What if you're in
pretty good health but you remove explosives for a
living or go cave diving for a hobby? Will
this affect your ability to qualify for term life
insurance coverage and/or affect the quote you might
receive. The answer is probably.
Let's take a look at the implication of hazardous
occupations and hobbies on your life insurance
options.
First, it's
impressive that you see the importance of life
insurance in light of your life-defying interests or
maybe it's because of them. The
term life insurance carriers
will unfortunately take this into account when
underwriting your application for the simple reason
that your mortality risk is higher. Mortality
risk is a fancy way to say that your probability or
change of death is higher than average with such
occupations and hobbies. Now for the good
news. Occupation and hobbies use to be a
significant consideration in the underwriting
process. Workplace safety has improved so much
over the last three to four decades that many jobs
are no longer really considered an issue.
Obviously, there are some jobs that still merit
concern and explosive removal would be at the top of
the list. If you have questions on your
particular profession, please
email us and we
will help with some guidance. Another concern
would be jobs that include a high exposure to dust,
chemicals, particulates, etc that have been tied to
increase disease and resulting death (paint and
asbestos tied to cancer being the obvious).
So what will
the carrier do if a person applies with a red-listed
occupation? They may offer the coverage but at
a higher rate or decline the coverage altogether.
Any additional health issues would make approval
even less likely in conjunction with a hazardous
occupation.
Dangerous
hobbies can also impact a person's ability to
qualify for term life insurance or the resulting
life premium that
is offered. Hobbies such as sky diving,
scuba-diving, auto or motorcycle racing are some of
the common concerns that would affect a carrier's
decision.
Personal
habits are separate from hobbies but equally
important in qualification. History of
excessive alcohol use, drug use, or other items
resulting from personal decision making can be
viewed by the underwriter. The
life underwriter
will also look to see if the amount of coverage
applied for seems excessive for their person's
financial needs. For example, if a single
person who earns $50K annually applies for $5
million dollars in term life insurance, this may
raise some red flags to the underwriter. The
carrier will look at the applied amount in
conjunction with other
existing term life insurance
to make sure a person is not attempting to
over-insure themselves. The concern there is
that a person may know of potential risk and is
attempting fraud with the purchase of a large amount
of life insurance.
Even though hazardous occupations or hobbies can
impact a person's eligibility and/or offered rate,
it's extremely important to answer this section of
the
term life application
honestly and completely. The carrier can
rescind coverage if there is missing information or
any type of misrepresentation. It defeats the
purpose of acquiring term life insurance only to
have no benefit when the unforeseen occurs.
Please enquire with us about your situation so we
can evaluate the options available for adequate life
insurance coverage.
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