You’ve decided to leave behind a sizable life insurance benefit for your loved ones. You want it to be an amount that covers the funeral, the house, car, and even bills for a long time. Perhaps you are even in the upper middle class or wealthy tax bracket and need a large policy to cover expenses associated with estate transfers. Let’s say you’ve settled on $2 million as the amount of insurance you need for these goals. Now, all you need to do is find out how much $2 million of life insurance costs!
The short answer is “it depends on the type of life insurance policies”.
- A $2-Million 20-year term life insurance policy costs as cheap as $1,218 in annual premiums; and 30-year term costs $2,050 a year.
- A $2-Million whole life insurance policy costs as much as $31,400 a year with 20 years of premiums payment; or $23,040 a year if paying premiums for 30 years.
- A $2-Million Guaranteed Universal Life Insurance (or GUL) policy costs $10,848 in annual premiums, less than half the cost of whole life premiums.
- A $2-Million Variable Universal Life Insurance (or VUL) policy costs $10,602 in annual premiums. However, you should consider VUL policy only if you know how to invest. If you don’t have much investing experience, you should stick to GUL policy.
Regardless of the policy type, be sure to always comparison shop with several companies or a digital broker like Amplify, especially if you are interested in IUL, GUL, and VUL policies. They focus 100% on permanent life insurance policies (IUL, GUL, and VUL) and are able to pull several quotes from their partner carriers for you to compare and select the cheapest one for you:
How Much Does A $2-Million-Dollar Term Life Insurance Policy Cost?
If you are looking for an affordable life insurance policy while you are young, term life insurance is an appealing option. We’ve pulled quotes for $2 million dollars in coverage from several top insurance providers. These quotes are all for a man of average health around 30 years old.
The table below shows policies with a term length of 20 years. As you can see the average annual premium is about $1,200 or just $100 a month. This is a fixed rate premium, so it won’t go up during the 20 year term of the policy. Click on the company name to read our full review of the insurance companies.
|Insurance Company – Term Length 20 Years||Insurance Product Name – $2 Million||Premium Amount|
|Penn Mutual||Penn Mutual Protection Non-Convert Term 20||$1,218|
|Symetra Life Insurance||Symetra Term 4.0 – 20 Year Term||$1,220|
|Principal National Life||Principal National Life 20 Year Term||$1,233|
|Banner Life||Banner OPTerm 20||$1,234|
|AXA Equitable Life||AXA BrightLife 20 Series 160||$1,235|
|Zurich American Life||Zurich American Term 20||$1,250|
|Pacific Life||Pacific PL Promise 20||$1,250|
|Transamerica||Transamerica Trendsetter Super 20||$1,290|
As you can see, 20 years of coverage is very affordable. However, this term life insurance has a set expiration date at 20 years. Most policies will allow you to renew every five years after, but the cost of your policy could rise drastically as you age, eventually becoming too expensive to maintain.
What if you want to a longer term, say 30 years? It will be a bit more expensive. A 30-year term life insurance policy will cost a 30-year-old man with average health around $2,000 a year or $167 a month. This is a fixed premium for the entire 30-year period.
|Insurance Company – Term Length 30 Years||Insurance Product Name – $2 Million||Premium Amount|
|Penn Mutual||Penn Mutual Protection Non-Convert Term 30||$2,050|
|Symetra Life Insurance||Symetra Term 4.0 – 30 Year Term||$1,998|
|Banner Life||Banner OPTerm 30||$2,035|
|Pacific Life||Pacific PL Promise 30||$2,060|
|Transamerica||Transamerica Trendsetter Super 30||$2,090|
|Principal National Life||Principal National Life 30 Year Term||$2,043|
The 30 year term provides ten additional years of coverage at the fixed annual premium. As you can see the cost is slightly higher, but that’s because some of the increases associated with age are built into these premium quotes.
Of course, you’ll likely be able to renew many of these policies every five years after the initial 30 year term. The costs will simply rise a lot with each renewal to compensate for the increased risk of covering a senior.
How Much Does A $2 Million Whole Life Insurance Policy Cost?
If you don’t like the idea of the insurance expiring after a set number of years or having to renew every five years, there are other options in permanent life insurance policies. The most popular, yet also the most expensive one, is whole life policy.
Whole life insurance is an insurance policy that covers the policyholder for life as long as they’ve paid all of the premium payments. With this kind of insurance, you will make premium payments for a set number of years. Once all of the payments are made your policy is considered paid up. No more payments required and you are still covered.
We’ve pulled quotes for whole life policies from the two reputable providers for $2 million in death benefits. These are all policies with a 20-or-30-year payment schedule from age 30 to 60 years. They also provide guaranteed coverage of $2 million until the policyholder is 100 years old.
|Insurance Provider||Insurance Product||Type of Insurance||Premium Amount|
|Penn Mutual Life||Guaranteed Whole Life|
(30 years premium payment)
|Mass Mutual||Leg 20 WL|
(20 years premium payment)
Penn Mutual whole life requires 30 years of premium payment at $23,040 a year, making the total premium of 30 years $691,200, to pay $2 million death benefit to your beneficiary whenever you pass away before 100 years old. That is a 2.9x return on the investment if you consider this an investment for your loved ones.
