Most experts agree that many people need life insurance policies that are 10-15 times their annual income. In several cases, that benefit amount can exceed $1 million. But what happens when you own a successful small business or your income level or assets require a life insurance policy in excess of $10 million? What about $50 million? In certain cases you may require life insurance in amounts that feel like too much—but are actually perfectly reasonable.
At SelectQuote, we can help you find life insurance that meets your unique needs. Whether you need a large policy to help provide your loved ones with a hefty financial safety net or to help safeguard business assets after your death, there are options. Let’s walk through when—and for whom—a $10-50 million life insurance policy makes the most sense.
What can a $10-50 million insurance policy be used for?
A $10 million insurance policy or a $50 million insurance policy can be used for several purposes, including standard life insurance needs like:
- Covering final expenses
- Paying down debt
- Replacing income
- Providing a financial safety net for the future
- Estate planning
- Business partnerships
- Key person (key man) coverage
- Charitable bequests
- Stock redemption
- Divorce agreements
- Intellectual property
Other use cases for insurance policies this large can include purchasing business assets or buying a new home. Your life insurance agent can walk you through how and when a large insurance policy makes sense for your needs.
How do I qualify for a $10-50 million life insurance policy?
Qualifying for a $10-50 million life insurance policy requires more information than smaller life insurance policies. There are typically coverage limits for life insurance policies to ensure that you’re not:
- Buying more life insurance than you need
- Covered for substantially more than what your risk level affords
You’ll likely need to prove a substantial source of income to justify the policy. You may also be asked to prove that having such a significant policy amount provides financial benefits to your beneficiaries.
Who qualifies for $10-50 million life insurance policies? Common policyholders in this range include CEOs, professional athletes and other highly compensated individuals.
How does approval work for $10-50 million life insurance policies?
In addition to the financial qualifications, life insurance at these amounts will typically involve similar insurance underwriting practices. You’ll be subject to medical underwriting—including undergoing a medical exam. You will be asked about your health history, age, if you smoke and other standard health questions. The younger and healthier you are when you apply for the policy, the better chance you’ll have of being offered more affordable premiums.
Cost of $10 Million Life Insurance Policy
Life insurance premiums are determined by many factors, including your age, health history and type of policy. A $10 million term life policy will likely cost less than a permanent (universal or whole life) insurance policy for the same amount. The most important practice when shopping for life insurance is to compare different life insurance rates and shop for several policies at once. In some cases, a $10 million term life insurance policy may be priced at $850 per month for 20 years.
Cost of $50 Million Life Insurance Policy
If a $10 million life insurance policy is more expensive than a $1 million policy, rates for $50 million in coverage will be even higher. If you know you want or need $50 million coverage but hesitate because of the cost, consider buying this coverage as a term life insurance policy with guaranteed level premiums that you can fit into your budget.
Premiums for a $50 million term life insurance policy for a 40-year-old male in excellent health can cost upwards of $1,000 per month. Permanent life insurance policies for a similar situation can exceed $13,000 per month.
How do I know how much life insurance to buy?
A good rule of thumb for buying life insurance is to find a policy with a death benefit that exceeds 10-15 times your annual salary. If you have significant debts or assets—including a business—that amount may be even higher. If you have any concerns about the cost of life insurance coverage in excess of $10 million, explore coverage amounts with a life insurance cost calculator.
If you’re not sure which policy makes the most sense for you, consider buying term life insurance first. Term life insurance policies tend to be more affordable than universal life policies, and can be upgraded to whole life policies at the conclusion of the term.
You may find that your insurance needs change as you get older; buying a home, having children, changing jobs and getting promotions are all life events that should spur you to examine your current life insurance coverage and make adjustments where necessary.
SelectQuote can help you shop for life insurance no matter how big your coverage needs are.
Shopping for life insurance policies shouldn’t be stressful. That’s true whether you need $1 million, $10 million or $50 million in insurance coverage. At SelectQuote, we can help you find the right insurance policy by comparing rates from several of the most trusted insurance companies at once.