Quora Answer: What is the Income Asked, When Buying Term Insurance, if the Policy Owner Changes Jobs?

The following is my answer to a Quora question: “While buying term insurance, yearly income is asked.  But if someone leaves that job to start a business, and dies during this period, will the insurance company check the bank statement of the insured person before settlement?”

Your annual income is required because the underwriting process requires the insurer to ascertain that you can afford the premiums of the policy.  Once the policy is incepted, your change in income is irrelevant.  Your change in occupation from a less risky one to a more risky one might vary the coverage, however.  For example, if you left your job as an office manager, and became a travelling salesman in the Amazon to sell condoms made from poisonous pitcher plants, for your own business.

If, in the course of this new job, or business, you pass away, the claim process is as per normal, requiring the death certificate to prove death.  In the event of an accidental death claim, this will likely require a coroner’s report.  In this entire process, your bank statement is irrelevant.  Bank statements are only subject to interest if there is reasonable cause to believe that there is fraud.  The insurer themselves may not request your bank statement due to banking secrecy laws.  This will be requested by the police.