Posts filed under 'skydiving'
I had a customer call today with a question about whether his in force policy would cover him in case his birthday present, a chance to sky dive, didn’t work out so well.
His policy has been in force with for 6 years and at the time he took it out he didn’t have any plans to take up sky diving and wasn’t soliciting birthday presents for dangerous hobbies. Being a prudent and cautious guy he called customer service and checked to make sure he was covered and he apparently either asked the question wrong or someone misunderstood something. The customer service agent told him that since he had answered no to the dangerous hobbies question on his application he would not be covered for skydiving.
Now, I truly believe there must have been some bad communication going on because that simply isn’t true. Even if he had a desire to sky dive at some point when he took the policy out, he would still be covered because the question asks if he has sky dived in the past two years or intends to in the next two years. Even the question understands that once the period of incontestability is over, the company doesn’t get to look back and re-underwrite anything.
Maybe it would be clearer if I work from the other end. This is how the insurance company would not have to pay. If this guy got a birthday sky dive, or he if was actively planning to take up sky diving, and he took out a life insurance policy at that time and didn’t divulge that information and died in a sky diving accident in the first two years of the policy, no death benefit. Materially misrepresenting relevant underwriting information is grounds for denial of a claim for the first two years of the policy.
If you take that same scenario and he doesn’t die until the third year, the claim is paid. So, this customer with a policy in force 6 years who had no plans to jump when he took it out can do anything he wants and know that he will be covered without question.
Bottom line. Built into the premium of every life insurance policy is the assumption that habits will change and people will not remain stagnant in the place they were during the life of their policy. People who are smokers will quit and some that don’t will start. People that ride in airplanes will start jumping out and people that were passengers will become private pilots. Those things don’t impact your life insurance policy.
April 14th, 2010
I finally got my wife to look the other way while I jumped out of an airplane for my 54th birthday. She’s always so nice about asking me what I want for my birthday, and for the past 5 years I had
been telling her I wanted to try skydiving and that would be a href="http://www.mile-hi-skydiving.com/tandemEx.php">great present. She steadfastly refused, not wanting to be a party to my smashing demise on an airport runway. So, having paid for it myself and knowing that my life insurance was all current, it’s a perfect example to discuss how life insurance companies feel about you taking up risky hobbies after you already have insurance in force.
The whole thing hinges on a simple question. Were you actively planning on doing the activity when you took out the insurance? Hoping to do something at some point in the future is not actively planning. Hoping for it, dreaming about it and asking for it for your birthday don’t constitute actively planning. Having a date set to jump out of the airplane is actively planning. If you weren’t actively planning when you took out your life insurance policy, you’re covered.
A current client is a good example of this. He travels all over the world in his business and we divulged all of the places he travels or has plans to travel to on a questionnaire that went with the application. The policy was approved, but before he put it in force he called and asked, “Will this policy cover me if I start traveling to places that weren’t on the foreign travel questionnaire?” Since he doesn’t have any current plans to do so, the answer was yes.
This question has been brought up by a number of my private pilot clients. In many cases they were ready to dump life insurance policies that they had taken out prior to becoming a pilot. So my question to them was, “at the time you took the policy out, were you actively planning to start training as a pilot? Had you signed up as a student pilot?” If the answer was no, their old policy covered them. They also ask about future changes in their aviation activities. If, down the road, they get an opportunity build and fly an experimental airplane, as long as it wasn’t planned at the time the insurance went in force, they’re good to go and fully covered.
From an insurance company point of view, when they underwrite your policy there is an assumption that people with bad habits will stop them and people without bad habits will find some. I have had clients that started smoking after they had insurance in force as a non smoker. They were fully covered even if they died from a smoking related cancer death. It is not uncommon for a recreational scuba diver to take up wreck or cave diving after a while. As long as they didn’t plan on doing wreck or cave diving when they took out a policy, it’s covered.
As for me and my 54th birthday flight of fancy, I was covered. And it was awesome.
Bottom line. Insurance companies don’t assume your life will remain static after they approve your policy. Before you run out and look for new insurance because of a lifestyle change, have your policy reviewed by an independent agent. You may be covered already.
March 31st, 2009
It’s been a fascinating couple of years. I will sum it up by saying that we have helped a lot of people get life insurance who never thought they could. And what better way to celebrate the information we’ve shared and the victories we’ve had than with a shared meal, a key word salad.
