5 Million Dollar Life Insurance Policy: Everything You Need To Know

A 5 million life insurance policy is seen by many as the gold standard in coverage. For ultra-high-net-worth individuals who want to ensure their loved ones are financially cared for regardless of what may happen, 5 million in death benefits provides substantial funds that can support a partner or children for decades to come. But a policy of this size also comes with unique considerations around costs, finding the right kind of coverage, and qualifying for preferred rates. Understanding the details and fine print is key before committing to such a significant investment.

This article will explain everything you need to know if you are weighing whether a 5 million policy is right for your situation.

How Does a 5 Million Dollar Life Insurance Policy Work?

A 5 million life insurance policy provides your family with a large payout if you pass away. Life insurance gives financial protection to your loved ones if something unexpected happens to you.

Here’s a simple explanation of how it works:

You pay premiums (regular payments) to the life insurance company. In return, they provide a policy with 5 million in coverage. When you pass away someday in the future, your beneficiaries will receive 5 million.

You may be wondering exactly what beneficiaries are. These are people you choose – usually family members like a spouse, kids, or parents who will receive the insurance payout if you pass away.

So essentially, a 5 million policy gives you peace of mind. If you die early, your family will have significant money to cover things like daily expenses, college tuition, mortgage payments, or other needs. The large payout is a financial safety net, providing security even when you’re no longer around.

Who Is a Candidate For a 5 Million Dollar Life Insurance Policy?

Not everyone could qualify for such a large life insurance policy. Here are the factors you should consider to determine if a 5 million dollar life insurance policy is right for you:

People With a High Net Worth

You need to be able to make a lot of money in order to qualify for such an expensive life insurance policy. But if you can, then you should consider it.

Business Owners

If you’re someone who has a business or is a business partner, then you should consider getting a 5 million dollar policy in order to cover things like business debts, buy-sell agreements and also be able to provide liquidity for the business upon your death. This is because in most cases, your kids taking over your business may not work out.

People With Significant Financial Obligations

If you’re someone who has a large mortgage, expensive business loans, or large personal debts, you may want to consider a 5 million dollar policy. In the event of your passing, this kind of policy can help pay off these debts and ensure that your family doesn’t have to pay them.

What Are The Requirements To Qualify For a 5 Million Dollar Life Insurance Policy?

To acquire such a high life insurance policy, you will typically have to meet certain requirements such as:

A Medical Exam

You’re almost guaranteed to have to take a medical exam if you want to obtain a 5 million dollar life insurance policy.

Income Multipliers

How much life insurance you can get depends partly on your income. Insurance companies use “multipliers” based on your income when deciding coverage amounts.

If you’re young, you might get approved for a death benefit 30 times your salary. So if you make $100,000 per year, you could potentially get a 3 million policy.

As you get older, the multiplier goes down. Someone age 60 applying for life insurance might only get a policy worth ten times their income. For that same 100,000 salary, the death benefit would be 1 million.

Multipliers could vary based on the insurance company you’re working with and can also rely on different factors like net worth, liabilities, and more.

You Need To Justify The Need Financially

Insurance companies won’t just approve you for a massive 5 million policy – they expect you to justify why you need that level of coverage.

When applying, be prepared to share your total income, expenses, debts, assets, and dependents to prove the purpose behind such a large payout amount.

What Types Of Life Insurance Policies Can You Get With 5 Million Dollar Coverage? (Is It Limited To Certain Types?)

As long as you can afford the premiums, you’ll be able to get 5 Million Dollar Life Insurance Coverage in any type of life insurance policy. Here are some popular options:

Term Life Insurance

One of the most affordable life insurance policies, term life insurance provides coverage for a specific period of time, usually 10-30 years. If you pass away during the term, your beneficiaries will receive the 5 million dollar payout.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance that provides coverage for your entire lifetime. It also has a cash value component, which can grow over time and be used as an investment or to pay premiums.

Universal Life Insurance

Universal life insurance is another type of permanent life insurance that offers flexibility in terms of premiums and death benefits. It also has a cash value component, providing a way to save and invest within the policy.

