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Life Insurance: Living on the Edge Can Cost You

When it comes to your life insurance, living on the edge can cost you.
In 2004, “Along Came Polly” starring Ben Stiller, was in theaters. Ben played  Reuben, a high-strung, by-the-book risk management analyst? One of Rueben’s  biggest clients constantly participated in high-risk hobbies.  Because Reuben assessed risk for a living, these hobbies made him sweat bullets. He understood, the higher the risk, the less likely there was going to be a policy that would protect his client.

High-Risk Hobbies

What you may deem as regular recreational activities or bucket list agendas may signal a red flag to life insurance companies and people like Reuben. What might be some red flags? For example, if you’re partaking in activities like rock climbing, skydiving or kayaking, you’re a riskier case than someone whose idea of a “rocking” weekend night is a game or two of Mexican Train at home. Also, because you’re riskier – regardless of your health  – your insurance rates could cost more.
These potential risk factors below can not only make life insurance premiums rise significantly – you may be denied a life insurance policy altogether. Anything that leads to an insurance company having to pay out a claim earlier than expected, will send up a red flag. Here is a list of 9 hobbies that may impact the cost of your life insurance.

  • Bungee jumping
  • Scuba diving
  • Parachuting
  • Racing (car, boat, bike)
  • Hang gliding
  • Skiing
  • Whitewater rafting
  • Hot air ballooning
  • Heli-skiing or snowboarding

But, how will they know about your dangerous activities? When you apply for a life insurance policy, you are required to disclose specific, requested information in order to approve your policy or lower your premium. Because of this, some people may choose to omit certain high-risk habits and activities from their application to receive a lower premium.
High risk hobbies, habits, or activities people tend to leave off their application include tobacco use, DUIs, dangerous travel, and previous health conditions. However, insurance companies use several resources to confirm your medical history, driving record, and other pertinent information with regards to your term life insurance policy.
Additionally, when you consider a life lived in the digital age, many people document their day-to-day actions and their adventures are open for all to see on social media.

Period of Contestability

Insurance companies are also not required to automatically approve claims. For life insurance specifically, there is a short period of time when a life insurance company can investigate, and subsequently, deny a claim. In most states, the contestability period is two years and starts when the policy goes into effect.
It breaks down to mean, if you sign up for high-risk life insurance and die within this two-year span, the company may deny death benefits if it’s discovered you falsified or left significant information off your life insurance application. Because life insurance benefits are typically set up to aid family or other beneficiaries left behind, dishonesty on your application can delay or prevent them from receiving funds.

Will I Qualify for Life Insurance?

Some companies will offer high-risk life insurance, but there are variables to each policy that may still apply. Applications are considered on a case-by-case basis. High-risk term life insurance coverage is available and considered for people who participate in higher risk hobbies, but also for those who have high-risk professions, habits, or diseases.
Don’t feel discouraged or automatically assume your hobbies will disqualify you from receiving a policy or will immediately prompt a higher premium. If you are concerned about your chances of receiving high-risk term life insurance based on your extracurricular activities, speak with your advisor about your options.
If you engage in any of these dangerous hobbies mentioned above you should consider life insurance. Rather than applying a whole lot of times to different life insurance companies, you can get competitive life insurance quotes from multiple insurers with one simple no obligation questionnaire through SelectQuote. It only takes a few minutes to find your rate. What are you waiting for? Find out your rate today!
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1 Comment

  1. Great article on getting life insurance with risky hobbies. Scuba diving has life insurance underwriters falling into many different camps when determining the rates scuba divers pay for life insurance.
    Fortunately, most scuba divers fall into the recreational or hobby category, and not the dangerous activity underwriting category.