Preferred Plus, No Health Issues

Prices Ranging from $605 to $955 per year

20 Year Term Life Insurance, $2,000,000 Death Benefit, California

Female, Aged 40, Non Smoker Preferred Plus, No Health Issues

Prices Ranging from $955 to $1,289 per year

25 Year Term Life Insurance, $2,000,000 Death Benefit, California

Female, Aged 40, Standard Non Smoker, Some Health Issues

Prices Ranging from $2,964 to $3,211 per year

25 Year Term Life Insurance, $2,000,000 Death Benefit, California

Male, Aged 40, Standard Non Smoker, Some Health Issues

Prices Ranging from $3,744 to $4,136 per year

Great Candidates for $2,000,000 in Life Insurance:

The working Dad living in Washington DC, that has three kids and earns $220,000 per year on average.  His wife does not work and depends on him for all their income.

The working widowed Mom living in Chicago, who makes $250,000 per year and has two children.  Since her husband passed away over five years ago, she is financially all by herself

Both working parents who live in Connecticut.  She earns over $400,000 per year and he $300,000 per year.  They have three children from different marriages and their overall financial situation is extremely complicated.

The Single woman that lives in Los Angeles with no children.  She is a semi famous actress whose income fluctuates tremendously from year to year.   Some years on the low side of $400,000 and other yeas she makes in excess of $650,000.  Her home is valued at $4,200,000 and carries a $2,300,000 mortgage on it.  Since her brother also lives with her in a sub unit, she wants the house to be paid off in the event of her death.  She does not have enough money saved off to do this without insurance.


How to Buy a $2 Million Dollar Life Insurance Policy:

Buying a policy this large is complicated and it is usually best that you follow a couple of best practices:

  • Only work with experienced life insurance agent.
  • Stay away from a Captive Insurance agent and instead work with an Independent Agent that can offer you quotes from lots of different insurance companies.
  • Before you start the process, compute what you can afford to pay per year.
  • Complete a full pre health screening.  Ask about how your job and all of your hobbies can change your life insurance rates.
  • Review with your insurance agent all of the potential carriers.  Check the Financial Strength Rating of each and every one.
  • Make sure that you are giving 100% completely accurate answers to your insurance agent.
  • Make yourself available for the paramedical exam as soon as possible.
  • Do not buy any form of life insurance that you do not understand.
  • Don't sign anything that you do not understand.
Best Practices for $2MM insurance policy
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In this short article about buying multi million dollar life insurance policies, mostly we have avoided the debate about what type of life insurance to buy: Whole, Universal, or Term Life.  Frequent readers of my site will certainly know that I believe that Whole Life Insurance for certain five or six reasons, but in general I find that it will not make mathematical sense.   

Since this article is about people needing two million in life insurance it may be a situation when the client is considered to be affluent.  Affluent clients can theoretically decide to purchase a whole life insurance policy and come out ahead.   However, although this so called sales pitch is attempted often, it too is fraught with ruined financial balance sheets.  I would advise most of my clients to be extremely careful purchase a whole life insurance policy, even from an A++ rated company for any purposes other than pure insurance.

Why Clients Should Consider a $2 Million Dollar Life Insurance Policy:

Happy feeling after buying $2,000,000 term life policy

There are numerous reasons for people to consider buying a large life insurance policy such as a two million dollar policy.   The most popular reason is typically to assist in financially supporting loved ones, such as Wives and Children. Sometimes the necessary coverage can be used to pay off a loan on a home.  In the end a $2,000,000 life insurance policy will likely assist in putting your mind at ease.

Thanks for reading our article about a $2,000,000 life insurance policy.

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Marindependent Insurance Services LLC
Marindependent Insurance Services LLC

Are you crazy for wanting to buy a $2 Million Dollar Life Insurance Policy?

This often not discussed coverage amount has been neglected for too long.

What is the Same - What is Different.

  • check
    Speak with a Specialist
  • check
    Consider Affordability
  • check
    Carefully Consider Coverage
$2,000,000 life insurance

Who Needs a $2 Million Dollar Life Insurance Policy?

A two million dollar life insurance might seem like an insane amount of insurance, but the truth is, its not really.  Especially to people that live in more affluent areas, such as the New York Metro area, Los Angeles, the San Francisco Bay Area, Miami, Chicago, Etc. 

But the candidates for two million dollars of life insurance is not at all limited to these areas. 

buying a $2MM life policy requires more work

If you are following the old 'ten times earning rule', than anyone making $200,000 per year, might need a $2,000,000 level term life insurance policy.   Anyone that has a mortgage of $2 million plus dollars may also be inclined to need a life insurance policy for this amount.  There are all sorts of various life insurance calculators that you can use to assist in coming up with this calculation.

What is the Ten Times Earning Rule?

The ten times earning rule simple says that you should multiply ten.

For Example:

$50,000 per year times ten would equal $500,000 in needed coverage.

10 X $50K = $500K

Select Columns Layout

The ten times life insurance rule is admittedly a crude tool for deciding how much life insurance to buy.

