Tips & Exclusions
$2 Million to $5 Million Life Insurance Quotes
So, what exactly are the requirements to buy $2,000,000 or more of life insurance?
And more importantly - how much does it cost?
Insurance providers are more diligent when approving large amounts of coverage, and there are additional requirements that would not be needed from someone buying a simple $100,000 policy.
Since these questions are so common, we've compiled this extensive guide for you to easily estimate your life insurance cost, and fully comprehend your options for purchasing coverage.
Quick Article Guide
Here’s what we'll cover in this post:
Large Policy Buyers - An Elite Group
You might be surprised to learn that "not just anyone" can buy a policy for, say, 4 million dollars.
... even if they can afford the premiums.
You must be able to financially justify your need for the amount of coverage you desire.
Purchasing $2,000,000 to $5,000,000 of life insurance coverage is commonly done by individuals with:
- Incomes in the $100,000 range or higher
- Real estate holdings
- Business owners
- Protecting family members from future estate tax burden
- Or looking to leave a liquid inheritance to an institution or individuals
Affluent individuals may reference our High Net Worth Life Insurance articles here.
If you are in the market for $2,000,000 dollars of life insurance or more, there are some health, lifestyle, and financial requirements that must be met in order to get approved.
Some clients we work with are surprised to learn about the requirements necessary to qualify for more than 2 million dollars of life insurance.
Every life insurance company has different financial, lifestyle, residency and health requirements that must be met to approve a life insurance policy. We will explain these requirements within this article, provide some sample quotes, and explain the application and approval process.
What Does an Insurance Company Need to Know About Me Before They Can Approve My Policy?
Before approving your policy, there are generally four major components of your health and lifestyle that most life insurance companies will evaluate. We've listed and explained each of these requirements below:
1. Country of Residency
The first and most important is residency. If you are a US Citizen or a permanent resident, click here to skip to the income requirements.
If you are not a US citizen or resident, you will be asked if you have a financial interest in the United States like family, property, investments, or a job. If not, it will likely be difficult to secure a large amount of life insurance.
In order to be approved for life insurance by a United States-based company, insurers generally require an applicant reside in the United States at least for the majority of the year. If you don’t, you may still qualify for life insurance, but only if all of the following requirements are met:
1. You will apply while in the United States and will be able to complete your exam and all necessary paperwork while in the United States.
2. You have some sort of financial interest in the United States. An example of this might be children in college in the U.S., property, or if you work for U.S. based company.
3. You have a bank account in the United States. The life insurance companies will not be able to set up withdrawals from a foreign country or address.
To learn more about residency requirements, please call us at 855-247-9555.
2. Current Income and Age
In order to get your life insurance application for $2,000,000 or more of life insurance approved, you will also need to financially qualify. Put simply, life insurance to protect an estate, not create one. Even more simply, you can’t be worth more dead than alive.
When applying for more than $2,000,000 of life insurance, or generally any amount over $100,000, insurance companies will require information pertaining to your income and net-worth. For some of my clients, this comes as a surprise, but no life insurance company will provide a large amount of life insurance unless it financially makes sense.
The question every insurer will ask you is, “If you and your income were gone tomorrow, what if is the financial loss to your beneficiary?”
In order to determine the amount of coverage you qualify for, insurance companies use a formula based on gross income and current age, also known as an “income multiplier."
An income multiplier essentially multiplies your age by the number of years you have remaining before reaching your expected retirement age. In the insurance world, this equation is also commonly referred to as your remaining “working years”.
Income Multiplier = Your Age x Working Years
Please keep in mind, every company has its own variation of this formula and some of life insurers tend to be much more lenient. The majority of life insurance companies consider your retirement age as 65 or 70, but a handful of companies can extend your working years to age 75.
An example of this is a recent client I worked with named Stan. Stan is 57-years-old, and needed $3,500,000 of life insurance to protect his family from estate taxes due at his death. Stan works part-time as a CPA and makes about $250,000 per year before taxes.
The company that Stan originally applied with could only offered him a maximum death benefit of $2,000,000. They considered his retirement age to be 65, even though he planned to work until age 70 or later. Stan decided to give us a call to see his best options were.
We advised him to apply with one of our A+ rated companies that considers full retirement at age to be as late as 75, providing him with 18 times his income instead of 8! Stan was approved for up to $4,000,000 of coverage, and accepted $3,750,000. Almost TWICE the amount of insurance his “home and auto” specialty insurer would offer.
