How your job affects your life insurance rates

Occupational ratings and life insurance.

Life insurance rates are determined by a variety of factors that represent your risk to the insurer, including your age, health status, driving record, your hobbies or avocations (like climbing or diving), and your lifestyle habits (like smoking or drug use).

But your occupation can also be a factor if your job involves risky activities or is in a controversial industry, like marijuana.

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Which jobs can affect life insurance rates?

Each life insurance company has its own underwriting guidelines, including its own occupational ratings.

Jobs with a high degree of risk will almost always result in extra fees, but the amount of those fees will depend on the insurer. An advisor from an independent insurance broker like Policygenius can help you choose the company who will be most favorable to your profile. It’s also possible you could be assigned a table rating, which would increase your premiums a certain percentage over the standard rating.

Common jobs that require additional fees or table ratings include:

  • Aviation jobs
  • Building and construction jobs (particularly bridge, structural iron workers, tower workers, and roofers)
  • Electric power line construction workers
  • Municipal and volunteer firefighters
  • Fishing industry workers
  • Law enforcement workers
  • Bartenders
  • Lumber industry workers
  • Mining and quarrying workers
  • Oil and natural cash 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 questions about your work, including your activities, tasks, working environment, and more.

Marijuana industry jobs and life insurance

Currently in the U.S., it is not possible to purchase life insurance from any of the major life insurance companies if your occupation is in the marijuana industry — even if the business is legal in your state.

This is because marijuana is still illegal at the federal level, so processing money from businesses in the industry requires separate accounts and reporting and is still very fraught for many businesses, including insurance companies. It’s possible and likely that as the marijuana industry grows, insurers will follow suit and offer workers policies, but insurance industry has traditionally been very conservative and slow to change.

In the meantime, you may be able to find a smaller company who can offer you a policy if you’re in the marijuana industry.

Read more about life insurance for marijuana users.

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How your job can affect your life insurance rates

To get the best rates (often called preferred best) or second best rates (often called preferred), your job cannot have any hazardous duties. Each carrier has its own definition of “hazardous”, but generally, it means anything associated with an increased risk of injury or death: diving, mining, firefighting, high-rise construction.

If your job does include hazardous duties, you can be quoted standard rates, but depending on your job and the life insurance company, you could be charged extra flat fees — for example, $2.50 to $7.50 per $1,000 of insurance coverage per year.

That means 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.

How jobs can affect life insurance riders

There are a number of additional coverages you can add on to your life insurance policy through riders. Some riders that require additional underwriting.

One of these types of riders — 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 offer it to people who have a high likelihood of becoming disabled and being unable to work

Each company has their own list of occupations that cannot purchase this coverage, and many occupations, including most self-employed jobs, are only considered on a case-by-case basis.

We recommend a separate long-term disability plan for this type of income protection, which offers more robust coverage and is often cheaper than adding a disability income rider, and is available to a wider variety of occupations.

Read more about disability insurance.

How to save on life insurance if you have a high-risk occupation

There are a few things you can do to ensure that you are getting the best possible rates:

1. Work with an independent broker

If you have a high-risk job, the best thing you can do to ensure you’re getting the most affordable premiums is to work with an independent broker.

When you work with an independent broker like Policygenius, our advisors are familiar with the underwriting guidelines of many insurance companies, and will be able to recommend the carrier who can give you the best rates.

2. Reapply or ask for reconsideration

Once you have your policy, you may be able to get lower rates if your job duties change through a process called reconsideration. You’ll need to have your policy for at least a year, and each insurer treats reconsideration differently. You can also reapply for new quotes if your job changes.

Read more about the process of reconsideration and reapplication.

3. Pay your premiums annually

By paying your premiums annually instead of monthly, you can save between 2% and 8% on your premiums, depending on your insurance company.

Further reading

Understanding how life insurance rates change by age

The cost of life insurance can increase by as much as 12% each year you put it off. See real life examples here.

Read

How does the underwriting process work?

Life insurance rates are set largely based on the results of the underwriting process. Find out what exactly carriers look for.

Read

Should you pay my life insurance premiums annually or monthly?

How often you pay your life insurance premiums can have a big impact on how much you spend on your policy.

Read

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.