When applicants have pre-existing health conditions, such as smoking or being overweight, many providers worry about their liability risk when discussing coverage options.
In those cases, insurance providers have every reason to be concerned since these types of policyholders would have a higher fatality rate. Consequently, this could lead to more insurance claims coming their way.
But an occupation or hobby providers deem “high-risk” can also leave you lacking when it comes to life insurance.
Or, you may end up paying costly monthly payments – in some cases up to four times higher or more – than those applicants life insurance companies consider “safe.”
What Is Considered High-Risk?
When providers encounter applicants who are more likely to file an insurance claim, these individuals are then categorized as “high-risk.”
For instance, an applicant would be considered high-risk if they engage in a dangerous hobby that increases their odds of perishing.
However, realize that this high-risk categorization impacts various forms of coverage (home or renters, auto, health, and life) in different capacities.
Any of the following scenarios could earn you the label of “high-risk”:
- An increase in premium for the policy’s term or for a specific time frame.
- An outright decline of coverage.
- A decline on a specific add-on provision while still being underwritten. For example, if you have a dangerous job, you may still qualify for life insurance (and avoid the high-risk label). However, you may not be deemed a good fit for the waiver of premium (a clause waiving your obligation to pay monthly payments if you suffer from an illness or become disabled) due to your job.
Are You At Risk?
Obvious factors, like smoking, drinking excessively, being overweight, taking certain medications (like anti-depressants) and a severe health history can easily land you in this high-risk category.
However, it’s quite possible that your occupation could also earn you the rating of high-risk, too. That’s because some hazardous occupations involve a higher risk of perishing on the job than others.
The jobs that insurance companies consider to be high-risk are many the U.S. Bureau of Statistics says carry the highest rates of job-related accidents and deaths.
These occupations include the following:
- Police Officers: Municipal police officers are not labeled high-risk unless they work in a special unit, like the bomb squad or SWAT team. State troopers and county sheriffs may be rated high-risk, but it depends on their state’s regulations.
- Firefighters: Municipal fire firefighters are not labeled high-risk, but firefighters in a mine and on an oil rig will be rated high-risk.
- Underground Miners. Most people think of mining as a job of the past, but there are still millions of underground miners today. According to some studies, 50 to 60 miners die every year on the job.
- Pilots. Private and commercial pilots are both considered high-risk jobs by many insurance companies.
- Agriculture and Forestry. Logging is often labeled a high-risk occupation. And in some regions, farmers and ranchers are deemed high-risk by insurance providers.
- Construction Workers. Work that involves structural steel or being part of a highway construction crew earns the label high-risk. Otherwise, traditional construction (building homes, etc.) work is not generally considered high-risk.
- Offshore Oil Rig Workers. Onshore rig or refinery workers are in the clear.
- Offshore Commercial Fishermen. Just about anyone in a small boat (most private or family-owned fishermen) gets rated high-risk pretty quickly. But, there are cases where even if you’re on a big boat (crab fishermen), you could still be labeled high-risk. If you stick to fishing in-shore, you’re good.
What Are Your Options?
First, see if your insurance carrier can offer you a formalized exclusion to maintain low rates. So, if death does occur while the high-risk occupation is recorded as the exclusion, named beneficiaries won’t be able to take advantage of the payout.
For example, let’s say a pilot applies for an aviation exclusion. However, air-related claims would only be covered if the pilot schedules a commercial flight for personal reasons, not business.
Hobbies Can Hurt, Too
Having a dangerous occupation isn’t the only way to be considered high-risk by insurance providers. Individuals who put their lives on the line by engaging in these high-risk hobbies may end up paying more expensive premiums, too.
These– and similar adrenaline-producing hobbies – could dramatically raise your insurance rates:
- Amateur racecar driving
- Hang gliding
- Bungee jumping
- Mountain or rock climbing
- Scuba Diving
If, and to what extent, a hobby may impact rates typically varies from provider to provider.
Most companies factor in participation frequency, the location of the hobby, and relevant variables, such as if you engage in speeding or how high up the bungee spot is.
When you apply and are going through the application, just remember insurance providers are going to ask you A LOT of questions about your hobby, especially if it is generally considered dangerous or thrilling.
Why High-Risk Hurts Your Wallet
High-risk jobs and extreme hobbies can certainly leave a dent in your bank account.
If your occupation, hobby, or current state of health lead to being labeled high-risk by an insurance carrier, you could end up with premiums $2 to $5 more per thousand dollars of coverage, depending on the insurance company in question.
The $2 – $5 mark might not sound like much right now, but imagine you’re going to get $1 million in insurance coverage. Before you know it, it’s really going to add up.
Luckily, there are some good options for you to consider. You don’t have to quit your high-risk job or take out a large loan to secure life insurance for you and your loved ones.
You need to pinpoint an insurance company that regularly works with high-risk clients and understands their situation. Finding one of those companies will save you hundreds of dollars every year.
High-Risk Clients and BestLifeQuote.com
Unless you want to go to each insurance company and explain your job to get a quote, the best way to go about getting insurance protection is to work with an independent agency.
We know which specific insurance companies are better than others. We can save you hours of talking to companies and listening to agents trying to sell you expensive coverage.
If you’ve been quoted with expensive premiums before, don’t think it’s your only option. Even if you’ve applied to an insurance company before and been rejected, you can still get quality life insurance.
There are always options, like guaranteed coverage. These plans won’t ask about your job. They will never know what your occupation is, and there is no chance you’ll be declined.
As you probably guessed, there are some drawbacks of guaranteed acceptance life insurance. They are more expensive and have low coverage limits.
This means guaranteed acceptance policies don’t work for everyone. If you have questions about these plans, we can help you determine if they match your needs.
Go ahead and make one call to us and we’ll handle the rest. We aren’t pushy sells people trying to rope you into a sub-par plan with high premiums.
We pride ourselves on the ability to work with every applicant and leave them with a quality insurance plan for a price they can afford.
Want to speak with us regarding your life insurance needs? Fill out the form on this page or call us at 888-552-6159.