How to calculate Human Life Valuation in LIfe insurance?

Question

When an Individual is ready to take the insurance policy, each person's Insurance capacity will be decided by the company. But How do they assess the valuation of an individual? what are the parameters they are following? How they calculate the valuation of an Individual?

Answer 1

The individual applying for coverage decides how much insurance they want not the carrier. Usually anywhere from 8- 20 times annual salary. If you get carried a way and ask for too much insurance the carrier may want more information as to why you asked for such a high amount. They may want to know about your assets and liabilities. If you are single and have more assets than liabilities and have no children and you ask for a 5 million dollar policy they might want to know more.