Not surprisingly, the younger you are, the larger amount of coverage you can typically apply for, since you have more working years ahead of you. Please keep in mind your income as calculated on pre-tax income, so when estimating the amount of coverage you can qualify for, use your “gross” income, not your “take-home” pay.
Here is a table that will help you assess the amount of coverage you can qualify for:
|Maximum Amount of Coverage Available
|35 x your gross (pre-tax) income
|35 x your gross (pre-tax) income
|25 x your gross (pre-tax) income
|20 x your gross (pre-tax) income
|15 x your gross (pre-tax) income
|10 x your gross (pre-tax) income
|5 x your gross (pre-tax) income
In some cases, life insurance companies will actually overlook your income. Exceptions can be made for someone with a unique situation. Some examples might include someone with a high net worth, someone seeking insurance to protect an SBA loan, or someone who owns a successful business and needs to purchase key-person coverage.
If you are not sure if you can qualify for the amount of coverage you need, feel free to call us to speak with a licensed agent at 855-247-9555. All of our agents have multiple years of experience, and we're licensed in all 50 states.
3. Health Insurability
How does your health affect your life insurance rates and approval?
The cost of life insurance is directly correlated with overall health. Small, non-vital health issues are typically overlooked and do not impact life insurance rates.
Some examples of overlooked issues include medically-controlled cholesterol, blood pressure, hypothyroid, or acid reflux. In fact, some carriers will even allow someone to be up to 50 pounds overweight and still qualify for the best rate category, if their blood pressure, cholesterol and blood sugar are within age-recommended range.
If your health concerns are more serious, don’t give up before speaking with us. JRC works with 50+ companies for a reason. Each has unique “underwriting niches”, or health areas where they are more liberal than their competitors. It’s the reason there are so many life insurance carriers out there.
These niches include: various types of tobacco use, health issues like heart disease, cancer history or diabetes. Some companies will literally charge double that of a competitor, for the exact same underwriting criteria. This is why it is so important to work with an independent agency representing at least 20 insurance companies.
JRC has access to over 50 insurance companies' guidelines, not six or eight like our largest competitors. In addition, we provide a free service of “re-shopping” your policy once we receive your exam results, making sure we not only quote the best rates, but deliver the best rates you medically qualify for, even if it’s a different insurance company than where we began the process.
Am I Required to Take an Exam to Prove That I Am In Good Health?
Even if you're in excellent health, to qualify for more than $2,000,000 of fully-underwritten life insurance, (not stripped-down accidental death insurance) a free mini-medical exam is required. The exam is paid for by the insurance company and typically takes about 25-30 minutes.
To make the exam as convenient as possible for our clients, the nurse will come to your home to complete your exam. They’ll measure height, weight, and your blood pressure. The nurse will also collect a urine and blood sample.
A mobile EKG or ECG is also generally administered when underwriting $1 million or more of coverage, especially for applicants who are 50 or older. The exam results are usually provided to you online you you can request for them to be be mailed to you for your records.
Some of our clients forward these to their physician, often eliminating the need for an annual physical, since the tests are more comprehensive than what most medical insurance companies will pay for these days.
Penn Mutual recently began offering up to $5 million of term or permanent life insurance without a medical exam. Guardian Life and John Hancock also offer up to $3,000,000 of term insurance to qualified applicants. These are good options for younger applicants, but most folks will save money by completing an exam.
The tables below provide sample monthly rates for $2,000,000 of level term coverage for a healthy non-smoking male. The rates are for the “preferred best” risk category, and are from an insurance companies rated A- or better by AM Best. For comparison, we’ve also provided rates guaranteed until age 90.
Male Monthly Sample Rates for $2 Million of Coverage
|10-Year Level Term
|20-Year Level Term
|30-Year Level Term
|Level Rates to Age 90
*Sample rates above are for a male, non smoker, in excellent health and are not to be considered an offer of insurance. Each individual must apply for coverage individually for personalized rates. Rates are accurate as of 12/08/23 and are subject to change.
Not everyone will qualify for “preferred best” rates, which represent the lowest insurable risk of 12 risk categories. If you have health issues like elevated blood sugar or well-managed type II diabetes, you can still for "standard” rates, which are 4 out of 12 on risk. They represent average risk for a given age group.
