Why Do I Need to Disclose My Income on the Application?
Your current and past health aren’t the only parameters the carrier uses to evaluate your application for life insurance. Moreover, since life insurance is meant to protect financial devastation to your heirs, the insurance company needs to make sure you are not over-insuring yourself and that the payment is within your means.
If you make 20K per year and want to purchase a 20-million-dollar insurance where the premium is so high, you can’t afford it, this will trigger a red flag, and you most likely will not be approved for coverage. Lastly, any amount you choose to buy, you must justify it through income or assets that you are trying to protect.