Why I Took Out Over $1 Million of Life Insurance on Myself AND My Wife

does my spouse need more than $1,000,000 in life insuranceBefore having our first child, my spouse and I decided to purchase a life insurance policy for one another.

We bought more than 1 million in life insurance each because, if something happens to either or us, we don’t want our loved ones to struggle.

Buying coverage also ensured both of us that our surviving family would be able to keep the house if one of us died before the mortgage was paid off.

We decided on a 30-year term life insurance policy because it provides the most coverage for the least amount of money. This insider’s guide will tell you how to select the best policy for your needs, or you can compare rates from dozens of providers with our free calculator.

Quick Article Guide

1. Why We Purchased More than a Million Dollars in Coverage
2. Determining the Amount of Life Insurance You Need
3. Calculating Your Spouse’s Need for Life Insurance
4. Selecting the Right Policy Length or Term
5. How to Purchase a $1,000,000 or more in Life Insurance
6. What’s the Cost of A Million Dollars in Coverage?

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Why We Bought more than 1 Million in Life Insurance Each

Most life insurance agents will recommend purchasing 5 to 10 times your annual income in coverage. While this is a great rule of thumb for most people, it was not enough for our situation. My wife an I rely heavily on each-others income and help around the home.

There are more than 20 years left on our mortgage and we have two little ones that will need financial support until they graduate from college. Income aside, the pandemic has also taught me that it is impossible for me to do my job without my partner’s help.

We bought more than 1 million in life insurance each because we wanted to provide one another with at least twenty years of income. This will provide each of us with enough to support the household until our children have moved out and the mortgage is paid off.

As we age, and are more likely to develop health issues, the cost of life insurance only increases. Locking in our coverage when we were younger saved us a considerable amount of money, but not everyone needs a policy for more than a million dollars.

Determine if $1 Million is Suitable for Your Life Insurance Needs

For us, purchasing more than $1 million made sense. But that might not be the case for other families. They may not need as much or, in some instances, they may need more. As a general rule of thumb, consider the number of years until you plan to retire. It’s also wise to account for:

  • Child care
  • Dependent expenses
  • Mortgages or other property debt
  • Revolving debt balances
  • Cost of health care for a spouse that doesn’t work
  • Funeral costs
  • Higher education expenses if you plan to pay for them

After calculating your life insurance need, you may determine that $1 million is the perfect amount for your family. You also may determine that you don’t need this amount of coverage but want to lock in a rate early on so you can provide adequate protection for your family.

You can use our JRC Life Insurance Calculator to estimate your insurance need. If you already know how much coverage you need, our instant quote will help you compare rates and policies from more than 50 life insurance providers before speaking with an agent.

Get your FREE quote online in less than a minute

Assess How Much Insurance You Need for Your Spouse

If you or your spouse is a stay-at-home parent or doesn’t earn an income, it might be more challenging to determine the amount of coverage you need since they don’t directly earn a salary. However, their contribution to the household may be more service-based.

For example, if your spouse stays at home to raise your children, you’ll want to account for the cost to raise your children in their absence. These costs could include daycare expenses, after school care, or a nanny. You should also consider if you’ll be able to continue working full-time in their absence.

Since running a household and taking care of children is a full-time job in itself, you may have to cut back on your working hours to take on some of the burdens. Another thing worth considering if your spouse does earn an income is whether your standard of living would change if you no longer had the additional cash flow.

If you determine you both need roughly $1 million of coverage, most companies will offer up to $1 million to a non-income earning spouse if their working spouse has the same amount of coverage or more.

Choosing the Right Term Length

When it came to deciding the type of life insurance we needed, we had plenty of options. For most people in our situation, a term policy is the best choice. With term life insurance, you can select the period of time you receive coverage (5, 10, 15, 20, 25, 30, or even 40 years).

For example, if you want coverage until your children go to college, you may only need a 20-year policy.

Generally, the longer term you select, the more the policy will cost. But, if you select a policy that expires and you determine you still need coverage, a new policy may be more expensive since you’re older and your health condition may have changed.

For us, it came down to the coverage we needed, predictability, and affordability. We wanted a policy where we knew exactly what we were getting and fit within our budget.

If you need help determining the right term length for your situation, our experts are here to help. By working with dozens of providers, we’re able to shop the market on your behalf, saving you valuable time and money.

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How to Buy a $1 Million Policy

If you’re like us and decide a $1 million policy makes sense for your financial needs, it’s crucial to find an insurance company that is around to pay out your death benefit in the event of the worst-case scenario. So, to identify an insurance company you’re confident in, you should check out the life insurance rating of each insurer you’re considering.

Independent rating agencies provide ratings based on the company’s financial strength or ability to pay a claim. In other words, these ratings demonstrate to consumers that if they were to die, the insurance company is likely to pay out the claim. To check the ratings, you can look at rating sites such as Standard & Poor’s and A.M. Best.

Once you narrow down your search to a few companies, you’ll want to get several quotes. Thanks to advancements in technology, many life insurance companies make applying for coverage and getting quotes more painless than ever. You can simply calculate your life insurance needs, get a quote, and apply online. If you’re approved, you may be able to start your coverage on the same day.

Some online applications may ask you about your income, your need for life insurance, and your health. It’s wise to answer each question as honestly as possible to receive an accurate quote. Depending on your age, some insurance companies may also require a medical exam for final approval.

Our independent agency only represents “A” or better rated life insurance providers that have never failed to pay a valid claim. We also work with companies that can offer as much as $5,000,000 in coverage without a medical exam.

$1 Million Policy Cost

It may come as a surprise that $1 million coverage is more affordable than you may anticipate. In fact, for a healthy 35-year-old male, a $1 million 20-year term policy could cost $35 per month. That’s a little over $1 per day for coverage.

Again, the healthier and younger you are, the more affordable your coverage will be. Therefore, if you think you may need coverage at any point throughout your life, it’s wise to purchase a policy now so you can lock in your rate.

But, keep in mind, every life insurance company sets its own rates and underwriting guidelines. This can make it very difficult to determine your best option if you are solely getting quotes online. Our expert licensed agents with multiple years of experience are here to help.

We’ll be able to compare your options quickly by asking only a few questions about your health, saving you time and money. Our comparative shopping services are free, and even if you’re in excellent health, we may be able to save you more than 30% on the cost of your life insurance.

We’re owner-operated, and our agents do not have quotas or daily sales goals, so you never feel pressured to make a rushed decision you haven’t had a chance to mull over.

Our goal is to help you make an informed decision and provide you with the best customer service in the industry. So, in the end, you can feel confident in the steps you took and feel safe knowing you’ve protected the ones you care about most.

Give us a call today, toll-free at 855-247-9555, or you can compare rates and coverage options with the instant quote form below. Our shopping services are always free, and we’re licensed in all 50 states.

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Cliff Pendell

VP of Marketing at JRC Insurance Group
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.
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