Why Buying a $2 Million Dollar Life Insurance Policy is Different:​

When shopping for this much in insurance, often the internet may not be the best place to look. 

But solely relying on information online may lead you astray.   The higher the dollar figures  the more complex underwriting may become.

Although helpful for lower amounts of coverage, there are several reasons why shopping for a $2 Million Term policy is extremely different:

$2,000,000 life insurance policy may require a better insurance agent
  • Not all Life Insurance Carriers Offer Policies up to $2MM
  • Not all Life Insurance Carriers Offer $2MM policies beyond certain older ages, such as 76 years old. 
  • Most Insurance Carriers will have more aggressive underwriting
  • With higher benefit amounts it is imperative that pre-screening be done for your health, lifestyle, and job in order to assist you in getting the best price.
  • Increased need to consider affordability.
  • The Whole Vs Term Life and Invest the Rest Calculation

A two million dollar life insurance might seem like an insane amount of insurance, but the truth is, its not really.

Click to Tweet

How to Calculate How Much the cost of a $2 Million Dollar Life Insurance is:​

Buying higher dollar life insurance​ amounts as we have stated is not nearly as simple as lower dollar amounts.   Therefore its often not possible to get a simple estimate by looking online.   Therefore here are some general life insurance quotes, all at the $2,000,000 amount, all term life policies.

10 Year Term Life Insurance, $2,000,000 Death Benefit, California

Male, Aged 40, Non Smoker Preferred Plus, No Health Issues

Prices Ranging from $605 to $955 per year

20 Year Term Life Insurance, $2,000,000 Death Benefit, California

Female, Aged 40, Non Smoker Preferred Plus, No Health Issues

Prices Ranging from $955 to $1,289 per year

25 Year Term Life Insurance, $2,000,000 Death Benefit, California

Female, Aged 40, Standard Non Smoker, Some Health Issues

Prices Ranging from $2,964 to $3,211 per year

25 Year Term Life Insurance, $2,000,000 Death Benefit, California

Male, Aged 40, Standard Non Smoker, Some Health Issues

Prices Ranging from $3,744 to $4,136 per year

Great Candidates for $2,000,000 in Life Insurance:

The working Dad living in Washington DC, that has three kids and earns $220,000 per year on average.  His wife does not work and depends on him for all their income.

The working widowed Mom living in Chicago, who makes $250,000 per year and has two children.  Since her husband passed away over five years ago, she is financially all by herself

Both working parents who live in Connecticut.  She earns over $400,000 per year and he $300,000 per year.  They have three children from different marriages and their overall financial situation is extremely complicated.

The Single woman that lives in Los Angeles with no children.  She is a semi famous actress whose income fluctuates tremendously from year to year.   Some years on the low side of $400,000 and other yeas she makes in excess of $650,000.  Her home is valued at $4,200,000 and carries a $2,300,000 mortgage on it.  Since her brother also lives with her in a sub unit, she wants the house to be paid off in the event of her death.  She does not have enough money saved off to do this without insurance.


How to Buy a $2 Million Dollar Life Insurance Policy:

Buying a policy this large is complicated and it is usually best that you follow a couple of best practices:

  • Only work with experienced life insurance agent.
  • Stay away from a Captive Insurance agent and instead work with an Independent Agent that can offer you quotes from lots of different insurance companies.
  • Before you start the process, compute what you can afford to pay per year.
  • Complete a full pre health screening.  Ask about how your job and all of your hobbies can change your life insurance rates.
  • Review with your insurance agent all of the potential carriers.  Check the Financial Strength Rating of each and every one.
  • Make sure that you are giving 100% completely accurate answers to your insurance agent.
  • Make yourself available for the paramedical exam as soon as possible.
  • Do not buy any form of life insurance that you do not understand.
  • Don't sign anything that you do not understand.
Best Practices for $2MM insurance policy
Select Content Template

In this short article about buying multi million dollar life insurance policies, mostly we have avoided the debate about what type of life insurance to buy: Whole, Universal, or Term Life.  Frequent readers of my site will certainly know that I believe that Whole Life Insurance for certain five or six reasons, but in general I find that it will not make mathematical sense.   

Since this article is about people needing two million in life insurance it may be a situation when the client is considered to be affluent.  Affluent clients can theoretically decide to purchase a whole life insurance policy and come out ahead.   However, although this so called sales pitch is attempted often, it too is fraught with ruined financial balance sheets.  I would advise most of my clients to be extremely careful purchase a whole life insurance policy, even from an A++ rated company for any purposes other than pure insurance.

Why Clients Should Consider a $2 Million Dollar Life Insurance Policy:

Happy feeling after buying $2,000,000 term life policy

There are numerous reasons for people to consider buying a large life insurance policy such as a two million dollar policy.   The most popular reason is typically to assist in financially supporting loved ones, such as Wives and Children. Sometimes the necessary coverage can be used to pay off a loan on a home.  In the end a $2,000,000 life insurance policy will likely assist in putting your mind at ease.

Thanks for reading our article about a $2,000,000 life insurance policy.

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