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How much does a $1 million life insurance policy cost?

It could be more affordable than you think. Find out if it’s right for you and your loved ones

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Fun fact (depending on your definition of fun): The average American worker makes between 1 and 3 million dollars over the course of their entire life, depending on their education and career, according to a recent survey by the U.S. Census.

So while a million dollars may seem like a lot of money, it’s actually the right amount of life insurance coverage for many families. That’s because, in general, you want to buy life insurance with enough coverage to cover around 5 to 10 times your annual salary. This is so the death benefit can help your loved ones pay for a number of things, from final expenses to day-to-day costs like mortgage payments, tuition, even groceries.

To sort out if a $1 million policy might be right for you — and how much a $1 million term life insurance policy would cost if it is — we broke down the ins and outs of life insurance to help you make the most informed decision for your loved ones’ futures.

In this article:

What is a $1 million life insurance policy?

Life insurance works like this: You pay a regular premium, typically every month, and in the event of your death, the insurer will pay your designated beneficiaries the amount of coverage you have purchased. How much you pay, how much coverage you receive, and how long you’re covered, all depend on what type of life insurance you purchase.

Broadly speaking, there are two main types of life insurance: permanent life insurance and term life insurance.

As you can probably tell, permanent life insurance generally lasts until you die. Term life insurance, however, lasts for a set amount of time (the “term”). Which one is right for you? Keep reading.

Term Life Insurance

Term life insurance policies cover you for a specific period, which you choose when you purchase the policy. Typically, you can get a policy for 10, 15, 20, 25 or even 30 years. This can be a great way to ensure your family is covered through your expected retirement, for example, after which your savings or pension may be enough to cover your expenses, and after your dependents (read: kids) are no longer, well, dependent.

Many people also elect to get coverage that lasts until they expect to pay off a large expense, such as their mortgage or their children’s tuition.

Because it lasts for a set amount of time, and many people are relatively healthy during those years, term life insurance is often more affordable than permanent policies.

Haven Life offers two types of term life insurance:

Haven Term: Fully underwritten life insurance

Medically underwritten term life insurance usually requires a medical exam. (Though not always, thanks to advances in technology.) Typically, it offers the lowest premiums, because the underwriter can base their evaluation on a complete picture of your health.

You can get up to $3 million in term life insurance coverage from Haven Term.

Haven Simple: No-medical-exam life insurance

Simplified issue term life insurance requires little more than filling out the application, and doesn’t require a medical exam for approval. This makes it quick and easy to get coverage, but it may cost more because the insurance provider is taking a risk without a comprehensive look at your health. You’ll also need to be truthful on your application, or you risk non-issuance of the policy (or non-payment of the death benefit).

You can get up to $1 million in coverage from Haven Simple.

Permanent Life Insurance

Permanent life insurance covers your entire life, from the day the policy starts to the day you die. This means it’s often more expensive than term life insurance, in exchange for lifelong coverage.

There are multiple types of permanent life insurance, with whole life insurance being among the most common. One benefit of whole life insurance is that you can usually borrow money against the value of the policy, though doing so might reduce the payout, and could come with unexpected tax repercussions.

Universal life insurance is the most flexible. It allows you to change or update your policy throughout your life, to accommodate changes in financial status or need or reevaluate your coverage based on your health or medical concerns. This allows you to lower your coverage and premium later in life when you may have fewer financial obligations that must be taken care of if you die.

What does a $1 million life insurance policy cover?

The payout from a term life insurance policy is often issued as a lump sum payment, and can be used on anything the beneficiary chooses. This includes immediate costs, such as final expenses (including funeral and burial), smaller expenses like groceries and even gas for your car, and bigger long-term expenses like mortgage payments, tuition or outstanding debt.

Think of it another way: A $1 million life insurance policy is designed to cover all the costs your loved ones will incur after you’ve died, but might not be able to afford without your income.

Who Needs a $1 Million Policy?

A million-dollar policy is just right for many families — slightly more than the average payout at Haven Life. It may seem like a lot, but the costs associated with grieving, as well as any remaining expenses, can add up.

When you’re no longer around to provide income for your family, the policy can help fill those gaps, allowing your partner or children to pay off your home, cover medical expenses associated with your passing, and make ends meet from month to month now that your income is out of the equation.

To determine if a million-dollar policy is the right amount for you, consider factors such as your average monthly expenses, family size, and current income. And again, there’s that oft-cited rule of thumb: Consider getting coverage worth 5 to 10 times your annual salary. If you make between $100,000 and $200,000 per year, a $1 million term life insurance policy could make sense for you.

How Much Does a $1 Million Policy Cost?

Term life insurance rates are determined by your age and general level of health. Other factors that can influence your life insurance premium, including age, life expectancy, current health conditions or risk factors, term length, occupation, and lifestyle or habits.

To determine your policy cost, you’ll complete a questionnaire that covers all of these factors, which an actuary will then analyze to determine the most cost-effective monthly premium for your policy. Depending on the policy, your assessment may include a basic medical exam sponsored by the insurer, which can result in lower rates.

You may be surprised to learn that a million-dollar policy can cost less than your monthly streaming service budget if you’re young and healthy.

The earlier you get covered, the better, as premiums on new policies tend to go up the older you get, particularly if new health issues appear. Plus, getting coverage today is ideal in case something happens to you tomorrow.

See the charts below for more information on how much a million dollar life insurance policy might cost depending on your age and term.

Average premium cost for a $1,000,000 term life insurance policy for Haven Term

AgeGender10-year term20-year term30-year term
Estimate based on pricing for eligible Haven Term applicants in excellent health. Pricing differences will vary based on ages, health status, coverage amount and term length. These prices do not reflect the rates for applicants in DE, ND, NY and SD. Coverage is available up to $3 million.

Average premium cost for a $1,000,000 no-exam term life insurance policy for Haven Simple

AgeGender10-Year Term15-Year Term20-Year Term


Estimate based on pricing for eligible Haven Simple applicants in excellent health. Pricing differences will vary based on ages, health status, coverage amount and term length. Haven Simple is currently not available in DE, ND, NY, and SD.

Protect Your Loved Ones With Haven Life

At Haven Life, we believe life insurance should be less hard. That’s why we’ve created a simple online platform where you can get a life insurance quote, apply for coverage and potentially even get coverage over your lunch break.

No one likes to think about the inevitable, but it’s best to take care of these things before it’s too late. Get started today, and your loved ones will be grateful you did.

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About Chantell Ritzert

Read more by Chantell Ritzert

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:

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