We hear it often, “My client is healthy as an ox … he just base jumps,” or “I don’t understand why my client is being rated for mountain climbing – she’s clearly a very fit woman.”
Even if you may be correct in assessing your client’s physical health, the inherent risks remain with their hobbies. While those activities may be on the more extreme end of the spectrum when it comes to commonly seen avocations within the general population, there are risks involved with more readily participated avocations, such as SCUBA diving or auto racing. Those are often dismissed by the uninformed simply because they are more widely practiced.
Although that may be true, even the most careful individuals get tripped up by circumstances beyond their control. When an individual participates in an activity that elevates their exposure to such harm, they become a riskier investment for insurance companies to insure.
In addition to your client’s age and health status, several other variables contribute to how insurance carriers rate each activity, including level of participation, certification obtained, experience, location of activities, equipment used/not used, etc. Each of these variables affect your level of risk exposure.
For example, a healthy, 50-year-old private pilot with an instrument flight rating (IFR) with 20 years of experience flying, 2,000 total flight hours and 100 hours per year has less exposure to risk than a healthy, 25-year-old pilot without an IFR who has been flying for five years and has only logged 100 total hours with only 20 hours per year. Clearly, the 50-year-old has an additional certification and more experience. In this circumstance, it may be possible for the 50-year-old to obtain preferred rates, while the 25-year-old may be limited in rate class and have an additional flat extra tacked onto the premium.
Occasionally, depending on the avocation, some carriers will offer exclusion riders. This is when the carrier will agree to insure the individual and pay the benefit in case of death unless the insured died while performing the excluded activity. While many carriers offer aviation exclusion riders, other avocation exclusion riders are not as widely available – and when they are, the state of sale and more advanced ages further dictate availability.
When it comes to avocations, it’s important to know:
Check out our helpful questionnaire to help guide the conversation with your client. No matter the situation, we encourage you to ask questions and get all the facts. If you have a specific scenario you would like to discuss, please reach out to me at email@example.com or contact your dedicated Ash Brokerage underwriter.
Joe Taulbee has been in the life insurance industry for nearly 10 years with more four years as an underwriter, and he’s helped numerous families and individuals gain much needed financial security and peace of mind through the procuration of life insurance. He has passed all levels of testing through the Academy of Life Underwriting and is currently pursuing an underwriting fellow designation with ongoing LOMA coursework.
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