Jun had not considered a financial safety net beyond their savings until that point. However, while his friend was recuperating, the wheels began to turn.

"It made me think: That could happen to anyone. What happens next? "I began reading articles and talking to people, and I decided it was time to look into life insurance," Jun says.

His objective? To purchase a policy that would cover at least a year's worth of personal and business expenses, as well as provide long-term care for his mother-in-law.

After doing the math, he and his wife bought two million-dollar 30-year life insurance policies, one for each of them.

Crunching the numbers

"You don't have to be a millionaire to get a million-dollar policy," says John Carroll, senior vice president of LIMRA, a trade group for life insurance.

Life insurance is intended to relieve your loved ones' financial burden if you die. They can use the money to pay for your funeral and burial expenses, as well as daily living expenses like groceries, child care, and rent. A life insurance payout can also assist your family in paying for college or, in Jun's case, caring for aging parents.

When you consider everything you pay for now and everything you expect to pay for in the future, a million dollars in life insurance may not appear to be much.

Carroll suggests multiplying your annual salary by 10 to determine how much life insurance you need, then purchasing a policy to match.

So, if you make $100,000 per year, you may be eligible for a $1 million life insurance policy.

However, salary is not always a complete picture. You can also use the DIME method (Debt, Income, Mortgage, and Education) to determine whether you need a million-dollar policy. Compile the following:

• Debt. You owe money, such as student loans and credit cards.
• Income. Consider how many more years you will have financial dependents on your income, and then multiply that number by your salary. If you have toddlers, for example, you'll probably want enough life insurance to cover them until they reach college age.
• Mortgage. The remaining balance on your mortgage, if any.
• Education. The funds required to pay for your children's schooling.

Subtract any savings and liquid assets from the total cost. The result is the face amount of life insurance that you might require.

The million-dollar question (pun intended)

According to LIMRA, 20% of term life insurance policies sold in the United States in 2020 were worth at least $1 million.

It's a popular choice that's also reasonably priced.

The cost of a $1 million life insurance policy, like any other amount of coverage, is determined by a variety of factors such as your age, gender, health, hobbies, occupation, and smoking status.

Consider a nonsmoker's 20-year term life insurance policy. According to Quotacy, an online life insurance brokerage, a 30-year-old man in good health can expect to pay $365 per year for a million-dollar policy. That works out to a little more than $30 per month.

The average cost for a woman of the same age is $292 per year, or about $24 per month.

Compare life insurance quotes from several companies to get the best deal.

Applying for a million-dollar life insurance policy

When you apply for life insurance, the insurer will ask you if you need this much coverage.

As part of the application process, insurers typically request proof of income. Most employers will provide you with coverage worth up to 30 times your annual salary.

If you want to buy a policy worth $1 million or more, you may need to answer a few more questions about your financial situation.

"They want to ensure that you can afford the premiums," Carroll explains. "It does no one any good if a policy expires."