Which of these factors is NOT taken into account when determining an applicant's life insurance needs?

• A. Age
• B. Occupation
• C. Medical history
• D. Automobile

Answer: (D)

Life insurance needs are calculated by looking at the money your family would need to replace after your death—income to replace, debts to pay off, final expenses, education costs, and ongoing obligations for a number of years. Age matters because it affects how long that replacement income is needed. Occupation matters because it relates to how much income you currently earn and can influence risk and affordability considerations. Medical history matters because it can change life expectancy and insurability, which in turn affects the amount that is reasonable and affordable to cover. Owning an automobile, however, does not create a future financial obligation that must be funded by a life policy. It’s not part of the needs calculation, so automobile is not taken into account when determining life insurance needs.