Diabetes has been at the forefront of our life insurance efforts from the very start. We’ve made huge headway in finding aggressive underwriting for type 1 diabetes and type 2 diabetes. I think our strong point has been in education. There are a lot more people out there today that know what their A1c is than when we started.
I’ve been very clear about where some of the problems lie in our industry. The AARP/New York Life collaboration, on what can only be described as a sick crime against older folks, continue to offer the worst term insurance and whole life insurance in the business. They are simply not the advocate they claim to be.
I’ve stepped on some toes along the way. Selectquote and Zander Life insurance have taken exception to some of my observations. Being a Dave Ramsey fan and I think, ultimately, a reasonable person, I did apologize to Zander. In spite of Selectquote’s berating commentary, I still stand by my assertion that they are biased in what companies they offer (otherwise they wouldn’t be so easy to beat) and I still believe that Suze Orman should go back to waitressing. As to their assertion that I only use Selectquote and Suze Orman for search engine optimization, well, I don’t, even though they think I do. If I didn’t think there was better service elsewhere and more honest advertising, I would never have mentioned Selectquote.
We’ve touched on scuba diving and Prudential being a leader in great rates for recreational divers. Pru also stomps the competition on prostate cancer, sleep apnea and mild anxiety issues. While providing direction on those issues we have also been able to provide direction for those involved in skydiving and foreign travel to places where kidnap and ransom insurance is more than just a casual thought.
We’ve stayed abreast of the economic meltdown and recession that have whacked us all and tried to help people understand how best to handle their life insurance needs in these tight times.
We’ve held lengthy discussions about obesity and the impact it can have on other health issues such as hypertension or high blood pressure, cholesterol, heart disease, heart attack, stroke and cancer. We’ve discussed the risk and benefits of gastric bypass surgery as a means to avoid the life threatening side effects of being over weight.
Probably our biggest response has been from those suffering from depression and bipolar disorder. We reached a group of people that have truly been black balled in the insurance industry and we’ve been able to find some level headed underwriting and hit some major home runs for those who have the name tag but lead normal lives.
We have bared the facts behind the black eye of all black eyes in the insurance industry, the non guaranteed whole life, universal life and variable universal life policies and explained the alternatives in the permanent insurance market. There is nothing that provides greater value and peace of mind than a rock solid guarantee.
We’ve had frank discussions about business life insurance such as key man insurance and buy/sell life insurance. We did a whole series on women and life insurance. We’ve provided direction and information to private pilots that they aren’t getting anywhere else. We’ve talked about the guts of the policy when it comes to the two year suicide and incontestability clause and the accelerated death benefit and the beneficiary rights and the beneficiary issues for those who aren’t in a legal relationship such as a gay couple or an unmarried couple.
Bottom line. And the list goes on and on. We’ve tried to leave no stone unturned and no question unanswered in our quest to find life insurance for those whose mortality risk might be more challenging than average. As an independent agent it has been gratifying to have so many ways to help those who have been mishandled by the wrong agent or the wrong company. As we continue to reach out my prayer is that all who need help find it, and that more agents consider serving those who are harder to help.
March 18th, 2009
I’m often asked, after the fact, what it takes to get the best life insurance rates. While I would be hard pressed to cover everything that could be hiding in your medical records, I can provide a general rundown based on the exam, labs, family and personal history.
Generally a person can’t have used any kind of tobacco or nicotine products in the last 5 years. They test for it and while the test really won’t show anything more than a month or two old, medical records almost always indicate if a person is smoking or uses other types of tobacco. If you say no and die during the incontestability period due to lung cancer, you better figure they will be asking people who were around you prior to your death.
Family history generally holds the best rate at “No cardiovascular disease or cancer prior to age 60″ for your mother, father and full siblings. A few companies say no death prior to age 70 and a few add diabetes to the before age 60 list.
A few companies allow blood pressure treatment for their best rate. Most don’t allow it. Either way, good control is a must with 135/80 being a pretty standard benchmark. Some allow 140/80. That’s actually pretty liberal. Most healthy folks are more in the 120/75 and under range.
Cholesterol treatment is being accepted for the best rate class by more companies all the time. That being said, good control is being looked at more stringently than ever before. The old benchmark for most companies was a total cholesterol of 220 and HDL of at least 40 giving a ratio of 5 or less. Some companies are going as low as 205 and a ratio of 4.5 for their best rate now.
