Some Professional, Fun, and Downright Crazy Things You Do That Make You Considered High-Risk For Life Insurance

The story is shocking and sad: 41 year-old David Stather’s “secretive” base-jump off a 4,000-foot canyon deep in Navajo territory inside the Grand Canyon in northern Arizona goes tragically wrong, plummeting the much-honoured Calgary respirologist to his rocky death. Given that base-jumping is banned in many areas throughout North America, there are very few known base jumpers in Canada, many of whom commit such death-defying stunts in secret.

However, there are many across the nation who take part in sports and hobbies, or even professions, considered too risky by most insurance companies for a life insurance policy. Here’s a breakdown of such activities:

Professions

1. Underground miner
2. Private or commercial pilot
3. Lumberjack
4. Farmer or rancher
5. Construction worker, particularly work that involves structural steel or highway construction
6. Offshore oil rig worker
7. Offshore commercial fisher
8. Police Officer
9. Firefighter

As a result of these high-risk professions, life insurance policies are typically offered through employers. However, many employment life insurance packages do not offer enough life insurance to adequately support a family in the wake of an untimely death. Hence, shopping around for a supplementary life insurance policy is important, but not without difficulty.

High-Risk Hobbies

1. Amateur race car driving
2. Bungee jumping
3. Mountain or rock climbing
4. Skydiving and B.A.S.E. jumping
5. Scuba diving, as a result of the high incidences of drowning and decompression sickness
6. Aviation, particularly a private or personal aircraft, simply because it is less monitored than commercial aviation. Other activities most likely uncovered are hot-air ballooning and hang gliding.
7. Back-country skiing, simply because of the remoteness and the risk of avalanche, not to mention that rescue of injured persons is much more difficult.
8. Extreme water sports, such as power boating or boat racing, surfing, and white water rafting
9. Boxing, given that those who take part in it are highly susceptible to injuries that may be so severe that they could reduce quality of life.

Insurance companies make money by insuring people considered safe bets, namely those who will pay the premiums every month and not die unexpectedly. By engaging in a high-risk profession or ‘extreme’ sport, one is considered high-risk and thus will find it more difficult to get coverage without higher premiums, making the policy more expensive to get and maintain over time. For instance, if the underwriter feels that you’re more likely to die than others your age and sex, you’ll either be denied coverage, or you’ll get a rating that leads to higher premiums. These ratings are expressed in percentages: if you get a 50% rating, you’ll pay 50% more than a standard rate, while 100% rating means you’re premiums will be double. Ratings run from 50% to 400% more than standard, and therefore being labeled high risk can lead to premiums four or five times higher than standard. So for instance, if you’re a 40-year old female non-smoker who wants a 20-year term policy for $500,000 your standard rate will be approximately $60 a month. But think about it: if you’re considered high-risk, that same 20-year term policy for $500,000 will cost you up to $240 per month.

If you’re young and starting a family, or have one and engage in the high-risk professions or hobbies above, it will be very important to shop around and talk to an insurance professional to see what options are open to you for life insurance.

If having security for your family in the event of your unexpected death outweighs the thrill of your high-risk hobby, maybe it’s time to drop it for good to get you into a better, more cost-effective policy rating. Remember, the greatest asset for you and your family is your life—your ability to provide for yourself and your family. Life is unpredictable. Making sure your family is insured for the greatest amount possible is critical for their longevity and well-being.