$5 Million Whole Life Insurance, Why Get it and How Much Does it Cost ?

Written by CFA Insurance

When it comes time for you to select a life insurance policy, it’s best to do your research. You need to make sure that you fully understand all of your options so that you can make an informed decision. By doing this, you will put yourself and your family in a better place financially long-term.

One of your options is whole life insurance. This is just one kind of life insurance, but it could be the right one for you. Make sure you understand what it has to offer before signing anything. Life insurance policies can be complicated to truly get, but they are essential so it’s worth figuring out how they work.

Remember that there is no one right life insurance policy. It truly depends on your personal needs and the needs of your family. Make sure you’re keeping those needs in mind as you look for life insurance. Some life insurance policies will be better for you than others. Looking into the different types of life insurance is a great place to begin.

To start, we’ve broken down whole life insurance and, more specifically, $5 million whole life insurance. Take a look at these details to get some insight into one of your possible options.

What is Whole Life?

Whole life insurance is one of your life insurance options. It’s a type of permanent life insurance. It is exactly what it sounds like. It lasts for the duration of your life. Other types of life insurance last for different durations of time. For example, term life insurance lasts for a set number of years or a term. With whole life insurance, you get to keep the same policy for as long as you live.

With whole life insurance, you will get a guaranteed death benefit. This is usually a fixed death benefit as well. This helps to give you the peace of mind that your loved ones will be well taken care of. Plus, they will know how much they are receiving from the death benefit and can plan accordingly.

What’s great about whole life insurance is that your premiums will remain level throughout the duration of your policy. You won’t have to deal with periodic fluctuations in premium costs over time. This makes it easy for you to predict what you will be paying.

The rate of return is guaranteed with whole life insurance. When you have a whole life policy, you will be earning interest. The interest amount is guaranteed to earn at least a minimum amount. You can plan based off of the minimum amount alone and go from there. 

With whole life insurance, you will also have the opportunity to add on all kinds of riders. Take a look at your options to find the ones that might fit your needs. Different companies may offer their own riders so look around for the best selection.

For most life insurance policies, you will need to get a medical exam. This is how the insurance company decides how much of a risk it is to insure you. If you would like to skip the medical exam, you will have to pay more. This is for the protection of the insurance company because they don’t know how risky it is to insure you.

Why It’s More Expensive

Whole life insurance is more expensive than some of the other popular life insurance options. This is definitely something that you should think about as you do your research. If you’re able to spend a little bit extra on your life insurance, a whole life policy is a great option to keep in mind.

When you get whole life insurance, you are getting it for your entire life. Since the premiums remain level, there are no rises and falls with inflation over time. These higher costs can make up for some of that. You can expect to pay $250 more per month for whole life insurance compared to term life insurance.

Whole life insurance allows you to build cash value. This is one of the main reasons that it costs more than other options. If building up your cash value is important to you, it can be worth it to pay a little extra for your life insurance policy.

Think about the convenience of not having to get different life insurance policies. The same one will last for the duration of your life. This takes a lot of extra work and pressure off of you. You can focus on other things and know that your life insurance policy is in place.

Usually, you will pay for a whole life insurance policy annually. You may pay more frequently, but this can lead to additional fees. Some companies may allow for different payment plans. It all depends on the company though so be sure to find out when talking to a particular company.

Investment Aspect

Whole life insurance policies can be used as an investment. This is a little bit different from other types of life insurance, which don’t usually offer investment options. With whole life insurance, some of your money accumulates into cash value. This is a tax-sheltered investment. The policyholder is also able to borrow against the cash value that has been accumulated.

You can use whole life insurance as an investment paired with your other investments too. This will maximize the amount of money that can be passed on to your family members later on. Having multiple investments can help to ensure that your family has everything they need.

Using whole life insurance as an investment option can get somewhat complicated so it may be a good idea to get professional guidance as you get started. This can help to clear up any questions that you may have about the policy and its investment aspect.

The Average Cost of Whole Life

It can be difficult to determine an average life insurance price because of all of the factors that go into that price. Everything from gender to age plays a role. Plus, there are so many different amounts you can be insured for.

In general, life insurance costs between $500 to $1,500 per year. This is between $40 to $150 per month. Since whole life insurance is more expensive, it will be on the upper end of that range.

If you choose to get whole life insurance, you can expect to pay about $250 more per month. This is simply because of the duration of the policy and all of the extra things that come with whole life insurance compared to term life insurance.

