As many as 1.2 million people go scuba diving regularly, with that number growing every year. Scuba divers describe it as magical, surprising, and, above all, fun.
But in our experience talking to scuba divers who are shopping for life insurance, many are frustrated by the perception that life insurance companies see their hobby as risky. The annual fatality rate for divers is relatively low when compared to the death rates for heart disease or road traffic accidents. Why do life insurance companies see scuba divers as riskier than other applicants?
In reality, not all life insurance companies see scuba diving as risky. Just like consumers overestimate the cost of life insurance by nearly three times, many scuba divers overestimate how much their hobby will affect insurance premiums.
Will scuba diving affect my life insurance premiums?
Do you only dive on vacation or do you dive every other week? Are you always diving with a certified buddy in open water or are you searching for treasure in the Florida Keys?
The details matter: insurance companies don’t see all forms of diving as equally risky. So what factors do insurance companies look at when examining your diving habits? It all breaks down to five basic questions:
Are you diving for pay?
How many times do you dive per year?
How deep do you usually dive and what’s your maximum depth?
Do you dive in overhead environments (cave, wrecks, ice, salvage, etc.)?
Do you dive outside of the recreational norm (rescue diving, etc.)?
To help you get a quick idea of whether or not your diving habits will affect your life insurance premiums, we created this flowchart that will match you with one of our three diver personas. All of these personas are based on a 35-year-old male with no health problems. Note that age and health factors will change your quotes.
On the left, we have our "vacation diver," who dives less than 10 times per year and doesn’t dive deeper than 75 meters. At the best insurance companies, there will be no noticeable increase in premiums for a vacation diver compared to a similar non-diver.
In the middle, we have a "recreational diver," someone who dives more than a vacation diver, but still mainly for recreational purposes. At the best insurance companies, recreational divers will pay between $2 and $4 extra per month.
On the right, we have our "risky diver." Why is this diver risky? This diver either engages in behavior outside of the recreational norm, such as rescue diving, or dives in overhead environments. Divers can also be placed in this category if they routinely dive below 100 meters. Risky divers are usually charged an extra $2.50 to $5 per month per $1000 of coverage.
In our experience, the best providers of life insurance for scuba divers are Principal, SBLI, and Prudential. Continue reading for information about how independent brokers can help you shop around for the best prices.
How are insurance companies figuring out what they’re going to charge me?
In the section above, we showed you the five key questions that underwriters ask scuba divers who are applying for life insurance. Here, we’re going to break down each one of those questions and examine how life insurance companies are assessing your risk.
Before we go further: most insurance companies won’t even consider covering you if you’re not a certified diver. If you’re not certified, they may cover you if you always dive with someone who is certified. Even if you are certified, your insurance company may stipulate that you always dive with a certified diving buddy.
1) Are you diving for pay?
This is the first question underwriters will ask you because it has the most complicated answer. There are lot of different kinds of diving for pay, and doing it doesn’t necessarily mean your premiums will increase. If you’re currently diving for pay in any form, be prepared for a lot of follow-up questions.
2) How many times do you dive per year?
Most insurance companies don’t have a limit for how many times you can dive per year. Insurance companies that do limit you usually put the limit between ten and twenty dives per year. Others limit you to dives that occur while you are on vacation. Some have loose limits that are open to interpretation, like "only a few" per year.
Our recommendation is to pick an insurance company with either a specific, named limit or no limit at all. We also recommend that you stay away from companies with vague limitations. Not only will it be harder to get an accurate quote from these companies before you apply, but if you break one of these vague rules without realizing it, you can end up invalidating your policy.
3) How deep do you usually dive and what’s your maximum depth?
In general, the deeper you dive, the more you’re going to pay. Most insurance companies have a depth limit, but that doesn’t mean you can’t go deeper. If you normally dive deeper than a company’s depth limit, there is usually a flat fee of $2.50 to $5 per month per $1000 of coverage.
If the insurance company doesn’t offer a way to get around the depth limit, it’s better to look for a different policy with more flexible depth limit.
4 & 5) Do you dive in overhead environments (cave, wrecks, ice, salvage, etc.)? Do you dive outside of the recreational norm (rescue diving, etc.)?
We grouped these two questions together because they both result in you paying the highest premiums for your life insurance policies. You probably know if you dive in an overhead environment, but you not might be aware if one of your activities is outside of the recreational norm. Some examples of non-norm activities include free diving, spear fishing, and photography below 100 feet.
[caption id="attachment_5378" align="aligncenter" width="1600"] Photo by Derek Keats.[/caption]
How do I guarantee I’ll get the best premium?
Work with an independent broker or agent to find the best premiums. An independent agent, like PolicyGenius, can compare quotes from a wide variety of different life insurance providers in order to find the cheapest premiums. An independent agent will also know more about how individual insurers deal with activities outside of the recreational norm, making sure that no matter what kind of diving you do, you’ll always get the best premiums.
Using an independent agent won’t cost you a thing. Learn more about agents and brokers.
Do I have to tell the insurer that I’m a diver?
This is important advice for any insurance policy application, but it bears repeating: do not lie on your life insurance application. You might be tempted to lie about how deep you dive or about some of your riskier behavior in order to avoid higher premiums. But if the insurance company finds out you’ve lied to them, the consequences are much worse than paying a few bucks. At best, they’ll just take the premiums you owe them out of your death benefit. At worst, they’ll cancel the entire policy. And let’s say you told your insurance company that you never dive below 100’ and then you die at 130’? They can refuse to pay the benefit, leaving your loved ones high and dry.
You can also buy a life insurance without diving coverage, avoiding the premium bump. Currently only Principal offers this, but if you’re interested in this option, you should tell your agent or broker. They can run quotes with and without diving coverage so you can more accurately compare prices.
I’ve seen special insurance packages customized for divers and they seem a lot cheaper. Are they better than a generic life insurance policy?
It depends. Specialized insurance products, like the plans offered by the Diving Alert Network, can be great for divers. Specialized insurance for divers is tailored specifically to the kind of medical costs that affect divers and can provide extra benefits like covering lost diving equipment and lost transportation costs.
Though specialized insurance is great for covering diving related accidents, be aware of what it doesn’t cover. DAN’s insurance plan doesn’t cover any accidents or illnesses not caused by a diving related accident. Get into a car accident on the way to your next diving trip? DAN’s plan won’t cover that.
Specialized insurance plans are best seen as an augmentary insurance product that you buy in addition to a generic insurance policy. You can buy a life insurance policy from Principal with something called a "diving exclusion rider," which means the policy will cover everything except diving and your diving activities will not affect your premium.