In today’s world, there are a variety of activities that people can experience at a relatively low cost. In the metropolitan area where I live, I can jump at an indoor trampoline park, race a go-cart, canoe, cross-country ski, bike, or go on any number of different adventures. To an insurance company, these are fairly tame activities. The likelihood of a major accident or death is very low. So, participating will not affect your life insurance rates in any way. Your premiums will not increase just because you go for a bike ride every once in a while. What does make a difference to an insurance company are those activities that are considered “high-risk.” This can include any activity that has the potential to be dangerous in some way, either because of the high rate of accidents or chance of death.
Life insurance is an important consideration for anyone looking to provide their beneficiaries with monetary support once they have died. If you are a risk taker, and love extreme sports, you may want to consider high risk life insurance. This type of policy is commonly associated with individuals who cannot obtain a typical term or universal policy because of a long-term health condition like diabetes and high blood pressure. But if you like to go bungee jumping, this is an option for you too.
What is a “high-risk hobby”?
A 2011 article by Daily Finance describes the seven deadliest hobbies and their impact on insurance rates. Researchers compiled data from organizations and government agencies that monitor the popularity and riskiness of various extreme activities. Several are detailed below:
Over 2 million people participate in scuba diving in the United States. Even though divers are required to have a license, proper gear, and training, over 150 people die every year. The most common reasons are equipment failure, failing to rise to the surface improperly, or heart failure. The insurance industry considers this hobby to be quite risky, and your annual premiums may increase around $5 for every $1,000 per year. People who dive to depths of 150 feet or more are considered uninsurable.
Climbing to the highest peaks in the world is a very attractive goal for some people. George Mallory and Andrew “Sandy” Irvine were some of the first British explorers to trek Mount Everest. Their unfortunate end highlights the risks involved in such adventures. Since the peak in 1956 of 53 climbing deaths, the average has sat steadily around 25 deaths per year. These are generally caused by malfunctions to equipment, bad weather, or falling debris. If you live in the continental United States, the average premium increase is approximately $3.50 for every $1,000 per year. Mitchell Fox of San Francisco understands these risks first hand. He states that “As someone who works in finance, I understand why an insurer would charge a higher rate to a higher-risk customer—that makes good business sense. And honestly, mountaineering is a dangerous hobby. My wife took a scary fall a couple of years ago on Mount Shasta and was lucky to be mostly unhurt.”
Surprisingly, the insurance industry considers hang gliding to be one of the riskiest hobbies, and one of the “most dangerous in-air sports possible.” The pilot making a mistake or something happening to the equipment are the primary sources of accidents and death in this sport. While the number of deaths per year is much lower than other sports, there is one gliding accident for every 116,000 attempts. If you hang glide on a regular basis, you will see your life insurance premiums rise substantially, or be declined for coverage altogether.
Other risky hobbies include:
- Motorcycling: $1,000 more per year in insurance premiums
- Skydiving/base jumping: $2,500 more per year, or dropped from your life insurance policy altogether
- Rock climbing: $1,500 more per year
- Hunting: $500 more per year
- Recreational boating/fishing: $750 more per year
Keep in mind that sports aren’t the only consideration, aside from health, for life insurers. People in high-risk occupations, like police officers and firefighters, put their lives in danger everyday for the safety and well-being of their community. To an insurer, this means a higher likelihood of accident and death. These risky hobbies and careers may affect your other types of insurance too. You may see an increase in your health insurance and might not be able to purchase long-term disability insurance.
Be Honest With Your Insurance Carrier
So, what if you want to participate in a high-risk activity every once in a while? That’s ok, according to insurers. If you decide go running with the bulls in Pamplona, Spain, your insurance carrier will not increase your premiums. Even if you were to be involved in a horrific accident and die while running, your life insurance will still pay your beneficiaries. The only instance in which there could be a problem is if you purchase a life insurance policy a few days or weeks prior to running with the bulls (or any other dangerous sport). This indicates to your insurer that you anticipated the possibility of death. What matters most is that you do not participate in these activities regularly, and if you do, be honest with your insurer. Lying on an application only means that the insurance company might not pay the value of your policy. Any form of misrepresentation can be considered fraud. Speak with your local, independent insurance agent today. They can help you determine the right life insurance policy for you.
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