How much life insurance coverage is enough? $2 million or something that’s higher? Certainly, some might think that a $1 million or $250,000 worth of coverage will do.
The purpose of life insurance is usually to protect your loved ones, and you don't want to leave them short when you're no longer around.
However, deciding how much coverage you really need isn't always straightforward. You need to know exactly why you're setting up a life insurance policy and what it's expected to cover when you pass away.
A $3 million life insurance policy might seem like a lot, but a death benefit of this size can quickly get used up. If you have a significant mortgage to pay off and want to support your family, this amount might not go as far as you imagine. While not everyone needs a life insurance policy with $3 million worth of coverage, it can be the right choice for many people.
Of course, with such high coverage, you have to think about how much it's going to cost. Comparing life insurance quotes is the best way to determine how much you could pay. It gives you the opportunity to input your own details and get a customized estimate.
For many people, $3 million is on the higher end when considering how much life insurance coverage they need. You might determine that $500,000 or even less would be adequate to cover your needs. However, there are several reasons you might decide that a higher level of coverage is required.
There are many things to consider when working out how much coverage you need. One of them is your mortgage or debts you have. If you buy property in a high-cost-of-living area, you could easily have a mortgage of at least $1,000,000.
Once your life insurance has paid that off, you still want to have some left over to take care of other expenses. And if you have a high-value mortgage, it's likely your other expenses and your income are on the higher end too.
You want your life insurance to match these so that your family can maintain the same standard of living after your death.
If you want to have $3 million life insurance, what type of life insurance should you be looking at? There are various options, but some might make more sense if you want to get the right price and the right coverage.
The main options you have are whole life insurance or term life insurance. Whole life insurance does more than simply provide you with a death benefit. It can also be used as a tax-deferred savings account, which you can also borrow from if you need to. This cash value means that the value of your policy grows over time.
However, this can also make whole life insurance expensive. It's a type of life insurance that's designed to last for your whole life, which means you'll pay more. But the benefits can definitely outweigh the downsides for many.
Term life insurance is your other option, and can help you to save money. You can get the $3 million coverage that you want, but it will only be for a set amount of time. However, you do get to decide how long that is. It could be just a handful of years, or perhaps as long as 30 years.
One thing to take into account is that if you take out your policy when you're older, it could cost you more. So, although term insurance is renewable, you could end up paying more when it's time to renew. Additionally, you can convert term life insurance to whole life insurance with some providers.
Get all the best quotes from leading providers in a click of a button!
Before you take out a life insurance policy offering $3 million, you need to work out how much life insurance coverage you really need. There are some different factors you will want to think about to work this out. Start with the following list to help you decide just how much coverage you need:
Your income-Multiplying your annual income can be a good way to work out a minimum amount of coverage for your life insurance. Start with a multiple of 10, then consider other factors to see if this is enough
Your mortgage and other debts-You probably want your life insurance to pay off your mortgage, and this can even be required by mortgage providers. Your coverage should take care of your mortgage and other debts that you might have
Your regular expenses-In addition to any debts, your regular expenses such as bills and daily living costs are also important to consider. Think about how long you want your death benefit to be able to pay for these expenses for your family
Extra expenses-Other expenses after your death could be important to consider too. These could include things like funeral expenses or medical bills that aren't paid for by your medical insurance
You might decide that you want to take out $3 million in life insurance coverage. But will you qualify for this amount of coverage? It's a large amount and you need to be able to afford the premiums. Additionally, the insurance company won't want to give you a high amount of coverage if they see you as high-risk.
Whether you are eligible for this level of life insurance coverage will depend on a number of different things. You can't truly know whether you are eligible until you make an application, but requesting a quote from a provider will also give you a good idea of whether they will approve your application.
You could find that you are limited in how much coverage you can take out, perhaps by your age, your health, or other factors. If you are looking at term life insurance, you could also find that the length of the term is limited by your age.
When you're looking at the average 3 million dollar life insurance policy cost, you can find that there is something for most budgets. Of course, you can expect to pay more if you're looking for coverage at this level. However, you can still find policies that you can afford. Below you can see some rates for $3 million term life insurance.
| Customer | 20 Year Term Insurance | 30 Year Term Insurance |
|---|---|---|
| 30 year old male | $104.53 | $153.31 |
| 30 year old female | $86.50 | $122.51 |
| 40 year old male | $163.67 | $297.57 |
| 40 year old female | $104.53 | $232.89 |
| 50 year old male | $569.42 | $922.95 |
| 50 year old female | $407.84 | $649.58 |
You can find that in some circumstances, 3 million dollar term life insurance is cheaper than whole life insurance. This is because term life insurance has a set end date, making it a more affordable option. However, some people still prefer whole life insurance for the other benefits that it provides.
The cost of your life insurance will be affected by the type and amount of coverage you choose, but that's not all that matters. Your profile as a policyholder also makes a difference to the price. You could pay less if you're younger or even if you're a woman, are in good health, if you have a low-risk occupation, or if you have an active lifestyle.