The only cancer history acceptable at the best rate class is one instance of basal cell carcinoma. Multiple basal cells can be OK with some companies, but any other cancer history will end your chances for the best rate class.
Your driving record counts. Most companies won’t allow more than one moving violation in the last 3 years and yes, they will pull an MVR and check. Best case for the best rate would also include no reckless driving, DUI’s, license suspension or revocation in the last 5 years. Many companies are more stringent on the DUI topic.
Private pilots can only get the best rate from a few companies and they generally have to be well qualified. Instrument rating and enough total hours and annual hours to be considered experienced is a must.
Hazardous activities is kind of a crap shoot. Scuba diving can be ok if you aren’t going below 100′. Skydiving never gets the best class. Rock or mountain climbing, car or motorcycle racing and extreme sports will almost always bump you out of running for the best rates.
The last of the general underwriting guidelines is build. All companies have height/weight charts that they use and for the most part they run pretty much the same. Using my height of 5’10″, a sample of weights for best class are American General at 195, Banner at 196, Genworth at 193 and probably the most generous is Prudential at 202.
Bottom line. They don’t just ask how you’re feeling and give you a policy at the best rate. There are a lot of people who say these rates simply aren’t attainable, especially at older ages, but plenty of my clients receive offers in the best rate class and the oldest of those was 79 at the time.
February 17th, 2009
You’ve got some good news and you’ve got some bad news when it comes to life insurance underwriting for scuba divers.
The good news is that there are still plenty of opportunities out there for preferred plus and preferred rates for those recreational divers who don’t go below 100′. And let’s be real, 95% of recreational diving takes place at depths above 70′, so allowing 100′ at the best rate class really covers recreational.
Advanced open water is where the real shift in underwriting has occurred. Genworth Life and Annuity used to be open to the idea of best class down to 130′ on a “case by case” basis, and Prudential didn’t make any bones about, preferred best was allowed down to that depth. Now Genworth has gone to a standard rate for those who swim below 100′ and Prudential wants to charge $2.50 per thousand dollars worth of insurance extra, but will still take a case by case look at it for better premiums.
The glint of gold in the pan for those going below 100′ is John Hancock who will still go preferred down to 120′. The only catch with John is that their minimum face amount for term insurance is $750,000.
Bottom line. Scuba will never take the hit that sky diving does, but for those advanced divers who didn’t take advantage of Genworth and Pru before, oh well!!
January 15th, 2009
Whenever I do an initial interview with a life insurance client we always touch on “avocation” questions, the dangerous hobby thing. In general the life insurance underwriter wants to know if you are actively increasing your mortality experience by having a good time.
I remember my wife grilling me about my own life insurance when I insisted on a sky diving experience for my 54th birthday. “Are you sure you’re covered?” In my case that was easy. My insurance was already in force and at the time I took the policies that I have out, I didn’t have any plans on skydiving. A distant dream maybe. Something from the “bucket list”, but no plans. In that situation, even if you take up skydiving as a regular hobby, you’re covered. The hinge question is really whether you took out the insurance knowing that you were going to take up skydiving.
Now, as for the other 80-100 folks out there that day all suited up and ready to bail out of a perfectly good airplane, they might not have been in the same situation. So what happens if you’re a skydiver and then, say, get married and have kids and feel like you really ought to be owning some life insurance? I know I harp on this a lot, but this is when you had best find an independent agent that is willing to shop it for you. Going through one of the big on line agencies or going through a local auto and home owner’s agent is going to give you a bad experience, guaranteed.
So, two ways to look at this. You can decide that there is nothing dangerous about sky diving and there are companies that will allow an aviation exclusion that includes skydiving. Think this one through carefully. They aren’t going to buy “the dive didn’t kill him, it was the sudden stop”. Also, because all of the companies I found tie the sky diving to an aviation exclusion, you also won’t be covered if you take up flying as a private pilot. You’re still covered if you’re a passenger, just not as pilot in command. Personally and professionally I don’t recommend putting all of your life insurance eggs in that basket. Consider carrying at least some portion of your life insurance with full coverage.
