Life insurance with hazardous activities

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
the mind bogles
Posts: 11
Joined: Wed Jun 26, 2013 1:35 pm

Life insurance with hazardous activities

Post by the mind bogles »

Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)

We got quotes through term4sale, were contacted by an agent at Accuquote, and the annual premium for a 20 year $1M policy through Banner changed from $600 to $3500 once the hazardous activity was added. That seems like a big increase, and I don't know if that's the type of premium we should expect.
technovelist
Posts: 3611
Joined: Wed Dec 30, 2009 8:02 pm

Re: Life insurance with hazardous activities

Post by technovelist »

the mind bogles wrote:Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)

We got quotes through term4sale, were contacted by an agent at Accuquote, and the annual premium for a 20 year $1M policy through Banner changed from $600 to $3500 once the hazardous activity was added. That seems like a big increase, and I don't know if that's the type of premium we should expect.
Young people have low life insurance premiums because they have a very low risk of death.

Unless they do hazardous things, that is. I imagine that the actuarial tables indicate that someone who engages in a hazardous activity is much more likely to die than someone who doesn't. I can think of reasons for that but don't want to speculate.
In theory, theory and practice are identical. In practice, they often differ.
bluemarlin08
Posts: 1561
Joined: Wed Aug 29, 2007 12:18 pm

Re: Life insurance with hazardous activities

Post by bluemarlin08 »

Rock climbing risk is determined by the type of climbing, the gear used, where it is done, experience, altitude and other factors. Some companies are more liberal than others. Try to find an agent that has experience with this issue.
User avatar
White Coat Investor
Posts: 17409
Joined: Fri Mar 02, 2007 8:11 pm
Location: Greatest Snow On Earth

Re: Life insurance with hazardous activities

Post by White Coat Investor »

Yes, that's what you should expect. Rock climbers don't buy life insurance. However, if there is a period in your life when you haven't climbed for a few months (you know, like Winter), and you have no trips planned in the next 3 months, you might consider answering that question differently.

You might also look into the AAC insurance thing:

http://americanalpineclub.org/p/insurance
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
User avatar
White Coat Investor
Posts: 17409
Joined: Fri Mar 02, 2007 8:11 pm
Location: Greatest Snow On Earth

Re: Life insurance with hazardous activities

Post by White Coat Investor »

bluemarlin08 wrote:Rock climbing risk is determined by the type of climbing, the gear used, where it is done, experience, altitude and other factors. Some companies are more liberal than others. Try to find an agent that has experience with this issue.
Yea, but if you're serious enough to call yourself a climber, then you're going to be paying a ton more money than someone who can answer that question "no."
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
BruDude
Posts: 4211
Joined: Wed Dec 29, 2010 11:28 pm
Location: Las Vegas

Re: Life insurance with hazardous activities

Post by BruDude »

the mind bogles wrote:Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)

We got quotes through term4sale, were contacted by an agent at Accuquote, and the annual premium for a 20 year $1M policy through Banner changed from $600 to $3500 once the hazardous activity was added. That seems like a big increase, and I don't know if that's the type of premium we should expect.
You were probably charged a $3.00 per thousand of coverage "flat extra" which would account for the extra $3,000. I would suggest working with an independent agent that can shop it for you with 8-12 companies and find out what type of offer they would consider. If you can get an offer without a flat extra premium would be best - every company will look at rock climbing differently.
scifilover
Posts: 543
Joined: Sun Apr 14, 2013 12:56 pm

Re: Life insurance with hazardous activities

Post by scifilover »

When you apply for a life insurance policy ( or any other kind), you make representations about various thing including your work, activities, health etc. The insurance company has a period of time during which they examine you and your life (as you have represented it), and make a decision about issuing a policy to you, and at what price.

There is a lot of fraud. As a result, the insurance company is entitled to void the policy after issue if it finds out you have not told the truth. This right of rescission by the company is usually limited to the first two years after issue. So, if a person applies for a policy and doesn't report their cancer, and the company investigation and doctor exam don't find it, the person buying the policy must live for two years, after which the policy is Incontestable, and when the person dies their beneficiary will collect.

Many large employers offer group life insurance which any employee can buy, and for which there is no underwriting. If you didn't buy this when you hired on, it might still be possible to obtain.
smackboy1
Posts: 1285
Joined: Wed Mar 14, 2007 9:41 pm

Re: Life insurance with hazardous activities

Post by smackboy1 »

the mind bogles wrote:Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)
Find an agent who will research policies for you. Ask around amongst rock climbers which insurer's they use.

Insurer's define "hazardous activities" do not have the same definitions in their policies. We're occasional SCUBA divers so we looked for policies that ignored SCUBA diving if it had been over 2 years since our last dive. Our policy defined "non smoking" as not having smoked in the last 10 years.
Last edited by smackboy1 on Fri Mar 28, 2014 2:41 pm, edited 1 time in total.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
technovelist
Posts: 3611
Joined: Wed Dec 30, 2009 8:02 pm

Re: Life insurance with hazardous activities

Post by technovelist »

smackboy1 wrote:
the mind bogles wrote:Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)
Find an agent who will research policies for you. Ask around amongst rock climbers which insurer's they use.

Insurer's define "hazardous activities" do not have the same definitions in their policies. We're occasional SCUBA divers so we looked for policies that ignored SCUBA diving if it had been over 2 years since our last dive. Our policy defined "smoking" as not having smoked in the last 10 years.
So to get a non-smoking rate you must have smoked in the last 10 years? :confused
In theory, theory and practice are identical. In practice, they often differ.
Topic Author
the mind bogles
Posts: 11
Joined: Wed Jun 26, 2013 1:35 pm

Re: Life insurance with hazardous activities

Post by the mind bogles »

Thanks for the replies. We were indeed quoted a price including a flat extra. We will look into getting multiple quotes from different companies to see if we can do better and avoid the flat extra; thanks as well for that AAC insurance recommendation which looks quite promising.
Jack FFR1846
Posts: 18501
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Life insurance with hazardous activities

Post by Jack FFR1846 »

Does the application ask specifically for the activity that you do? I taught race drivers for a dozen years. Think a newbie driver going well over 100mph towards a concrete barrier and my only control of him was my voice. Nobody ever asked if I did that. There were specific questions about skydiving and if I had a trampolene in my backyard, but that was about it.
Bogle: Smart Beta is stupid
smackboy1
Posts: 1285
Joined: Wed Mar 14, 2007 9:41 pm

Re: Life insurance with hazardous activities

Post by smackboy1 »

technovelist wrote:
smackboy1 wrote:
the mind bogles wrote:Does anyone have good information on the best way to apply for term life insurance or the best companies to consider when you participate in "hazardous activities"? (In our case, rock climbing.)
Find an agent who will research policies for you. Ask around amongst rock climbers which insurer's they use.

Insurer's define "hazardous activities" do not have the same definitions in their policies. We're occasional SCUBA divers so we looked for policies that ignored SCUBA diving if it had been over 2 years since our last dive. Our policy defined "smoking" as not having smoked in the last 10 years.
So to get a non-smoking rate you must have smoked in the last 10 years? :confused
Typo fixed
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
Post Reply