Life Insurance and Diving

[NSMEDIC]

My wife and I after having our first child recently decided to get life insurance. Now being our agent has been dealing with my wife's family for years and they are neighbors of course we strike up just polite conversation and say we are divers. Well now I wish we never said it. My wife is O/W where I'm PADI Rescue. The problems that we are going through with the underwriters is retarded..we had to give my 8 year history with diving..and how much diving we are planning to do..it's crazy!! For a sport that is supposed to be safer than golf!! Has anyone else ran into these problems??

 

[spectrum]

Hang in there... If the history and intent demonstrate that your intentions are purely recreational then they will probably not care. They need to go through the fact finding.

If you intend to take up a technical specialty find out what the restrictions are post issue. After a few years you are usually free to evolve.

Get sound local advice on this.

Pete

 

[bobthediver100]

I had the same problem a few years ago. State Farm was real tough but American General had a questionaire with good, well thought out questions. I filled out the questionaire and they were happy. They were concerned if I was exceeding the sport limits. My answers were good enough.

 

[Beachlover]

My premium almost doubled when I told my ins. that I was a diver.My agent tried to get me to say that I only dived two or three times a year, that way my premium would be much cheaper.I chose to be honest and pay the higher rate.I now have piece of mind that should I ever die while diving (god forbid) my wife and daughter will receive the money from my policy.If I had chosen to lie about how often I dive like my agent wanted me to do and then had a diving accident and died, they could deny the money to my family, and that would simply have not been worth doing.My family means everything to me, and honestly, the total cost of my insurance is really pretty reasonable.Don't jeopardize your family for a few extra dollars.Hopefully you or I will ever have to "claim" our policy.Good luck& good diving to you!

 

[Valwood1]

Beachlover gave good advice to everyone about the lack of wisdom in misrepresenting things on a life (or other) insurance application. It's actually worse than you stated, though. For example, if you misrepresent your diving history to get a lower rate, and then die from a car accident within the contestable period, there's a good possibility that the insurer will rescind the policy, and pay only a return of premiums paid, even though the cause of death was unrelated to the matter being lied about. There have been cases on that point where a person misrepresented his smoking situation.

If your agent tells you to lie on an application, you should get another agent.

 

[cruiser]

A professional couple, friends of mine, don't tell anyone in their business circles that they're divers. Their diving buddies know it, of course, but no one else.

 

[Gilldiver]

Joel Silverstine from TDL posted this over on The Deco Stop a while back. He used to be a high end agent and knows the buisness.



Life insurance companies are in the dark when it comes to understanding the risks of diving. They use statistics that are old and jaded. However, you need to appreciate where they come from as well. When you ask a company to put up a million bucks for a few pennies exchange they have the right to know what the risk is.

There are a few ways to go about this. 1. Work with a VERY good agent. I'm not talking about your third cousin on your wife's brothers side who just got into the business. Find a real pro who is your contemporary and is producing a LOT of business with an insurance carrier. They understand underwriting. They can help you.

Next. When you apply (and that is what it is, an application) make sure you qualify for the coverage on all bases BEFORE looking at the ADDITIONAL PREMIUM (non-standard rating) that WILL be charged for the diving. If you meet it all on medical, financial etc then the rating can be negotiated. Expect that the rating will be almost $2-10 bucks per thousand dollars of coverage. So while a standard life policy may be for $250k of coverage around $2500 a year the diving rider may be another $2500 a year. You need to expect that.

Next -- when you fill out the AVOCATION page on the application only respond to the questions based upon what you have done in the PAST not what you think you may do in the future. This is important. Do not give them a whole long disertation. They do NOT understand mixed gas diving, so stay clear of it. Unless you are a commercial diver, you dont list "professional". etc.

Next. Make sure your agent has handled special cases before. If he has he can make some very good progress.

