Which factor is NOT considered in calculating the net death benefit?

The net death benefit of a life insurance policy refers to the amount that beneficiaries receive upon the death of the insured after accounting for various factors associated with the policy. In this calculation, the face amount of the policy is crucial as it represents the basic sum to be paid out. Unpaid dividends from the policy may also be added to the net death benefit if applicable, as some policies accumulate dividends that can increase the overall payout. Additionally, any outstanding loan amount against the policy can reduce the amount ultimately payable to the beneficiaries, as this debt must be settled before the payment is distributed.

However, the annual income of the insured is not a factor in calculating the net death benefit. The death benefit is primarily concerned with the insurance components—the face value, any dividends, and any loans—rather than the insured's income level. This separation is rooted in the purpose of life insurance, which is to provide financial support to beneficiaries after the insured’s death, rather than to consider the income of the insured at the time of death. Therefore, the annual income does not affect the calculation of the net death benefit amount.