For a further idea of the 3 million life insurance policy cost, here’s another table showing the rates of the companies you might want to consider:
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| Fabric | $56.87 | $682.44 | Easily applying online, no medical exam policies |
| Ethos | $74 | $888 | 10 year term life insurance with money back guarantee |
| USAA | $74.15 | $889.80 | $2 million life insurance for military personnel |
| Haven | $79.47 | $953.64 | $3 million life insurance with tax free payouts |
| Northwestern Mutual | $94 | $1,128 | Flexibility |
| AARP | $240 | $2,880 | $3 million life insurance for seniors |
Get all the best quotes from leading providers in a click of a button!
Not all insurance companies are willing to offer as much as $3 million in coverage for life insurance. Some have lower coverage limits, while others might require you to have a medical exam if you want to access higher coverage amounts. If you're looking for an insurance company that will give you $3 million of coverage, take a look at these options.
Various coverage options for term life insurance
Fully online with an easy quote option and application
Policies with up to $5 million coverage
Only offers term life insurance
Coverage can't be increased after purchase
Fully online insurance providers are very popular with people who want to get set up quickly. Fabric is one of the options available to get the coverage you need without any hassle.
This company allows you to get a quote online and purchase it. You can do this without talking to a Fabric insurance agent. Note that the company will initially offer a $2 million maximum coverage. Nonetheless, you can extend the available coverage amounts by clicking a link provided by Fabric’s life insurance quotation tool.
You can get covered with no medical exams. Moreover, in case you want to switch to another company later on, doing so is very easy because Fabric can instantly cancel your coverage without any charges.
Best for: Easily applying online, no medical exam policies
Average cost: $56.87 per month
Our rating: 10/10
Ensures that older individuals enjoy comprehensive life insurance coverage
Highly involved
Quote online or call
Customers must be AARP members to apply
AARP works best if you’re someone who is currently aged 60 and above. This is a non profit organization that aims to help seniors with healthcare and finances. AARP works with New York life to give $3 million term life and whole life insurance to its members. Note that you might be referred to a New York life insurance agent for a quote. Though a bit traditional when it comes to granting coverage, AARP is still good because it offers numerous benefits alongside its life insurance for seniors.
Best for: $3 million life insurance for seniors
Average cost: $240 per month
Our rating: 10/10
Automatic underwriting
Get an estimate of your rates online
Works with multiple insurance companies to grant you coverage
Doesn’t allow you to convert your term life insurance into a permanent life insurance policy
Ethos works with multiple insurance companies to grant comprehensive $3 million life insurance coverage. That said, your policy from this company comes from different underwriters depending on risk profile. Another notable thing about Ethos is that most insurance applications are done with no medical exam. Moreover, similar to Fabric, you can get a quote online and purchase it.
Best for: 10 year term life insurance with money back guarantee
Average cost: $74 per month
Our rating: 10/10
Specializes in working with military personnel
Upgrade to permanent life insurance policy with no medical exam
Child coverage included
Highly exclusive
Working in the military is dangerous. This is why most insurance companies give high rates to military personnel. USAA exists to provide a solution to this problem. It grants $3 million life insurance coverage to retired and active military personnel at fair rates. Also, it doesn’t care whether you’re deployed overseas.
Your $3 million life insurance coverage from USAA has life events and child coverage. In case you pick term life insurance, USAA gives you the opportunity to convert your policy into a whole life policy after 1 year of enjoying coverage.
Best for: $2 million life insurance for military personnel
Average cost: $74.15 per month
Our rating: 9/10
Offers term life insurance from 5 years to 30 years
Backed by a long-standing insurance company
Easy to apply online
Other financial services available
No convertible term life insurance option
Low coverage for no-exam policies
Haven is an insurance company with policies underwritten by MassMutual and C.M. life. You can get $3 million life insurance coverage by availing Haven Term; a term insurance plan with tax free payouts, has level premiums, and accelerated death benefits. You can avail Haven Term with no medical exams required. But still, this doesn’t apply in all cases as stated by the company.
Best for: $3 million life insurance with tax free payouts
Average cost: $79.47 per month
Our rating: 9/10
Both whole and term insurance are available
A choice of insurance riders to add to policies
Convertible term insurance with no medical exam
Need to get in touch to find out about coverage limits
Northwestern Mutual is an excellent choice if you're looking for flexible coverage. They have a number of different products to choose from and different ways to customize your plan too.
Best for: Flexibility
Average cost: $94 per month
Our rating: 8/10
Compare quotes for life insurance to find out how much a $3 million policy will cost you. Start by clicking the “Get Quotes” button on this page.
Excellent prices and customer service, and a very straightforward online shopping experience.
Incredible experience from quote to claims!
You wouldn't find such life insurance coverage, such excellent experience online, service and rock bottom rates elsewhere! That's my experience however. Don't think twice.
Very few coverage options... you are very limited on what you get life insurance wise, there are much broader coverage options on other life insurance companies
very indifferent about it
Not all those who wander are lost.
Disclosure: Insuranks.com is an independent educational comparison service and an advertising-supported publisher. Some of the companies/offers that appear on the website are from our partners which we may receive compensation from. This may influence which companies/offers we write about and where and how it appears on the site. However, this does not impact our assessments. We solely highlight companies, products, and offers that can help you make smarter insurance decisions.
