At $300k+, the problem is not whether you can afford coverage. It is the ceiling on how much a carrier will issue you.
If you earn $300,000 or more in Dallas, your life insurance problem is not the one most articles describe. You are not wondering whether you can afford coverage. You are running into a ceiling on how much a carrier will issue, discovering your group policy caps out at a fraction of your income, and finding that bonus and equity compensation get counted differently than salary. Here is what actually applies at this income level.
Life insurance exists to replace future earnings, not to create a windfall. So carriers apply financial underwriting and cap coverage at an age-based multiple of income. The multiple falls as you age, because there are fewer earning years left to replace.
General industry guidance, not any specific carrier's guidelines. Guardian publishes a similar age-based scale; Securian states it will consider face amounts up to 18 times income. Multiples vary by carrier, purpose, and case, and are applied at the underwriter's discretion.
This is where high earners get surprised, because compensation at this level is rarely a single number.
Practical consequence: bring three years of tax returns and a clean summary of your equity compensation to the first conversation. Applying with a single pay stub against a $6M request is how files stall.
Employer group life is typically one to two times salary and carries a hard dollar cap - frequently somewhere between $500,000 and $1 million regardless of what you earn.
For someone earning $400,000, a $500,000 cap is barely more than a single year of income. And group coverage generally ends when the job does, which is a live issue for professionals who move firms, make partner, or go independent. Your insurability is an asset; tying it to an employer means it is not fully yours.
Large policies take longer than people plan for. Up to roughly $5 million on a healthy applicant under 60 commonly runs 30 to 60 days. Above $10 million, expect 60 to 120 days, and cases spread across several carriers can take longer still. Financial underwriting adds document requests on top of medical.
If a partnership agreement, loan closing, or divorce decree sets a date, start months ahead. Our timelines guide covers what actually causes delays.
Carriers cap coverage using age-based multiples of income, because the policy is meant to replace future earnings rather than create a windfall. Industry guidance commonly runs around 30 times income in your 30s, roughly 20 times in your 40s, about 15 times in your 50s, and closer to 10 times in your 60s. Guardian publishes a similar scale, and Securian states it will consider face amounts up to 18 times income. The multiple falls with age because there are fewer earning years left to replace. Guidelines vary by carrier and are applied case by case.
Usually yes, though carriers treat components differently. Base salary is straightforward. Bonuses and commissions are typically averaged over two to three years rather than taken at the most recent peak. Restricted stock and equity compensation are often counted when there is a consistent vesting history, and less readily when a grant is new or one-time. Passive income such as dividends and rental income is often excluded entirely, on the reasoning that it does not stop when you die. Bring three years of returns and a summary of your equity comp.
Rarely. Group coverage is typically one to two times salary and frequently carries a hard dollar cap, often somewhere between $500,000 and $1 million, regardless of what you earn. For someone earning $400,000, a $500,000 cap is barely more than one year of income. Group coverage also generally ends when the job does, which matters most for professionals who change firms, make partner, or go independent.
Two things stand out. First, both professions often start earning late after a long training or associate period, so the earning curve is steep and the coverage need peaks later than for other careers. Second, partnership and practice ownership introduce buy-sell and key-person needs that are separate from family protection. Physicians should also confirm how any existing disability coverage defines disability, since income protection while living is frequently the larger exposure.
The federal exemption is high, so most households are well under it. The planning point is that exemptions change with legislation and estates grow. Texas has no state estate tax, which is a meaningful advantage over states that impose one at far lower thresholds. If your net worth is growing toward the federal threshold, or you hold illiquid assets such as a practice or real estate, that is the moment to look at liquidity planning rather than after.
Most should start with term, because the largest need is temporary: replacing income during peak earning years while children are dependent and a mortgage is outstanding. Permanent coverage earns its place for lifelong needs such as estate liquidity, business succession, or a dependent who will always need support, and for tax-advantaged accumulation once qualified retirement accounts are fully funded. Many high earners end up owning both, which is not a contradiction.
Longer than most people expect. Policies up to roughly $5 million on healthy applicants under 60 commonly take 30 to 60 days. Above $10 million, plan on 60 to 120 days, and very large cases spread across multiple carriers can run longer. Financial underwriting adds document requests such as tax returns and net worth statements. If a deadline exists, start months ahead rather than weeks.
Yes, always. Carriers ask about in-force coverage and applied-for coverage elsewhere, and they aggregate it against the income multiple limits. Omitting an existing policy is a material misrepresentation that can allow a carrier to deny a claim during the contestability period. It also tends to surface anyway through the MIB database.
General education, not advice about your situation, and not an offer of insurance, a quote, or a recommendation. Income multiples and financial underwriting guidelines shown are general industry patterns cited from published sources; they vary by carrier, product, purpose and state, change over time, and are applied at the underwriter’s discretion. Nothing here describes any particular insurer’s current guidelines. Tax treatment depends on your circumstances - consult a qualified tax advisor or attorney. All coverage is subject to carrier underwriting approval, and policy terms, benefits, exclusions and limitations are governed solely by the issued policy contract.