Can anybody buy a million dollar life insurance policy? It sounds too good to be true, and it is. Many people are offered a low-cost life-insurance policy in the United States by a life insurance company. However, to get such a high-priced policy, the buyer would have to prove a financial need for such a large amount of coverage.
To qualify, insurance providers require some sort of financial reasoning for such high-priced policies, usually because life insurance is simply designed to replace lost wealth, never add to it, and not grow it. For example, suppose you are in your fifties and you have worked all your life, earning a nice income as a teacher. The last thing you would want to do is give up that steady income and lose your home and other assets in a fire. You could buy a one million dollar life insurance policy, assuming you were healthy enough to carry the policy until the age of 80. That would seem like an extreme decision, but it is very common among middle-aged, blue-collar workers who work long hours and receive a modest pension.
What if instead of the teacher, you are a married man who has two teenage children. You earn a good income as a mechanical engineer. Your death benefit is less than the combined total of your mortgage, your credit cards, and your life insurance rates.
So what should a person who can barely afford a million dollar life insurance policy do? One solution is to borrow money from a friend or family member, secure it with a second mortgage, and use the funds to pay off your debts. This could result in a negative impression on your financial statement, but if you can't do the math, your friend may be able to help you out. Another option is to get another job. With unemployment on the rise and many people losing their jobs, employers are more anxious than ever to hire someone who has a good record of financial responsibility.
How do you go about getting a million dollar life insurance policy at rock bottom prices? Get free five million dollar life insurance quotes and compare the premiums against the benefits. Remember to insure your life and credit scores against the premiums. If you have a history of serious health problems, premiums will be higher.
Another option to lowering your monthly payments is to increase your age. For example, if you are at age 75 and plan on living until age 80, you could get away with paying ten million dollars less per year in premiums. On the other hand, if you are still young and don't expect to retire until the age of 80, you will probably need to pay more. The general rule is that as you age you will pay more for your life insurance.
Many people start off by buying a million dollar life insurance policy with a death benefit that is very low. As they age, they increase the death benefit. But this means that they have a smaller cash reserve, which means that they have to take out loans or use their credit cards more often. When they reach the age of eighty, the death benefit starts increasing and the monthly payments get larger. They end up in the same situation as those who haven't taken care of their financial obligations.
A fully underwritten life insurance policy means that you have to pass a medical exam, pass a physical exam, and have a thorough financial disclosure statement done. This will reveal any pre-existing medical conditions and take into consideration your current lifestyle factors. Once the agents get through all these requirements, they will make a decision on whether you are a candidate. If you don't pass the medical exam, you will not qualify. If you do, then you will probably have to pay a higher premium because of your age and health. Also, those who have had a bankruptcy will have to pay more money.