Life Insurance...Max?

Apr 9, 2007

  1. Krono
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    Krono Super Genius

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    I have a client that wants to get as much insurance as a company will give her...is there a limit as to how much a company will issue? She earns about 75k/year, and wants at least a mil in life...is that a problem?

    She sez her father would like to get more as well, but his current agent said he is maxxed out...does this make sense?

    Thanks.
     
    Krono, Apr 9, 2007
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  2. djs
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    djs Super Moderator Moderator

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    Financial underwriting is a HUGE portion of underwriting life policies. Why does someone need that much life insurance? Each company tends to have guidelines such as a 25 year old can have 25 times their annual income. Somebody 50 years old, 10 times their average annual income.

    In my experience, anything over a million dollars requires some additional forms, though usually isn't a problem, if it is to cover a true need.

    Yes, agents will oversell life insurance. Check with the company you write with to see what their financial underwriting guidelines are.

    Dan
     
    djs, Apr 9, 2007
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  3. James
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    James Guru

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    If all clients were like this I would be in heaven!;)
     
    James, Apr 9, 2007
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  4. LaffAgent
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    LaffAgent Expert

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    I will second Dan's information. The UW will have guidelines. You can usually exceed those guidelines if there is financial justification to do so. You need to make your case to the UW and usually they won't accpet "because she wants that much".

    Considerations: How old is she? Children? How many? Any with special needs? Debt? Does she stand to see a good increase in her income over the next few years?

    Usually, if you can explain why it's a reasonable number, you can get it. Give the UW as much info as possible.
     
  5. NHB_MMA
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    NHB_MMA Guru

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    There is no limit on how much I can write, although a policy of over 25M needs to be signed off on by the CEO and I doubt that has happened very often. Yet, all companies will look at the financial information and throw up a red flag if things are excessive.
     
    NHB_MMA, Apr 10, 2007
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  6. Crabcake Johnny
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    Crabcake Johnny Guru

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    Would there be anything stopping someone from getting 10 one million dollar policies through 10 different life companies?
     
  7. LaffAgent
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    LaffAgent Expert

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    The insurance companies are all looking at, and reporting to, the MIB. The UW is going to see all the activity and the red flag is going to come up.
     
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