The underwriting process can and will take upto 90 days before you get a decision. Then they will come back with an "offer" where you will see what the rating will be. Table 1-10. The primary company unless they are a BIG one will most likely have sold off the "risk" to another company. Most carriers will hold risk up to Table 4, after that they sell it off under reinsurance. (you dont see that part but that is what is done). Once you have the offer have the agent "challenge" the offer, go back and negotiate it down. Rember that a policy rating is pure extra cost for the risk, if the policy is cash value base this extra premium does NOT build cash value, its just rent.

Depending on your financial situation you may or may not want to pay the additional premium. That's up to you. But, it is negotiable for at least a table or two depending on how good the underwriter is.

Choose a quality company. A to A++ is best to work with. Stay clear of small companies, they are useless. Also -- you always have a better chance of negotiating the rating down when its attached to a cash value policy than when it is on a term policy. 90% of all term policies "terminate" before a claim is made on it. So the carrier really has little risk on it which is why the stuff is so cheap. But when you put a real risk on it the premium skyrockets in proportion to that term premium. So work wisely with your agent.

NEVER lie on your life insurance application if you want that coverage to be in-force during the first 2 years you have it. You drop dead, they have the right to refuse payment during those first two years if you lied. After that you are free and clear.


One more thing. should you stop diving for 12 months or more you can go back in to your company and have them re-evaluate the premium rating and in many cases have the rating removed. Should you go back to diving later, the policy is still in force and no new rating will be put on it.

When my wife took off diving for a few years to have kids we had her $1800 a year premium rating removed. ....... cha-ching......

Hope this helps you.

Regards.
__________________
Joel Silverstein, VP, COO
Tech Diving Limited - Everything Tech
TECHDIVINGLIMITED.COM -- New Playground
NAUTILUS DIVE PLANNER - Mac or PC Deco Software
DIVE THE B29 - 2008 Schedule Posted

 

[Valwood1]

A professional couple, friends of mine, don't tell anyone in their business circles that they're divers. Their diving buddies know it, of course, but no one else.

Why not tell? It's great fun to see non-divers' faces after they ask you about sharks, and you say, "Sure, I see sharks a lot. Why, one came within two or three feet on my last trip!"

 

[Rhone Man]

When I took out life insurance on the birth of my son (nearly eight years ago), I took a big jump in the premium on the basis that I was a diver (and what really irked was that I was only diving every few months). I read somewhere that more people die diving than other sport except spelunking (caving). Whether it is true or not, the actuaries must have read the same report.

Someone also told me recently (not sure if this is true or not though), that all that matters is if you are a diver at all. The fact that you are an occasional weekend diver, a regular ice diver, or a hard core technical diver, the same box gets ticked. From my limited experience of underwriters, that sounds about right.

The only advice I give people (speaking as a lawyer who used to act for insurance companies) is never, ever be tempted to lie or mislead on your life insurance documents. Because if you die, they will comb through that doc and look for reasons to void the policy for misrep and shaft your relatives. Always over disclose.

 

[Valwood1]

Someone also told me recently (not sure if this is true or not though), that all that matters is if you are a diver at all. The fact that you are an occasional weekend diver, a regular ice diver, or a hard core technical diver, the same box gets ticked. From my limited experience of underwriters, that sounds about right.

The above is partially correct, but not fully so. The blurb from Gilldiver is pretty accurate; I do think that, in most situations, the agent's ability to "negotiate" is pretty limited -- but might be better on a very large case ($5M+ insurance, or $50k+ annual premium). While companies are in business to issue policies (though it may not seem like that sometimes), they're not going to bend very far on a $1M term policy with a $1k annual premium.

It is true that any diving will disqualify someone from, usually, the top two "super-duper-preferred-wonderful" rates that are often quoted for term life insurance by the term-life-oriented companies; of course, so will blood pressure (like, 135/85), too many traffic tickets, a parent with a heart condition or cancer beginning before age 60, and a lot of other things that seem insignificant (the exact list varies by insurance company).

Oddly, some of the very high quality insurers are much more liberal in their underwriting, and have no concern about recreational diving. The rules change considerably, and premiums increase considerably, if doing technical diving. Most companies' applications will ask where you dive, how often you dive and how deep you go.