Mass Mutual‘s Leg 20 WL offers a better return with 20 years of premium payment of $31,400 a year, making the total premiums for 20 years $628,000. With $2 million death benefit to your beneficiary when you pass away, it is a 3.2x return on the investment.
They both sounds to be not too bad an investment if you can afford it. However, is it really the best option if you do want a permanent policy that will pay out $2 million to your beneficiaries when you pass away?
We don’t think so. Universal life insurance policy, either guaranteed universal or variable universal, offers a much cheaper alternative with the same benefits.
How Much does A $2 Million Guaranteed Universal Life Insurance Policy Cost?
We also got quotes for a $2 million guaranteed universal life insurance policy and below are the 4 cheapest quotes. Guaranteed universal life insurance also offers permanent and guaranteed death benefit, it is $2 million in this case. And we designed the policy to allow the policy owner to pay all premiums for 30 years only, from 30-60 years old.
The main difference between guaranteed universal life insurance policy and whole life insurance policy is that guaranteed universal life insurance policy doesn’t offer a cash value account. So, if you are looking to also have access to the cash value account just in case you need it later, guaranteed universal life insurance is not the best option for you. If you only look for the permanent and guaranteed death benefit, it is the best option for you since it is only half of the price compared to whole life insurance.
|Insurance Provider||Insurance Product -30-years||Type of Insurance||Premium Amount|
|Protective Life||Protective Lifetime Assurance UL||Guaranteed Universal Life||$10,848|
|Penn Mutual Life||Guaranteed Protection UL||Guaranteed Universal Life||$10,956|
|American Life||Signature Guaranteed Universal Life||Guaranteed Universal Life||$11,403|
|Symetra Life Insurance Company||UL-G 6.0||Guaranteed Universal Life||$11,701|
The 4 cheapest quotes of a $2 million guaranteed life insurance policy is around $11,000 in annual premium, and paying for 30 years. The cheapest quote comes from Protective Life with its Protective Lifetime Assurance UL. This means that you will pay $330,000 for 30 years and your beneficiaries will receive $2 million whenever you pass away. That would make 6.1x return on your “investment”, which is quite a great return if you choose to look at it as an investment for your loved ones.
Be sure to compare several quotes to select the cheapest one for you. Work with a digital broker specializing in GUL policies like Amplify is a good option:
How Much does A $2 Million Variable Universal Life Insurance Policy Cost?
Guaranteed universal life insurance is a fantastic option, and so is variable universal life insurance. People usually buy variable life insurance policy when they want to maximize cash value account growth and plan to withdraw to supplement their retirement income. They are able to invest the cash value account in assets with higher return and higher risks.
Several insurance companies have recently offered permanent and guaranteed death benefit as a component in variable universal life policy, making it an attractive option.
We also got quotes of variable universal life insurance policies for a $2 million guaranteed death benefit up to 100 years old. Below are the cheapest 4 quotes.
|Insurance Provider||Insurance Product -30-years||Type of Insurance||Premium Amount|
|Prudential||VUL Protector||Variable Universal Life||$10,602|
|Securian Financial||VUL Defender||Variable Universal Life||$12,070|
|AG – American General||Platinum Choice VUL 2||Variable Universal Life||$12,815|
|Pacific Life||Pacific Select VUL 2||Variable Universal Life||$16,026|
The quotes are quite comparable with guaranteed universal policies’. In addition to the permanent and guaranteed death benefit of $2 million, the variable universal life policy will allow you to have access to a cash value account. However, you should only choose a variable universal policy if you know how to invest by yourself.
A Quick Comparison Among the Different Policy Types
If you picked up a Securian Financial VUL Defender policy and made 30 years of payments at $12,070 you’d end up paying the insurance company $362,100 with a guaranteed death benefit of $2 million. Plus, you’ll still receive coverage until you are 100 years old even after the premium payments end. Even if you outlive this policy, you’ll get the cash-value that has also built up in the policy over time back.
Comparing this to the Symetra Term 4.0 life insurance policy from the second table, you’d pay about $1,998 annually over 30 years and ultimately pay in about $59,940. So, it’s considerably less, but your term life will expire after 30 years and you don’t get any cash-value back
In summary, when just looking at the cost of premium payments over the years, term life insurance is much more affordable compared to a permanent life insurance policy. On the downside, you’ll only get coverage at that fixed rate for the set period of the term life insurance policy. If you are able to renew your policy at the end of those 20 or 30 years it will only be for five years at a time. Your premium payments will almost certainly go up too.
A VUL or a GUL are the products that will provide the best rates on permanent life insurance. However, they are still quite high compared to term life insurance. These life insurance policies also don’t need renewing after the premium period has ended. They are paid up and your insurance covers you until the age of 100 years.