Published December 27, 2017|3 min read
Adventure sports, like skydiving, wingsuit flying, base-jumping or free climbing, aren’t innately cheap. You need gear, travel funds and costly licenses or certifications. But there’s a big expense daredevils often forget to budget for: Adrenaline-inducing hobbies can jack up your life insurance rates or, even, lead to a policy denial.
Life insurance pays out a death benefit to your family in the event of your untimely death. And risky hobbies put your life at risk. So, if you’re repeatedly throwing yourself out of planes, an insurer is going to price for that behavior, just as they would for health conditions that up the odds of death while a policy is in force.
It depends on how risky the hobby is — and how often you do it. The increase is usually added to your base premium as an extra fee priced as a flat dollar amount per $1,000 of coverage. The more often you thrill-seek, the higher than fee will be.
But you don’t have to forego financial protection for a risky hobby. Here’s a guide to getting life insurance if you have a daredevil streak, but want to make sure your loved ones are cared for when you die.
How do life insurers know you are an adrenaline junkie? Simply put, they ask about risky hobbies when you apply. And, while fudging facts to score lower premiums sounds all-too-simple, lying to your insurer is a bad idea. Most insurance companies check on the cause of death for their policyholders, and lying (which is considered fraud) can lead to a claim denial (read: loss of the death benefit) and hurt the people you love.
Some insurers are more open-minded than others when it comes to risky hobbies, so it pays to shop around. If you want to learn more about the options available to you, you can use our life insurance quoter to compare policies and buy one that fits your needs. You can also talk to your agent about what insurers are more accepting of your particular brand of thrill-seeking.
If you find an insurer who’s OK with your hobby — at least enough to not charge astronomical rates — or you can handle the more expensive premiums, by all means, get the coverage to ensure your loved ones are cared for after your death. If you find yourself completely priced out of a policy …
Trade group or membership organizations sometimes partner with insurers to obtain lower rates for their members. Contact groups associated with your risky hobby to see if they have any affiliations you can take advantage of.
A few insurers let you exclude a hobby or avocation from your life insurance policy. For instance, Principal offers exclusion riders for certain risky recreational activities, like scuba-diving or skydiving. The rider precludes the insurer from paying a claim if the policyholder’s death is related to the specified activity, and, in turn, spares the policyholder from paying higher premiums for taking that risk.
You can potentially mitigate costs and/or provide your family with more comprehensive coverage by getting a policy with an exclusion rider and a second policy that pays in the event you die while taking part in your hobby. For example, if you want $100,000 worth of coverage, consider getting $50,000 in exclusion rider coverage and taking out a second policy for another $50,000 that includes your risky hobby. If you die in a car accident, your loved ones receive the full payout for both policies. If you die jumping out of an airplane, your loved ones will at least get the $50,000 from the second policy.
Talk to your agent, who can run quotes with and without diving coverage so you know what the most affordable option is.
Disclosure: Policygenius offers insurance policies from many of the nation's top insurers, who pay us a commission for our services. However, all editorial choices are made independently.
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