Since few of us are “Supermen/women”, standard rates may even be available to someone who has been successfully treated for cancer or is 50-75 pounds above “ideal weight”.
This article shows the difference between preferred and standard rates. As you can see, it costs about double the best rate.
The link above also helps you assess your rate category if you're not sure what health class you'll fall into. Better yet, call and speak with one of our agents free pre-qualified risk assessment and insurance quotes comparisons. We can quickly compare rates from more than 50 top-rated insurance companies to find your best option.
Why Would A Life Insurance Company Decline my Application?
Life insurance companies can reject or deny your life insurance due to your health, lifestyle, residency, or income. Some of the most common reasons a person’s application are declined are:
1. If you collect Social Security for a disability or suffer from mental health issues. Common reasons for declining an application for life insurance, especially over $1,000,000 of coverage include PTSD, major depression or anxiety, suicidal gestures or attempts, schizophrenia and bipolar disorder.
2. If you reside in a nursing home or an assisted living facility, no more than $25,000 of coverage is available. The life insurance companies will also limit your coverage to $25,000 if you are confined to a wheelchair.
Family members, other than a spouse, cannot buy life insurance for another adult. The applicant must be involved in the process and approve the purchase, though another family member can pay for the coverage and be the beneficiary.
3. If you receive treatment for any type of mental illness that affects your memory or any memory issues like dementia, Alzheimer’s, cognitive impairment, etc.
Family members, other than a spouse, cannot buy life insurance for another adult. The applicant must be involved in the process and approve the purchase, though another family member can pay for the coverage and be the beneficiary.
4. If you are currently receiving any type of treatment for cancer, with the exception of basal cell and squamous cell skin cancer. In order to be approved for term life insurance, the insurance companies want to see that your cancer treatments are complete and at least a year has passed since your last treatment.
The life insurance companies will not approved an underwritten policy until they see that your doctor has given you a “Clean Bill of Health.” Skin cancers are an exception as long as they have been removed with clean margins.
5.Diagnosis of a terminal illness. Life insurance companies will review your medical records when you apply to make sure you that you have not been diagnosed with any form terminal illness.
I had a client apply the day after they left the ER for chest pains, the life insurance company promptly denied the application within 2 weeks.
6. Ongoing or current or treatments for kidney disease including dialysis, chronic kidney disease or kidney failure and liver diseases like Cirrhosis will also cause your application to be denied. In some situations, if your viral count is very low, Hepatitis C may be insurable.
7. Any diagnosis of any form of congestive heart failure, heart transplant, an implanted cardiac defibrillator, or angina will cause your application to be denied.
8. Any type of serious respiratory conditions, especially for current smokers. Common respiratory conditions that cause an application to be declined include chronic bronchitis, COPD, and Emphysema.
As long as you are in reasonably good health, you should be eligible to purchase life insurance. However - there are some risks, not related to your health, which would cause the life insurance companies to decline your application.
If you partake in any dangerous sports, or if you have a hazardous job that you think may prevent you from being able qualify for fully underwritten life insurance, give us at 855-247-9555 and we'll shop 63 top-rated companies to find your best option.
"If I am in excellent health, are there any other factors that would prevent me from being approved for life insurance?"
Traveling to a “Dangerous” Destination?
When you apply for life insurance, the company will ask about your future and past travel plans. The primary reason for this is that some countries are extremely dangerous to travel to, and life insurance companies do not want to take on the risk.
If you plan to travel or if you have recently traveled to locations listed on the State Department travel warning list, you may have a problem being approved for life insurance. Insurance companies tend to be less lenient when approving life insurance for someone who frequently travels, or plans to travel to, countries with documented political instability or countries that lack reasonable medical care.
Currently some of the locations listed on the State Department list include: North Korea, Iran, parts of West Africa affected by Ebola outbreaks, conflict areas including parts of Ukraine, and conflict areas in Israel including the West Bank and the Gaza Strip. The life insurance companies will consider your last 2 years of travel history when approving your life insurance application.
The good news is that some states have passed regulations that prevent the life insurance companies from looking into your travel plans or history. In the following states, most insurance carriers do not consider past or future travel: CA, CO, CT, FL, GA, IL, MA, MO, NJ, OK, TN, WA.
In LA, MD, and NY, the life insurance carriers can consider your future travel plans, but most will overlook your past travel plans. If you are not sure what company to apply with due to your travels, feel free to call and we can find the best option for you.
