While hobbies like crocheting and hiking are nothing to worry about, risky extracurricular activities can affect your life insurance rates.  When you participate in activities the insurance company could consider dangerous, the carrier considers you to be a higher risk to insure.  What you do and the amount of time you do the activity are all factors if you are applying for a new insurance plan.  If you do participate in risky hobbies, all the more reason that life insurance is very important especially if you have dependents that rely on your income.

Hobbies that may be deemed dangerous by the life insurance industry include (but are not limited to):

  • Aviation
  • Skydiving
  • Scuba diving
  • Racing (auto, boats, motorcycles)
  • Rock climbing
  • Hang gliding

There are no hard-and-fast rules for what you would pay for life insurance if you participate in one of these, or another, risky hobbies.  Life insurance carriers underwrite on a case by case basis.  Let’s take a look at a couple examples.

Example 1:  A 40-year-old non-smoking woman applies for a $1M 20-year term life insurance policy.  She’s been scuba diving for 11 years, with the deepest dive being 90 feet.  Sending her information out for an underwriting study, which is when we send the applicant’s information to the carriers to see what they could potentially offer, would result in varied responses.  Some carriers would come back saying they could offer Standard Plus.  Another carrier may say they could offer Preferred Plus if the applicant does not plan on any dives greater than 100 feet within the next 12 months.  Another may offer Preferred Plus pending the applicant does not participate in cave diving, retrieval, ice, or search and rescue diving.
Example 2:  A 25-year old non-smoking man applies for a $200,000 30-year term policy.  He has a commercial and instructor pilot’s certificate and has flown 450 total hours.  A carrier may come back and offer Standard Plus with a Flat Extra of $2.40 per thousand for the life of the policy.  Another carrier may offer Preferred with a $1.50 Flat Extra per thousand for 5 years.

Sometimes a carrier may include a flat extra fee to cushion risk they are taking that falls outside their typical rating system.  The flat extra can last the entire life of the policy, or just a few years depending upon the carrier and how they underwrite the specific case.  With the $1.50 flat extra aviation example above, because the pilot is applying for $200,000 worth of coverage, the flat extra total would then be $300 (1.50 x 200).  In this example, if the Preferred annual premium for this policy is $400 annually, the pilot would be required to add the $300 on top of that for 5 years.  After paying the flat extra for 5 years, his annual premium would drop to the $400 for the remainder.

Had this carrier stated that the flat extra would last the life of the policy, rather than just 5 years, the pilot would pay the Preferred Premium + Flat Extra every year the policy is in force.  You can see how this would make quite the difference in cost.

Life insurance companies rate certain impairments differently.  Whether this “impairment” is a high-risk hobby or a chronic medical condition, Quotacy will shop your case with many life insurance carriers to help you get the best product for your individual situation.  Take the first step in protecting your loved ones by getting a free and instant term life insurance quote today.  The younger and healthier you are, the more affordable it is so don’t wait.  Life insurance offers great peace of mind knowing your loved ones will be protected when you are not around to do so.


Photo credit to: bhinddalenes


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