Did you know that your occupation can increase the cost of your life insurance premiums? People with certain jobs that insurance companies categorize as “hazardous” end up paying more for life insurance, or may have exclusions on their policy which don't pay out if they die while working. Learn more about how insurers use your job to calculate risk, and what you can do to reduce the cost of life insurance if you’re quoted for higher premiums because of your occupation.
What you do for work can affect how much you pay for life insurance if your job poses a risk to your health or safety.
Individuals who work in the marijuana industry are currently ineligible for life insurance coverage from the top companies but may be able to purchase coverage from a smaller life insurance company.
If you receive high life insurance premiums due to your work and later change jobs, you can ask your insurer for reconsideration or apply for an entirely new life insurance policy.
Why your occupation affects your life insurance premiums
The risk you pose is based upon the likelihood that you might die. Life insurance companies use something called an actuarial table to estimate the probability that an individual will die at each age and that is factored into the cost of coverage.
If insurers find anything that they think might increase the likelihood of you dying at an earlier age, they will charge you more for coverage. So, if their actuarial tables show that your chances of dying at an earlier age are increased because of your job, you'll pay more.
How your occupation affects the cost of life insurance
To get the best classification rates (often called Preferred Best) or second-best rates (often called Preferred), your job likely cannot include any hazardous duties. Each life insurance company has its own definition of “hazardous,” but generally, it means anything associated with an increased risk of injury or death: such as diving, mining, firefighting, and high-rise construction, to name a few.
If your job does include hazardous duties, you can be quoted Standard rates, or you could be charged extra flat fees ranging from $2 to $5 per $1,000 of life insurance coverage per year.
If you’re purchasing a $500,000 policy, having a hazardous job with a $2.50 flat rate could mean paying an extra $1,250 per year for life insurance — an extra $104 per month.
Which occupations increase life insurance rates
Some of the jobs that commonly impact your life insurance rate include:
Building and construction workers
Electric powerline construction and maintenance workers
Fishing industry workers
Law enforcement workers
Lumber industry workers
Marine industry such as deckhands or sailors
Municipal and volunteer firefighters
Mining and quarrying workers
Oil and natural gas industry workers
If you work in any of these industries or have another job that involves physical risk, your life insurance advisor may ask you to answer more questions about your work, including your activities, tasks, working environment, and more.
Remember that each life insurance company has its own underwriting guidelines and will vary in how they treat your application, which makes it important to shop around.
Marijuana industry jobs and life insurance
Currently, in the United States, people who work in the cannabis industry can’t purchase life insurance from any of the major life insurance companies — even if the business is legal in your state.
Because marijuana is still illegal at the federal level, processing payments from someone with income from the cannabis industry requires separate accounts and reporting that makes it fraught for many businesses, including life insurance companies.
It’s possible that as the marijuana industry grows and federal regulations change, more insurers will follow suit and offer policies to people in the industry. In the meantime, you may be able to find a smaller company that can offer you a policy if you’re working in the marijuana industry.
→ Read about the the best life insurance companies for marijuana users
How your occupation affects life insurance riders
You can add supplemental coverage to your life insurance policy with a rider. Some riders are free add-ons to your policy, while others may cost an additional fee or require additional underwriting.
One type of rider — the disability income rider — is generally unavailable to people with high-risk jobs. A disability income rider added onto a life insurance policy pays a monthly benefit if you become disabled and cannot work, and life insurance companies don’t typically offer it to people who have a high likelihood of disability due to their occupation.
If you’re concerned that a disability could affect your ability to earn money, you should consider purchasing a separate long-term disability insurance plan, which is typically available to a wider variety of occupations.
How to save on life insurance if you have a high-risk occupation
If you have a high-risk job, you’re not completely disqualified from competitive life insurance rates. There are a few steps you can take to get the best possible rates for your individual circumstance.
Work with an independent broker: If you have a high-risk job, an independent broker like Policygenius can help you shop around and find the right life insurance company for your specific background.
Ask for reconsideration: If your job duties change and you think you might be eligible for lower rates, you can apply for reconsideration, where you can potentially get lower rates for any improvements in your health.
Pay your premiums annually: Depending on your insurance company, by paying your premiums annually instead of monthly, you can save between 2% to 5% on your premiums.
How an occupation change affects your life insurance
You’re only underwritten at the time of application, so the insurer cannot change your rates if you later start a job that is deemed risky. If you get a less risky job, you can try applying for a new policy, but you shouldn't cancel your current policy until you are made a policy offer.
By shopping around and exploring all your options, a high-risk job doesn’t have to stop you from getting the financial security you need.
Frequently asked questions
What jobs are considered “high-risk” to insurance companies?
Any job that increases the risk of injury or death. Hazardous jobs include active military, pilots, bartenders, construction workers, electric power line construction and maintenance workers, fishing industry workers, law enforcement workers, lumber industry workers, marine industry workers, firefighters, miners, oil and natural gas industry workers, among others.
Does income affect your ability to get life insurance?
While you do not need to meet a certain income threshold to get approved for a life insurance policy, how much you make does determine the coverage amount. For example, if you make $50,000 a year, you won’t be eligible for a $2 million policy, but you can still purchase a smaller amount of coverage.
Can I get life insurance if I work in the marijuana industry?
Most of the larger life insurance companies currently do not insure anyone who works in the marijuana industry because it is not legal on a federal level. However, some smaller companies may provide insurance coverage if you work in the industry.