Why Does Bankruptcy Affect My Eligibility for Life Insurance?
Most of our potential clients wonder why a life insurance company would need to know about their bankruptcy history. Aside from possibly being inadvertently pulled into a bankruptcy proceeding, some insurers are reluctant to insure someone who may be suffering from situational depression due to a bankruptcy.
When applicants are filing for bankruptcy, the life insurance companies have noticed increased incidences of suicidal gestures and attempts. Because of these statistics, there is usually a waiting period before you can purchase life insurance.
In our industry, chapter 7 and chapter 13 bankruptcies are the most common. With a chapter 7 bankruptcy, all debt is forgiven, and your bankruptcy usually discharged after a few months. If you have filed for Chapter 7 Bankruptcy, you will be eligible for life insurance as soon as the bankruptcy is officially discharged.
Chapter 13 bankruptcies require a repayment plan that is implemented by the court. Once your Chapter 13 bankruptcy is settled and you are making payments, you may be eligible for life insurance. Most life insurance companies like to see at least 12 months of on-time payments, but 18 to 24 months is more preferable.
If you are currently making payments on a Chapter 13 bankruptcy, or if your bankruptcy was not a Chapter 7 or 13, please call to speak with one of our agents to see if you are eligible for coverage.
If your job is considered to be dangerous or hazardous by the insurance companies, it can cause your life insurance application to be declined or it can cause an increase in your premiums.
Some of the occupations that the life insurance companies try to avoid include: High-rise construction laborers, loggers, Swat Team members, structural workers, oil rig workers, and pilots of experimental aircraft. In addition, an occupation can be considered dangerous due to its location.
If your occupation requires travel to politically-sensitive countries, it could prevent your application from being approved. We recently worked with a pastor who traveled to “dangerous” countries for missionary work.
Like Canadian Reverend Hyeon Soo Lim, who was detained in North Korea for distributing religious materials, our client also travels to countries that are not too keen on "outsiders" sharing their religious beliefs.
After some digging, we were able to find an insurer that would offer this client a policy. Even though he was in excellent health, our client was approved at an average rate class due to the risk associated with his travel to countries that are listed on the State Department's travel warning list.
If you are unsure as to whether or not your occupation is considered hazardous, please call to speak with one of our experts who will provide you with the best options available. Toll free at 855-247-9555.
Life insurance companies also ask their applicants for information about any potentially dangerous hobbies that they may have. For most people this isn't an issue, but some hobbies could actually prevent your application from getting approved.
Some of the hobbies that may cause your life insurance application to be denied include: bungee jumping, salvage or cave diving, mountain climbing, skydiving, base jumping, hang-gliding, and motorcycle racing.
If you scuba-dived once on your Honey Moon, and you no longer plan to continue, the insurance company will probably overlook your history of diving. However, if you're an avid scuba diver that dives alone, dives in caves, or if you engage in wreck or salvage diving, almost every life insurance company will decline your application.
For some people with dangerous hobbies, the life insurance companies will approve the application with a “flat-extra". A flat extra is an additional fee that is charged in addition to the regular cost of the insurance policy to offset the above-average risk that the applicant presents to the insurance carrier.
If you indicate dangerous or hazardous hobbies on your application, the insurance company will ask you additional details on an avocation questionnaire. This questionnaire is used to determine the level of risk your hobby presents. After reviewing your answers, your application can either be declined, approved, or approved at a more expensive rate.
It's important to note that some companies are more lenient with specific hobbies than others. For example, one company we represent charges a higher rate to scuba divers that dive deeper than 50 feet, while another company we represent still offer their best rates to divers who dive up to 100 feet. These variations also exist with pilots, rock climbers, etc.
Depending on your situation, it may also be advisable to sign an exclusion for your hobby. A very common exclusion in the life insurance industry is an aviation exclusion. If you have a pilot's license but no longer fly, or if you're a private pilot who has a separate life insurance policy that only protects you while you're flying, we recommend signing an aviation exclusion.
An aviation exclusion basically states that your life insurance will cover any form of death unless you pass away while flying your own airplane. If you sign an aviation exclusion, your policy will still protect you if you pass away in an airplane accident as long as you are not piloting the airplane.
