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Why does the insurance company want to know my financial information for life insurance?
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What type of financial information are they asking for?Steve
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net worth is a factor...
if you are worth only 200k or so, and take out a $50 M policy, that is different than same person worth 200k and taking out a $500k policy.Comment
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Insurance companies want to know your net worth to determine if you're taking on enough coverage. They also want to know how much income you take in so they can determine your risk of not paying your premium. Insurance companies are crazy when it comes to statistics and risk of non-payment will factor in to premium computation. They have to do this because a large number of people not paying premiums at one time could negatively effect their solvency.Check out my new website at www.payczech.com !Comment
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Why because of "insurable interest".
You have to prove to the insurance company that you need the insurance, and also that you can pay for the insurance.
Because from the insurer's perspective if you only make 50K per year, and want a 5 million dollar, UL or even term policy that sends up warning flags.
Insurers might think the policy "UL" especially is investor owned or for another purpose besides insuring you. They dont want that because it will lose them money.Comment
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So they can set your policy limits based on disposable income and debt/worth. It also gives them a feel for your creditworthiness.Comment
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