Recently I’ve been receiving more and more inquires for larger policies, specifically for a $10 million policy. While this sounds like and is a lot of money, for many this is the policy that is needed to protect their estate or business.
Is getting a $10 million policy difficult to obtain?
As with any type of insurance, the more risk the insurance company is exposed to the more prudence the companies will show in regards to underwriting. The good news is, if the coverage amount can be justified to the underwriter than getting approved for the $10 million policy can be a streamlined process if you work with an experienced agent.
How much will the policy cost?
A 40-year old male, great health, preferred plus rate class, $10,000,000 on a 10-year level term=$257.52 month.
A 40-year old male, great health, preferred plus rate class, $10,000,000 on a 15-year level term=$318.42 month.
A 40-year old male, great health, preferred plus rate class, $10,000,000 on a 20-year level term=$501.12 month.
A 40-year old male, great health, preferred plus rate class, $10,000,000 on a 30-year level term=$962.22 month.
A 40-year old male, great health, preferred plus rate class, $10,000,000 on permanent no-lapse guarantee universal policy to age 121=$4,133.83 month.
What about taxes?
Life insurance is still fortunately one of the last few financial products that are not subject to federal income tax. Life insurance is however included as part of the estate of the deceased if the deceased was the owner of the policy at the time of death. The American Taxpayer Relief Act of 2012, enacted on January 2, 2013 permanently maintains the $5 million estate tax exclusion amount. This also allows a dying person to transfer up to $5.25 million or $10.5 million for a married couple, at death without paying estate tax. You would want to consult with your tax or legal counsel as far as the best way to structure your policy.
You should not have a problem in securing a $10,000,000 policy with a highly rated insurer, as long as you can justify to the insurance company why you need the coverage. Every company is going to have their own specific underwriting requirements for a $10 million policy, so choosing the company with not only the lowest rate but with also with the most favorable underwriting guidelines that will fit your situation is going to be imperative. If you have any questions on choosing the right company for you, do not hesitate to ask.
*Rates as of 2/21/2013. The information in this post is for informational purposes only and is not a guarantee of rates and insurability. Rates and eligibly are subject to the underwriting guidelines of the insurance companies and state in which you live.