Although scuba diving is a relaxing and inspiring activity, it can also be dangerous. DAN’s 2017 Annual Diving Report showed 228 deaths of scuba divers, most likely due to inexperience. The chance of drowning in a dive is very low, with upwards of 2.85 million scuba divers dying in the US that year. There is a risk. Due to the inherent danger, scuba divers might find it more difficult to obtain life insurance. They may also have to pay higher premiums depending on how risky they are.
Why is scuba diving important for life insurance companies?
Industry experts disagree on whether scuba diving poses a risk. Current fatality rates are one dive death for every 200,000 dives. It all comes down to the type, frequency and location of the dives. Jeremy Hallett is the founder and CEO of Quotacy. He explains that while diving can be dangerous, it should only be done in certain situations. It is quite common to go recreational diving, and insurance companies offer the best rates for those who only occasionally do so.
While recreational diving is generally safe, there are risks involved, including the possibility of getting lost or diving beyond 100 feet. The risk of diving alone is much higher than that of diving with a partner.
A life insurance company would not typically deny coverage for scuba diving. Life insurance premiums can be more costly if there is a higher chance of something going wrong than if someone does not dive.
It is important to declare that you are a diver when purchasing life insurance. Travis Price, an insurance agent, advises that you never, ever, omit any information that could be considered dangerous from an application. Insurance companies offer a contestability period. If the insurance company discovers something you didn’t disclose at the time you applied, they will only have to return your premiums in the case of your death (if you die within the first two years). The full death benefit may not be paid if the insured dies in an automobile accident.
Factors that impact life insurance due to scuba diving
Divers who apply for life insurance from life insurance companies must take into consideration a number of factors. These are the most important factors that will affect your premiums for life insurance.
- Diver experience: Life insurance companies want to know what certifications you have, and how long you have been diving.
- Your premiums will also be affected by the frequency of your dives.
- The level of risk you are willing to take: Insurance companies will be interested in your diving type. Are you able to dive beyond 130 feet? Is diving a profession or a hobby? An underwriter might also want to know the age and quality of your equipment. An insurance company needs to know the level of risk that you take while scuba diving.
- Age and medical impairments: Senior divers and those with cardiovascular or respiratory impairments might be at higher risk and may have to pay higher premiums.
If you are a frequent or regular diver, most carriers will ask you to complete a supplemental questionnaire. You may be asked questions such as:
- What number of dives have your completed within the past 24 months?
- How long was it?
- Are you planning to dive in the next 12 month?
- Which date was your last dive?
- Are you interested in competitive, salvage, deep-free, cave, night, or ice diving?
Your answers are used by underwriters to create a risk profile and set premiums. Michael Cohen CLU, President and member of Risk Appraisal Forum of the Eugene Cohen Insurance Agency, said that insurance companies could place a proposed insured in a premium class. A surcharge may not be charged to someone who scuba dives at least 35 feet once a year and never goes deeper than 75 feet. Traditional coverage may be more difficult to obtain for someone who is a professional, such as a fire/rescue crew member.
Your diving classification can make a significant difference in how much you pay for your life insurance. Sam Price, a broker at Assurance Financial Solutions says that recreational divers are eligible for preferential rates as long as they are certified to dive in groups and keep to a certain depth.
Higher premiums are associated with riskier diving. They are often added to policies for a specified period and called flat premiums by Price of AFS. If your life insurance provider covers you at standard rates, they can add $5 to the premium that you pay for every $1,000 of coverage.
A $500,000 policy could run you $2500 more. Price explains that a flat premium means that you will pay a significantly higher premium for your coverage than what a normal person would have to pay.
Divers can choose from different types of life insurance
It is up to you to decide whether or not you want life insurance. You will need to decide how much insurance you need, and whether you are buying coverage to manage wealth or plan for estate taxes. There are three types of life insurance you should consider:
Term life insurance
A term insurance is a good option for a scuba diver looking to buy a cheap, simple life insurance policy that will leave loved ones with a lump amount. You will need to select a length of coverage, such as 10, 20, or 30, and a death benefit amount. Also, name one or more beneficiaries. While your premiums will not change over the term of coverage, it is important that you note that the benefits expire once the term ends. Term premiums are generally less expensive so you may need to have a medical exam. Also, questions about your life will be asked. This option is better for divers with lower risk.
wholelife is a permanent policy that has no expiration date and offers an indefinite term with a savings component. You will have coverage for as long as you pay your premiums and keep the policy current, regardless of any changes in your health. With every premium payment you will also earn a cash value that you can access as long as your are alive. The cash value earns interest in the same way as a savings account. Whole life insurance can be more expensive than term. You may need to have a medical exam and answer questions about your lifestyle before you apply. However, coverage is lifetime. For divers who wish to expand their participation over the long-term, it may offer more flexibility.
Guaranteed life insurance
Guaranteed life insurance is a good option for young high-risk divers. It’s guaranteed, as the name suggests. Guaranteed life insurance is solely determined by your age, gender, and the amount you choose. It is virtually impossible to be denied if there is no medical exam. This policy has a maximum benefit of $25,000 and premiums can be quite expensive as the insurance company is taking on more risk. This policy is still an option if you don’t want to give too much information and still want some guarantee benefit.
Questions frequently asked
Which is the best life-insurance company?
The best life insurance company will depend on what type of coverage you are looking for and how much money you have available. There are many reputable companies that have been around for more than 100 years. These are worthy contenders for the title of best life insurance company. Get multiple provider quotes and compare to find the right company for you. To ensure that you get the best coverage, speak with an insurance agent.
What is the difference between whole-life and term life insurance?
Both whole life and term insurance have their advantages and disadvantages, depending on what you need. Term life insurance is only available for a specific time period, such as 10 to 20 years. Whole life insurance is permanent and has no expiration date. While term insurance is generally less expensive, whole life insurance can be a valuable asset that can grow in value. To determine the best type of policy for you, it’s a good idea speak to an insurance agent.