Life Insurance for a SCUBA Diver

[samcvic]

Well I am starting to grow up. We have our first kid on the way and I've decided to invest in some life insurance.

This is my first foray into this industry and I don't want to do anything rash. One question that I have noticed is whether or not you are a diver. Now I assume that if you answer yes, they try and sell you a higher priced policy.

As divers, what do you'll answer?

Also if you have any suggestions/recommendations, I am all ears

 

[DeputyDan]

premiums but not pay off at collection. You committed fraud.

Find a different carrier if you must but answer truthfully.

Also, you need to look at your whole financial picture - don't just buy a policy. Talk with a financial planner or two and get some advice on what to do.

Remember there are two kinds of planners - product based and fee based.

Product based gets paid out of products you purchase. Fee based gets paid by you for advice presented.

You choose which is best for you. Remember you are planning for life and your childs $500 - $800 (guessimate) isn't alot to pay for good advice.


Also, its will time. You know last will and testament. You really need a will to designate your wishes regarding who will be the guardian of your child if both you and your wife pass away at the same time. Also, who controls your child's money (the life insurance proceeds) when your are both buried?

Its gets more complicated..

DeputyDan who is really a CPA and not a deputy.

 

[GlockDiver]

I too cannot stress how important it is to have a will. Trusts are good and well, but they are not substitutes for a well written Will.

Don't buy one of those DIY Will kits. Sit down with a good attorney and do it right. Also don't forget to review it with said lawyer every few years.

Aside from that, you know rule #1 of life insurance policies. Once you get one, don't ever cancel it.

 

[pasley]

samcvic once bubbled...
One question that I have noticed is whether or not you are a diver. Now I assume that if you answer yes, they try and sell you a higher priced policy.

As divers, what do you'll answer?

Also if you have any suggestions/recommendations, I am all ears

An honest answer is the only answer. The date your dive card was issued is an easy matter to check. As has already been pointed out, if you are not honest, then you will pay premiums but they will not pay off. They do call that fraud.

Now about the premimums. My insurance company does not up the premiums if you are a diver at the time of taking out the policy, they simply will not write a policy on you. In short, they would not insure you. Their choice.

Diving is an "Adventure" sport and as such considered high risk.

 

[samcvic]

I do understand that if you answer "no" then they would not pay out in the case of a death by diving. I guess I would have thought that a lot of people would rather pay the lower premiums knowing in advance that if a scuba death occured it would not be insured.

I wonder if there is a writer out there that would pay a certain amount out if death were anything but an "adventure" sport, and if the death was during scuba then it would pay a small amount.

So in effect if you died diving your were actually paying a higher premium?

 

[Knavey]

pasley once bubbled...


An honest answer is the only answer. The date your dive card was issued is an easy matter to check. As has already been pointed out, if you are not honest, then you will pay premiums but they will not pay off. They do call that fraud.

Now about the premimums. My insurance company does not up the premiums if you are a diver at the time of taking out the policy, they simply will not write a policy on you. In short, they would not insure you. Their choice.

Diving is an "Adventure" sport and as such considered high risk.

Diving is an adventure sport is BS...statistics show its safer than bowling. How many policies ask you if you are a bowler?

 

[Northeastwrecks]

Regardless, they do ask. And it is fraud to lie. In fact, I'm not entirely sure that they would pay out if you lied about diving and died in an unrelated accident (how they would find out is another matter).

I ran into this issue. I had a policy that was in force before I started diving. After our daughter was born, I decided to increase it and convert some of the policy to whole life.

I accurately answered the diving questions. When the company found out that I dive below 100 feet, they rated me. As a result, there was a charge of $5.00 per thousand dollars of coverage, in addition to the base cost of the policy. A term policy would cost over $4,000/yr. To make matters worse, activity exclusions, i.e., payment limited to premiums if I die diving, are prohibited by law in Connecticut.

In the end, I kept my existing policy and added a new whole policy. I also convinced the company to issue the new policy in my state of residence, Massachusetts, because Massachusetts doesn't bar activity exclusions.

As a result, if I die diving, my heirs get less.

If the increase is not huge, I'd pay it. Otherwise, consider whether you can get the exclusion. You could then consider purchasing a term policy from DAN. Their policies don't have the exclusion. However, its expensive to but large policies.