Whole Life $5 Million Life Insurance Cost

Before you really get into a $5 million life insurance policy, you should learn more about what it will be costing you. This can then help you to decide if it’s truly worth the money. You will also be able to make sure that you can really afford it. If you can’t afford it, you should look at term life insurance or a smaller whole life insurance policy.

For a 40-year-old male who is insured up to age 121, rates can range from $28,450 to $44,590 annually. For a 40-year-old female who is insured up to age 121, rates can range from $24,200 to $39,175. These are some pretty large gaps since the rates are for different companies and different whole life policies. These rates were calculated for people in good health so you can expect different rates if you aren’t healthy.

You should note that the pricing for a $5 million life insurance policy is dependent on a number of factors. You won’t necessarily pay the same amount that someone else does. Your health, age, and gender are major factors. Pricing can also depend on the insurance company and even your location. For the most accurate rates, you should work with a company to calculate possible rates.

Life Insurance Rates by Age

Life insurance rates vary from person to person. This can be based on a long list of factors, but age is one of the biggest influencers. When you’re looking at insurance rates, look for ones provided for your specific age to get the most accurate quotes. As you age, the price, cash value, and death benefit will be affected. It’s best to get whole life insurance at a young age because you will pay less.

Here are some examples of monthly life insurance rates by age. They have all been calculated for a non-smoking male in good health with a $250,000 policy.

Age 25: $177.70

Age 30: $212.50

Age 35: $260.57

Age 40: $327.99

Age 45: $415.86

Age 50: $530.92

Age 55: $677.73

Age 60: $864.78

Here are some examples of life insurance rates by age for a non-smoking female in good health with a $250,000 policy.

Age 25: $155.73

Age 30: $189.01

Age 35: $218.59

Age 40: $263.61

Age 45: $328.86

Age 50: $420.86

Age 55: $543.97

Age 60: $705.35

Note that the rates for a female are lower. This is because women live longer statistically. The insurer doesn’t have to pay out the death benefit as quickly with women as they do with men. You can expect lower rates for women across the board.

These are just examples. You will be able to get rates based on your personal health and a lot of other facts. There are also variations from one company to the next. The policy amount influences the rate too.

It’s a good idea to use rate calculators to get an even better idea of what you will be paying based on your needs. This can make the pricing more clear and accurate for you specifically.

If you are on the fence between term and whole life insurance, you should know that the whole life is more expensive because you are getting more from a policy. The rates shouldn’t necessarily be compared side by side because they are each for a different type of life insurance and come with their own benefits.

Who Needs $5 Million in Whole Life Insurance?

Not everyone needs $5 million worth of whole life insurance. This is a large policy that is best for select people. It can be too expensive for some people. It also just isn’t necessary for everyone to have a large policy like this.

One person who might need a $5 million whole life insurance policy is someone who has estate planning needs. This larger policy makes a bigger impact on estate planning and can be beneficial. This will also help with estate taxes.

Another possible need for this bigger life insurance policy is if you’re making well into six figures. At this point, you would be in a good place to pay for the policy. If you can afford it, having such a large policy is never a bad thing. You will be able to grow your cash value and your overall death benefit even more because of it.

Summary

Whole life insurance is a type of life insurance that can be useful for some people. Making sure that you understand it will help you to get the most out of your policy. Whole life insurance has many benefits, such as the option to build cash value. This isn’t something that is available with all life insurance policies so you should consider whole life insurance if that’s important to you.

Something that is especially convenient is level premiums. This makes it easy for you to plan ahead and make your payments. You will know exactly what you will be paying for the duration of your policy and your life. Other policies aren’t so predictable.

$5 million whole life insurance policies are worth considering as you search for a policy. These are most useful for people who make well into six figures or have estate planning needs. For others, that large of a policy isn’t usually necessary.

Make sure that you compare rates and options between different insurance companies. Do as much research as you can to make this a smooth process. From there, you can make an informed decision and get the perfect life insurance policy to meet the needs of you and your family. 

$5 Million Whole Life Insurance Quotes

If you’re looking for a 5 million dollar policy than running quotes on an online quote engine isn’t for you. This is something you need a customized quote for. The good news for you is you’re at the right place. We shop with all of the whole life insurance carriers at no extra cost to you. We will do all the legwork with no obligation. Give us a call today and get a quote for $5 million dollars in whole life insurance. Welcome to Cfainsure!

About Jason Hill
About Jason Hill

Jason is the founder of CFAinsure. His years of experience in the business have helped him serve and represent hundreds of clients. Jason ensures his clients are well educated and informed by putting their needs first. Each appointment is tailored to individual needs, via specific materials and educational tools. The real benefit for his clients is the end result: peace of mind.

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