Full coverage as a skydiver means you will pay what is called a “flat extra” charge, an additional amount per thousand dollars of coverage per year. This will be an additional charge added to what your life insurance would cost if you didn’t do “Dangerous things”. The majority of companies charge a flat extra of $2.50 to $3.00 per thousand for recreational sky divers. So, on $100,000 you would pay $250 to $300 extra per year to be covered. One company really tries to paint you into a box with this breakout “If 50 or less jumps per year tentative $3.00 per $1,000 flat extra. If 51-100 jumps per year tentative $5.00 per $1,000 flat extra. If 101-200 jumps per year tentative $7.50 per $1,000. If over 200 jumps per year tentative $10.00 per $1,000 extra”. Essentially the more exposure the higher the cost.
So, it doesn’t hurt all that bad if you need $100,000, but what if you really need $500,000 and that flat extra is going to add $1250 per year. If budget isn’t an issue I say cover yourself completely. If budget is an issue, consider carrying two policies. One policy could have a sky diving exclusion and the other could have full coverage. If you die from anything other than sky diving, the death benefit is $500,000. If you die from the sudden stop, it’s $250,000. It may not be having your cake and eating it too, but your widow won’t be nearly as ticked as if you had completely excluded it.
Scuba diving, comparatively, is a piece of cake. If you are a truly certified recreational diver there are several companies that will hang in there with their best rate as long as you’re not diving below 100′, 130′ with one of them. You also need to resist the temptations of wreck and cave diving. Once you break the barrier into deep, wreck, cave or ice diving, hold on to your flat extra wallet.
Cliff diving? I have no idea. If you’re doing it professionally I suspect the insurance companies will freak out and charge some monstrous flat extra. If you are doing it recreationally at the lake, it will probably come down to how you answer the question on the application that says, “and any other dangerous hobbies?” If you don’t consider it dangerous the answer is no and it shouldn’t be discussed any further. I’ve never seen an application that specifically asks about cliff diving.
Bottom line. If you’re not sure if your hobbies are covered, ask a life insurance agent to review your coverage. It really hinges on when you took out the coverage and when you took up the hobby.
June 11th, 2008
If you are planning a trip to the Olympics this summer, it’s time for a life insurance checkup to make sure you are covered for foreign travel, and if you are considering increasing coverage before you go, you need to apply now.
Most life insurance you have in force will cover foreign travel as long as it was either not planned or admitted to at the time of the application. There is an assumption in all life insurance that opportunities will pop up and you should be able to take advantage of them without losing coverage. I used that very assumption last year when I went skydiving for my first and probably last time. The bucket list, you know!
If you are thinking about increasing coverage and are planning to go to the Olympics, you should act now. Make sure you have the policy in force before you go as companies aren’t real crazy about putting a policy in force when you are overseas. From a legal standpoint you are also supposed to accept, sign and pay for the policy while in the the states.
Bottom line. The good news is that there are quite a few companies that really won’t have a problem with you going to Beijing for a week or two (depending on travel warnings due to terror threats, etc). So, whether you are going to the Olympics or on an African safari, don’t wait until you’re packing your bags to decide to increase your life insurance.
March 19th, 2008
I finally got my wife to look the other way while I jumped out of an airplane this year. She’s always so nice about asking me what I want for my birthday, and for the past 5 years I’ve been telling her I wanted to try skydiving and that would be a great present. She steadfastly refused, not wanting to be a party to my smashing demise on an airport runway. So, having paid for it myself, it’s a perfect example to discuss how life insurance companies feel about you taking up risky hobbies after you already have insurance in force.
The whole thing comes down to a simple question. Were you actively planning on doing the activity when you took out the insurance? Hoping to do something at some point in the future is not actively planning. Having a date set to jump out of the airplane is actively planning. If you weren’t actively planning, you’re covered.
This question has been brought up by a number of my private pilot clients. In many cases they were ready to dump life insurance policies that they had taken out prior to becoming a pilot. So my question to them was, “at the time you took the policy out, were you actively planning to start training as a pilot?” If the answer was no, their old policy covered them. They also ask about future changes in their aviation activities. If, down the road, they get an opportunity to take up aerobatics, as long as it wasn’t planned at the time the insurance went in force, they’re good to go and fully covered.
