Dangerous Hobbies and Life Insurance
The process of underwriting does not just involve a review of your medical information. Life insurance companies also look at the lifestyle choices you make such as hobbies. These are usually called non-medical impairments or avocations. Obviously, some hobbies are considered more dangerous than others and will require an additional “flat-extra” premium amount per thousand of coverage. For example, let’s say a 20 year term policy for $500,000 of coverage costs you $750 in premium per year based on your health class. If you engage in a dangerous hobby, an insurer could impose an additional $3.50 flat extra per $1000 of coverage. So if you had $500,000 in coverage, it would result in an extra $1,750 (500 x $3.50) in premiums per year. Your yearly premiums would then be $2,500 ($1,750 + $750) for $500,000 of coverage. So which hobbies are considered dangerous and how much extra will it cost you? It really depends on the insurance company, which is why it is smart to shop your coverage with an independent agent. Here are some examples of flat-extra amounts that you might see for some of the more popular hobbies.
- Aviation: The amount of flat-extra paid will usually depend on age of pilot, hours flow per year and hours of experience. Student pilots should always expect to pay a flat-extra of $2.50 to $3.50. Another rule of thumb is the more hours flown per year, the higher the flat-extra. For instance, a pilot over the age of 26 would pay a flat extra of $2.50 for 301-600 hours of flying per year, but would pay $5 flat-extra per thousand for more than 600 hours.
- Hot Air Balloon: No extra up to $2.50 flat-extra.
- Hang-Gliding / Paragliding: $2.50 to $7.50 flat extra.
- Parachuting: $5.00 to $10.00 flat extra depending on number of jumps.
- Diving: If depth is less than 100 feet, no flat extra. Deeper than 100 feet $3.50 to $5.00 flat extra depending on number of dives per year.
- Rock, Snow/Ice Climbing: Altitude < 13,000 feet $2.50 to $3.50 flat extra. If > 13,000 feet $5.00 to $7.50 flat-extra.
- Auto Racing: It depends on which type of racing is done. For instance, some stock car, autocross or rally racing can qualify for preferred, while drag racing, sprint and modified racing will usually carry a flat- extra of $2.50.
These examples are just a guide and obviously don’t represent all of the hobbies that are considered high risk. The actual flat-extra charged will really depend on the details of your individual case. The insurance company will ask you to fill out a questionnaire regarding your specific hobby which will allow them to make an informed decision as to how much extra you could be charged. One thing to consider is that if you no longer engage in the hobby, your agent should be able to negotiate the flat-extra off of your policy.
Disclosing any dangerous hobbies on your application is the most important thing. Be honest and detailed about your hobbies in your application. The last thing you would want is for an insurance company to dispute your death benefit if you died while engaging in a hobby that you withheld on your application. An experienced independent agent will be able to find the insurer that will best rate your particular hobby. Do you need life insurance but engage in a dangerous hobby? We would welcome the opportunity to work your case. Please feel free to give us a call at (888) 687-9444 or email us at info@archstoneagency.com if you have any questions.
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com. You can also visit our website at www.archstoneinsurance.com.