In most situations, aviation exclusions are not common. If you're a commercial pilot with regularly scheduled flights, your occupation shouldn't affect your rates. The same is true for most of the instrument-rated private pilots that we work with too. However, the life insurance companies are not as lenient with applicants who have sporadic flight schedules.
Driving records usually won't impact an application for life insurance, but if you have multiple infractions or a DUI/DWI, it can present a challenge when getting approved.
Some life insurance companies are much more lenient with driving records than others but, as a general rule of thumb, a DUI/DWI within the last 2 years is an automatic decline with 95% of life insurance companies.
A few of the companies we represent will approve an applicant with a DUI more than 12 months ago, but the rates for the policy are going to be approximately 50% more than someone in average or better health. If your DUI was within the last 12 months, unfortunately, we are unaware of any companies that can help.
Generally, if you have been convicted of 2 DUI’s within the last 5 years, or more than 3 DUI’s in your lifetime, fully underwritten insurance is not available to you, but if you're over the age of 50, you may qualify for guaranteed issue insurance.
If you have multiple moving violations, you may also be approved at a more expensive rate class. Typically, most companies will allow 3-5 tickets within the last 3 years before they charge higher rate, but if you have multiple tickets or charges like reckless driving on your driving record within the last 3-5 years, you could see a higher premium.
Each company has its own scale for what they consider to be an “at-risk” driver, if you are not sure how many moving violations you have had in the last year, it may help to obtain a copy of your driving records prior to applying if you believe you have more than 5 moving violations in the last 3 years.
If your driving record prevents you from being able to obtain auto insurance, it may be impossible to find life insurance. However, there are always exceptions to this general rule of thumb - here's an example:
Last year, our agency was able to help an executive, Fred, who traveled hundreds of miles each week for his job. Fred had so many tickets that he no longer had a driver’s license, as it had been revoked by the courts. Luckily, he found us online after being declined by a few local agents.
When we submitted Fred’s application, the main concern the underwriter had was whether or not our client was still driving on a revoked license. Our client submitted a cover letter explain that he no longer drives and has a driver he used when he needs to travel. After reviewing his cover letter, the underwriter was able to approve the policy.
Life insurance companies will review your criminal records prior to approving your application for coverage. Unfortunately, if you are currently on probation, parole, we will not be able to offer you a fully-underwritten life insurance policy.
The insurance companies we represent will review your criminal records and automatically decline your application until you have completed probation. However, you may be able to apply for up to $25,000 of guaranteed issue life insurance if you are 50 or older.
In general, misdemeanors are not much of a concern to most life insurance companies, but felonies are looked at very closely. In most cases,people who have been charged with a felony in the last five years are not eligible for traditional life insurance.
After 5 years, you may be eligible for traditional term or universal life insurance, but if your charges include any type of fraud, or if you were convicted of a violent crime, your application could be denied for up to ten years after you've completed probation.
A life insurance policy for $2,000,000 to $5,000,000 of coverage if a huge financial liability for a life insurance company, and they will not offer this much coverage to someone who may have to serve time. Just like some travel destinations, life insurance companies consider jail to be a “very dangerous” place.
Active Military and Armed Forces
If you are an active member of the military or the armed forces, you may have a very difficult time securing life insurance, especially if you are scheduled for deployment. Unfortunately, most life insurance companies will automatically decline an application for someone that is active in any branch of the Armed Forces, but we can usually help.
With over 50 top-rated companies under our belt, we are able to offer competitive rates for active members of the military and the armed forces, even if you are scheduled for deployment. Do not delay though, life insurance can take up to two months to get approved, and you must sign your policy while in the United States for it to be active.
We always advise our clients to start the process sooner than later, especially if you have an immediate need for coverage. In addition, you will want to make sure your policy is active and set up for automatic drafts so you do not lose coverage if you are deployed abroad.
Call to Speak With An Expert
Not sure where to begin? Call us today and one of our expert agents will shop over 50 top-rated life insurance companies to find the lowest priced policy available to you in the Nation.
Our agents do not have quotas, we offer a no-pressure, consultative approach to life insurance. Our clients say it the best, please click here to read our client testimonials or give us a call today to compare your options, toll-free 855-247-9555.
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.
Expert reviewed by:
Louis Lopes, CLU ChFC
Chartered Life Underwriter, Licensed Life and Health Agent
Louis has been in the insurance business for over 30 years. He specializes in “high risk” cases as well as more complex coverages for long term care, disability, and estate planning.