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Who needs a $2 million life insurance policy?

Sometimes more is better. Especially when “more” is more financial protection for those you love. Learn when $2 million in coverage may make sense.

Sometimes more is better. Especially when “more” is more financial protection for those you love.

More people will be able to easily purchase the right amount of coverage for their financial situation. And at a price that’s probably more affordable than they think. Sometimes that means purchasing a $2 million life insurance policy.

Is term life insurance worth it? If you earn $200,000 a year, $2 million in coverage may be just about right. And even if you earn less than that, there’s the mortgage, auto loans, and the cost of sending your kids to college to consider.

Most of us would leave behind financial responsibilities, which is why it’s important to balance them with just the right amount of life insurance coverage to help protect your loved ones.

In addition to determining how much coverage you want to buy, it’s important to shop around and understand what you should factor into your policy decision making.

But, there are a few best practices when shopping to ensure you choose the right policy and insurance provider for your financial situation. Here’s what you need to know when shopping for a $2 million life insurance policy:

Who needs a $2 million life insurance policy?

Not everyone needs a $2 million life insurance policy. To put it frankly: It’s a lot of coverage.

Most experts recommend coverage that’s five to 10 times your annual income. For an individual making $200,000 per year, that means a $2 million policy might be the right amount of coverage. Or, for those with several young children and substantial debts, more than $1 million in coverage could be a better choice. But, there’s no reason to leave that up to guessing.

To determine the right amount of coverage for your situation, an online life insurance calculator is a valuable tool (that requires little-to-no math). It takes into consideration annual income, age of children, debts and other factors to recommend coverage that can help adequately protect your loved ones financially.

The cost of a $2 million life insurance policy

LIMRA research found that most people drastically overestimate the cost of life insurance. For instance, when asked how much a $30-year, $250,00 policy would be for a healthy 30-year-old, the median estimate was about $42 per month. More than three times the actual cost for that size policy.

A $2 million policy can be a lot more affordable than you probably think. A healthy 30-year-old woman can buy a 20-year, $2 million policy starting at $53 per month. That’s substantially less than most cable bills (and that cable bill doesn’t typically accompany a warm and fuzzy feeling of providing a safety net for your family).

Remember, pricing for coverage is more affordable the younger and healthier you are. That’s why, if you know you need coverage, you’ll want to lock in your lower rate now.

Rates are also impacted by the term length of policy you choose. A 30-year term costs more than a 20-year term or a 10-year term. The bottom line: Your age and health, the amount of coverage, and the length of your policy will all impact how much you pay for coverage each month.

Here are some examples of the cost of coverage for people in excellent health for a Haven Term policy, issued by MassMutual.

30-year term life insurance rates
AgeCoverage2000000
30Male121.53
Female92.77
35Male143.02
Female116.12
20-year term life insurance rates
AgeCoverage2000000
30Male62.75
Female53.27
35Male71.35
Female59.32
10-year term life insurance rates
AgeCoverage2000000
30Male37.8
Female32.65
35Male39.53
Female34.37
Source: Haven Life

Buying $2 million in life insurance coverage

At Haven Life, the process of applying for a $2 million life insurance policy is simple.

You can get a real, personalized rate by telling us a little about yourself through an easy online questionnaire. We ask for your name, your birthday and some lifestyle and health history information. We’ll evaluate those responses in real-time to give you an instant decision on coverage eligibility.

For policies more than $1 million, a medical exam is required to finalize coverage. The exam is free, takes about 20 minutes to complete and can be scheduled at a time and place of your choosing. Medical exam or not, this is still one of the easiest ways to buy a dependable policy.

To be eligible to apply for a $2 million policy, you must:

  • Be under 60 years old
  • Be a U.S. citizen and resident
  • Not be an active military member
  • Not intend to use the policy for business purposes

Making life insurance actually simple

Haven Life’s mission of making life insurance less hard boils down to one thing: Putting the customer first.

To accomplish that, we need an experience that’s convenient (check) and robust options so that customers can get the right coverage (check.)

After considering how your family could afford these expenses without your income, you might find that $2 million in coverage is just right, or you could discover that you need a bit more or a bit less. Again, a life insurance calculator can use all this information to provide an estimate based on your family’s situation.

So who needs a $2,000,000 life insurance policy? The answer may well be “you.”

Life insurance needs aren't one-size-fits-all.

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Tom Anderson

About Tom Anderson

Tom Anderson is an award-winning financial journalist whose work has appeared in CNBC.comKiplinger’s Personal FinanceMoneyMonocle and Wired. He was a 2008-09 Knight-Bagehot Fellow in Economics and Business Journalism at Columbia University.

Read more by Tom Anderson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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