This is not legal advice. It's annecdotal. I'm probably not admitted in your state. Check with a local lawyer for real advice. This is not a joke.

 

[pasley]

samcvic once bubbled...
I do understand that if you answer "no" then they would not pay out in the case of a death by diving.

Acutally, if they figure out that your were not honesto on the application, they will not pay out period, regardless of the cause of death. Translation, a person says ot to the SCUBA question and then is killed in a robbery. Now we all know insurance companies are prone to look for reasons to not pay off. If they investigate (depending on how much, they may and keep people on staff to do so) and find you WERE a SCUBA diver at the time of the application, then the application for insurance is fraud and they will not pay on the policy regardless of the cause of death.

I agree that diving is safeer than bowling (my other adventure sport), but preception is what counts. We are still suffering from the old Sea Hunt days of diving. Diving has gotten safer over the years, but that is not yet recognized.

Bottom line is honesty is the best policy and if they will not insure you then so be it. They may, if you are willing to be honest and ask them, issue a life policy that exempts SCUBA as an iinsured cause of death but will pay off for the other things. The insurance company could do this. They alredy have clauses for war and acts of terrorism.

 

[Drew Sailbum]

In the United States, insurance is regulated on a state by state basis. Rules in your state may vary.

For a while in college I worked in an insurance office and actually got licensed to sell life insurance in Wisconsin and Illinois. Some basic learning was required, and a few bits seemed like dirty little secrets that the insurance companies did not want the public to know.

The following apply in Wisconsin. YMMV
1. Lying on a life insurance application does not automatically void it. If you lie about your age, the insurer reduces the death benefit accordingly, but the policy still pays out.

2. The insurer has 2 years to contest inaccuracies on the application. (Exception - can contest misrepresentation of age at any time. See above.) During that time, the insurer can void the policy for any "material misrepresentation" (a lie which, if the truth had been known, would have caused the insurer to rate the policy differently or refuse to write the policy) but they must refund all premiums paid. After that, the insurer can't object. No post-claims underwriting allowed. Lies or simple inaccuracies which were not material to the underwriting of the policy cannot be grounds for voiding the policy.

By all means tell the truth on every insurance application. But should an honest mistake be made, don't fret that an insurance company will refuse to pay after you have been paying premiums for 20 years.

Without some of these consumer protections, any insurer could conduct an investigation on every claim and probably find some sort of error on a large percentage of applications.

Finally, some insurers do not rate up for scuba diving if your diving practices follow many accepted safety procedures. Some of the online term insurance companies reveal company policies on scuba diving in the fine print of the quotes. Read adn gather information before applying.

 

[5615mike]

Everyone listen up............you lie about anything on a life app and your beneficiary will get nothing.....period. Those applications become part of the policy and any misrepresentation of the facts is grounds for termination of the policy just as though it never existed. They will however return the premium. Should any red flags show up......like finding your body in 140ft of water, their investigators will find out. These people are not stupid. This is their business. They have seen it a hundred times before. Having your spouce unknowingly turn over your dive log would be a huge problem.......and I have herd about this happening......stupid, yes, but it happends.

If you dive, then answer the question. If you dive deeper than recreational diving limits then carriers are going to rate you. The reason for this is due to DANGER. Yes, what we do does have an element of DANGER not matter what you think. It is obviously more dangerous to dive in those conditions than in rec limits. If you are buying life insurance then you have to face the fact that you are doing something that has the potential for loss of life....and not like walking across the street getting hit by a bus, you know what I mean. If not then we would not all have to endure the training we do and take the precautions we do in our pre-dive. Remember, plan your dive, dive your plan. Carriers are going to rate you based on ALL the questions you answer. If you have poor health or you have poor health in your family history, you have high colesteral, you smoke, you have a familiy history of cancer........and you dive regularly deeper than 100ft.......carriers don't like this. They want more money and they have statistics to show for it........they have statistics for everything.

If you dive within rec limits then most carriers will not rate you. If everything else in your application is up to snuff then you can still qualify for prefered rates.

Anyway, you should not take just one quote. Find a BROKER, not a life agent who only represents one or two companies. Find someone who will work on YOUR behalf, not theres. There are vast differences between Life companies just like there are in all areas of insurance.

Remember, if your young, by life insurance. If you old, wish you would have bought life insurance when you were 25 and pay 5 times more for it now. That takes away from some of those toys you would like to have.