Variable Life Insurance

Variable life insurance is similar to universal life insurance but allows for investment in various types of funds, such as stocks and bonds. This can potentially increase the cash value component of the policy but also carries more risk.

How About No Exam Policies With 5 Million Dollar Coverage?

The availability of a 5 million dollar no-exam policy is limited and would be pretty hard to find. No exam policies are typically offered for smaller coverage amounts as they are considered higher risk by insurance companies. Not only that, but the premiums of a no-exam policy can also be much more expensive than traditional policies.

How Much Does a 5 Million Dollar Life Insurance Policy Cost?

It’s hard to say due to the fact that there are many different variables that go into the cost of a life insurance policy. These variables include.

The Type Of Policy You Choose

As we mentioned above, there are a couple of different types of life insurance policies. Depending on which one you choose, your cost will fluctuate.


Naturally, as you get older, the costs of life insurance policies get higher. Therefore, the younger you are when you secure your policy, the better.

Your Health Status

Whether you are healthy or have medical conditions affects your premium cost. Life insurance companies will check your health first before selling you a policy.

They want to understand your risk level – meaning, how long are you expected to live? This helps them set fair premium prices.

To check your health, the insurance company will likely ask you to take a medical exam. Things like your cholesterol, blood pressure, and family history get reviewed.

If you are in excellent health, with no major conditions, you can qualify for lower premiums. But if you have pre-existing illnesses like heart disease or cancer, your premiums will be much higher because those health issues increase risk.

Your Lifestyle

They’ll also see how healthy or unhealthy your lifestyle is. If you’re someone who exercises on a regular basis, has a good diet, and doesn’t smoke or drink alcohol excessively, you’ll get better rates.

However, we managed to get some numbers from the good financial cents blog, and here is an example of hour prices could fluctuate:

Below is a simplified example chart that provides a rough estimate of monthly premiums for a 5 million policy. These estimates are for illustrative purposes only and can vary widely in reality.

Term Life Insurance (20-Year Term)

AgeMonthly Premium Estimate
30$200 – $300
40$300 – $400
50$600 – $800
60$1,500 – $2,000

Universal Life Insurance

Universal life insurance premiums can be more complex due to the flexible nature of the policy, which includes a savings component that can grow over time. The costs provided below are for the insurance part of the policy to maintain the 5 million death benefit and do not account for additional savings contributions that could increase the cash value.

AgeMonthly Premium Estimate
30$500 – $700
40$700 – $900
50$1,000 – $1,300
60$2,000 – $2,500

Key Points to Remember:

  • Term Life Insurance is generally less expensive than universal life insurance because it offers a death benefit without a savings component and only covers the insured for a specific term.
  • Universal Life Insurance offers more flexibility, including the ability to adjust premiums and the death benefit, but is more expensive due to the cash value component.
  • Health Rating: The estimates assume the individual is in good health. Premiums will be higher for those in poorer health or with pre-existing conditions.
  • Lifestyle and Occupation: High-risk lifestyles or occupations can significantly increase premiums.
  • Gender: Typically, females might see slightly lower premiums than males, due to longer life expectancy.
  • Underwriting: These estimates are before any underwriting process. The actual premium could be higher or lower based on the insurer’s underwriting criteria.

Work With Us To Get The Best Quote Possible

As you can see from the many different aspects of getting a 5 Million Dollar policy, you have to worry about many different things.

Trying to do this by yourself could not only be extremely overwhelming, but you could also end up with a policy that isn’t exactly right for you.

Liberty Financial Group

At Liberty Financial Group, we take pride in allowing you to find the best policy for you, and that includes a 5 Million Dollar policy.

We are able to do this because we are partnered with over 50 of the most trusted life insurance companies in the industry. This allows us to quickly compare pricing, which is something that would take ages if you were doing it on your own.

Not only do we get you the best price/policy, but we also educate you about it. This way you could have a clear idea of what you are getting into and can make an informed decision.

If you want to work with us in order to get your 5 million dollar insurance policy, all you have to do is submit a request for a quote here, and we will get back to you very shortly.