Part of our guide: Impaired Risk Life Insurance Underwriting by Condition →
Picture this application: a 35-year-old woman, retired, no income listed, net worth blank, applying for $8 million of term with no stated purpose. Any underwriter would stop and ask why.
Key takeaways
- Large face amounts need a clear financial justification, especially when income or net worth isn’t obvious.
- In this case the client had just inherited a large estate and needed coverage for estate taxes, which fully justified $8 million.
- The five key questions: purpose, how the amount was set, owner and payer, total coverage in force, and supporting documents.
Retired at 35, no income, $8 million of coverage. Without an explanation it looks alarming. With one — a large inheritance and estate taxes — it’s justified.
The case
- Female, age 35, listed as retired with no annual income
- Net worth left blank
- Applying for $8 million of term coverage, purpose left blank
The explanation was simple: she had just inherited a very large estate and left her job, and estate taxes were a concern. Based on the inheritance, $8 million was justified. The application just didn’t say so.
The five questions underwriters will ask
- What is the purpose of the insurance?
- How was the face amount determined?
- Who is the policyowner and premium payer?
- How much coverage is in force and applied for?
- What documentation supports the amount?
Put the answers in a cover letter
Answering these up front, usually in a short cover letter, prevents weeks of back-and-forth. We can write the letter for you, but the most important source of information is you, since you know the client.
Frequently asked questions
What is financial justification in life insurance?
Evidence that the amount of coverage applied for is reasonable given the client’s income, net worth, and the purpose of the insurance.
Can someone with no income get a large life insurance policy?
Yes, if there’s another justification, such as a large estate, inheritance, or business interest. The purpose needs to be clearly explained.
How can I speed up approval on a large case?
Provide the purpose, how the amount was set, ownership details, existing coverage, and supporting documents with the application.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
Connect on LinkedIn →We’re Here to Help
Have a question about what you just read, or a case you’re working on? Tell us a bit about what you need, and a member of the SRS team will follow up with you personally — no obligation, no hassle.
