What is considered “Extreme Sports”?
Most people that are engaged in outdoor activities might not consider themselves engaged in extreme sports, however, insurance companies view these activities quite differently.
Below is a non-exhaustive list of activities that insurance companies would consider “Extreme Sports”:
- Practicing Aviation (other than as a passenger)
- Scuba Diving
- Winter Sports in Avalanche Risk Area
- Backcountry skiing
- Ice Climbing
- Hang Gliding
- Car or Motorcycle Racing
What is “Extreme Sports Insurance”?
Extreme Sports insurance is another name for ” Simplified Issue” insurance. Simplified issue insurance is a type of No Medical term insurance that comes without medical exams.
Simplified issue products will have sets of questions that you will need to answer truthfully. The premiums for simplified issue life insurance will be higher than “traditional” insurance, however, depending on the activities you’re engaged in it will be much cheaper than rated traditional life insurance.
Are you eligible for “traditional” term insurance?
It would seem natural that most healthy individuals will try to apply for traditional term insurance as not only are the premiums lower but the amount of insurance you are eligible for is drastically increased.
However, the extreme sports activities that you may be engaged in (climbing, mountaineering, backcountry skiing, paragliding, etc) will usually result in two different options:1Exclusion: The insurance company will offer you traditional insurance at standard pricing with the exclusion that if you pass away from any of the related activities it will not pay.2Rating: The insurance company will give you traditional insurance with an applied rating to the pricing which will drastically increase the overall price. If you pass away from any of the related activities it will pay. Neither of those options is preferable for the outdoor enthusiast who wants to ensure that they are covered for all their adventures at an affordable rate.
How much would the rating be?
This depends on a multitude of variables such as:
- What type of extreme sports are you engaged in?
- How many of them are you engaged in?
- How long have you been doing them?
- How often have you been doing them?
- How high are you climbing?
- Are you leading or following?
- What is the difficulty of climbs?
- Do you go solo or with partners?
- Do you strictly go out with a professional guide?
- Are you a professional guide?
- Have you ever had an accident?
- Where are you engaged in these sports? (What countries)
- And more
All these factors are taken into consideration by the insurance company to determine a rating for traditional insurance.
Click Here To Get A QuoteDepending on your specific circumstances the rating for traditional insurance may be less than simplified issue insurance OR significantly more.
Should I apply for traditional insurance first?
It depends on many of the variables listed above, however, in general, we suggest applying for simplified issue insurance firstly and then having a conversation with us to see if you can qualify with traditional insurance at a lower rate.In most cases, it’s usually cheaper for an extreme sports enthusiast to get insured under a simplified issue product.
Here’s a real-life example:
An otherwise healthy 30-year-old male was looking for $500,000 term 20 life insurance to cover him for all his activities. He was engaged in rock climbing, ice climbing, mountaineering, and backcountry skiing. He regularly would lead these climbs which ranged in difficulty from moderate to hard. He had been climbing for about 5 years and spent about 30-50 days out per year doing different activities.
He went to insurance company ACB and was quoted $32/month at their standard rating.
After disclosing his outdoor sports and submitting a questionnaire entailing all his specific details, the insurance company ACB came back with a rating of $241/month.
He decided to apply for the same amount of coverage in a simplified issue product from insurance company XYC and the total premium was $82/month.
|Traditional Insurance (Before Rating)||$32/month|
|Traditional Insurance (After Rating)||$241/month|
|Simplified Issue Insurance||$82/month|
Your specific circumstances may be different depending on multiple variables, however, we recommend most outdoor enthusiasts who are engaged in extreme sports apply for Simplified Issue first. After you are approved, we can have a conversation to see if we can find you a better rate.
Will the insurance company try and find a loophole to not pay if I pass away?
This is a genuine concern that all outdoor enthusiasts share. We want to ensure that the coverage we are paying for will certainly pay to our beneficiaries in the event of our untimely death.
There Are Only Two Main Reasons That An Insurance Company Can Deny A Claim, Learn More Here.
The primary reason that some insurance companies may decline a claim from an insured dying from extreme sports usually has something to do with them lying or leaving out information on the application.
Traditional Life Insurance will ask questions regarding your sports and it may seem easier to avoid answering some of these questions on the application. Warning: Lying or intentionally leaving out information on your application can give the insurance company a reason to deny your claim.
The two Simplified Issue products that we offer as our Extreme Sports Insurance do NOT ask questions about your extreme sports. As long as you can answer “No” to all the other questions on the application then you are eligible for this insurance.
The insurance companies are contractually obligated to pay out these claims regardless of your outdoor activities as they do NOT ask any questions regarding them.
Have more questions?
If you are still uncertain and have any more questions regarding this coverage for yourself, don’t hesitate to reach out and have a conversation with us.