From an insurance company point of view, when they underwrite your policy there is an assumption that people with bad habits will stop them and people without bad habits will pick them up. I have had clients that started smoking after they had insurance in force as a non smoker. They were fully covered even if they died from a smoking related cancer death. It is not uncommon for a recreational scuba diver to take up wreck or cave diving after a while. As long as they didn’t plan on doing wreck or cave diving when they took out a policy, it’s covered.
Bottom line. Insurance companies don’t assume you will remain exactly as you were when they approved your policy. Before you run out and look for new insurance because of a lifestyle change, have your policy reviewed by an independent agent.
August 13th, 2007
The discussion went smoothly. A wife looking for insurance to replace a term policy on her husband that was coming to the end of the guarantee. Good health. A little family history hiccup, but not a big deal. Then I asked about foreign travel and she said, well, yes he does travel. After a little beating around the bush it seems that her husband had become a little bored with retirement and had decided to do contract work….. kind of where ever he might be needed. He was currently in Iraq for 12 months. Wrong time to review his insurance portfolio!!
To all of you husbands/wives who have a husband or wife who is considering changing careers or taking up hobbies, review life insurance while it is still in the considering stage. Once plans are in place and commitments have been made, whatever is coming down the road will impact your life insurance.
A few examples might help clarify this. Let’s say I’ve always thought it would be kind of fun to take up skydiving, but I’ve always kept that in my someday file. If I buy life insurance and they ask me about skydiving, it’s not an issue. I have no set plans on when I might do it so it doesn’t impact my life insurance. If, on the other hand, I am scheduled to start skydiving lessons June 23, 2007, the answer is yes to the dangerous hobby question and it will impact my life insurance rates. Now, a good independent agent can minimize the impact, but it isn’t going to go away.
Like our example above, if I have always thought it would be fun, or exciting, or profitable to go for an extended stay to travel Africa, it doesn’t impact my life insurance if I have not actually started planning and scheduling or making commitments. If, on the other hand, I have started negotiating with a company to help sell water purification systems in Zimbabwe, I have to be honest about my future plans, and yes, it will likely impact my life insurance rates.
I discussed in another blog the fact that some states no longer allow life insurance companies to ask about foreign travel. Personally, I don’t see that stance lasting long. I really don’t see it growing past the 5 or so states that currently have that rule.
That’s not the point though. Review your life insurance with your agent annually. Share your “want to’s” with your agent so they can advise you at the right time. Whether it is foreign travel, skydiving, motorcycle racing or mountain climbing, after you have headed down that road is the wrong time to ask about the impact on your life insurance.
June 13th, 2007
On the way up this weekend I got the chance to talk to two pilots and three professional skydivers. One of them asked me what I do and when I mentioned that I am a life insurance agent, the questions started flying. Can I get it even though I skydive? Why do pilots have to pay so much more? How can I tell if I’m already covered with my current policy?
The bottom line was I told them that while both the pilots and skydivers were taking part in activities that a lot of insurance companies deem dangerous, not all insurance companies take the same view and many independent insurance agents have the experience to advise them in how to maximize their coverage in spite of the downsides in the underwriting.
After promising them all business cards we headed for the door. This was my first experience, a tandem jump with Nick from Mile-Hi-Skydiving in Boulder, CO. Just as I had suspected for all the years I had considered doing this, the first step was absolutely unbelievable. While I’m not sure I will make a habit of it, I would highly recommend everyone experience it at least once. Tell Nick I sent you. Contact info is at www.mile-hi-skydiving.com.
But back to life insurance. While there is no escaping the dreaded extra cost that comes with some hobbies, a good independent life insurance agent can guide you to the lowest possible life insurance quotes.
Then consider this. I don’t know of a private pilot that really believes their demise will occur while flying. After this weekend I can tell you that skydivers feel the same. So say you have a family and you really believe in the need to provide life insurance protection, but you don’t want to bust your budget. Carry two policies!
Carry one term insurance policy where you bite the bullet and pay the extra cost to cover your hobby or profession. Make it a large enough policy to have a meaningful impact on your family’s future, but not so large that it damages your ability to feed your family.
Carry another policy where you exclude aviation activities, thus keeping the cost of that policy very low.
Together they do everything you want. In the event of a death due to your hobby, your family is still left with a substantial amount of life insurance. Any other cause of death would result in the full amount of both policies being paid. Just like staggering your insurance (not putting all of your life insurance in one term length), layering your coverage around an occupation or avocation is an option worthy of study.
March 18th, 2007
