When you’re looking for life insurance, factors such as age and pre-existing health conditions can have an impact on your premiums. However, few policy seekers are aware that personal income can also affect your coverage terms. Use the following guide to determine why your finances are considered.

Why Do Providers Care About Your Income?

Life insurance policies are designed to protect dependents. For example, if you bring in a yearly salary to support your spouse and children, your sudden passing would leave them without a stable source of income. A life insurance policy provides a payout to take care of their necessities. Therefore, if you don’t have any income, the provider might turn you down. 

How Does Income Affect Life Insurance?

Your income level will also affect the amount of coverage you receive. Insurers will use an income replacement table to determine the payout your policy provides. Your age will also factor into the equation. 

Younger policyholders receive higher payouts since their families are likely to need assistance for longer. For example, a policyholder under the age of 30 might receive 30 times their income in coverage. However, a policyholder between the ages of 51 and 60 might receive 15 times their income in coverage.

How Can You Get the Coverage You Need?

You can explain your needs to the agent and find out how much coverage you’ll be entitled to beforehand. The age and needs of your dependents will be taken into account, so you can ensure that the policy is worth the investment. You can also improve your chances of getting additional coverage by making healthy lifestyle choices, such as quitting smoking, staying in shape, and avoiding traffic tickets and car accidents. 

If you need a life insurance policy, turn to Shelly Hood at State Farm® in Omaha, NE. Shelly is proud to help clients find personalized, affordable insurance policies. She also assists with health and auto insurance. Call (402) 401-6216 today to schedule a consultation.