Not sure how much term life insurance you qualify for? Use this.
Your Life Insurance Need
Just like your current health is a big part of life insurance underwriting, so is your financial situation. You must qualify financially for the amount of coverage you are requesting.
These are some factors life insurance companies consider when financially underwriting your application:
Reason for the insurance
How the amount of coverage was determined
Total amount of life insurance you have with all companies
Any pending applications with other companies
Any life insurance policies to be replaced
Total amount of life insurance you intend to keep
Reasons for any unusual owner or beneficiary designations
Life insurance companies may require any of the following financial information to justify the amount of coverage they will allow:
Annual earned income
Annual unearned income from investments
Total net worth
Amount of coverage your spouse has
Business financial documents (usually for business-related coverage)
Documentation for any other unique financial circumstances
Your annual income provides the basis for your insurance need. All companies use a multiple of your income to help determine your insurance need. If your request falls outside these guidelines, the company will turn to other financial information to help determine the need.
Here's an example of an insurance company's income guidelines.