What's The Connection Between Hobbies And Life Insurance Rates?

After struggling for months to know what to do about our family finances, I realized that there were some pretty big loopholes in our plan. I knew that I needed to insure our family so that I could protect our money in the event of an accident, but it was really difficult to find the perfect plan. I started talking with an insurance broker who could help, and it was amazing to hear the solid advice that he had for us. This blog is all about insuring your family by finding the right insurance policies and keeping your costs as low as possible.

What's The Connection Between Hobbies And Life Insurance Rates?

30 December 2020
 Categories: Insurance, Blog

A valid life insurance policy can be very helpful in the event of an unexpected death. Life insurance is intended to provide financial resources for surviving loved ones so that bills like the mortgage, medical expenses, and funeral expenses can still get paid. The cost of a comprehensive life insurance policy is determined by evaluating many aspects of the policyholder's life. One of these aspects is the hobbies that a person enjoys. Understanding the connection between hobbies and life insurance will help you be better prepared to secure a policy for yourself in the future.

Dangerous Hobbies

The primary reason an insurance agent might ask about your hobbies when you are applying for a life insurance policy is to determine if any of your hobbies might be deemed dangerous. Individuals who regularly engage in activities like skydiving, scuba diving, rock climbing, or motocross racing have a higher risk of being injured or killed. This means that there is a higher probability the insurance company will have to pay out your life insurance policy sooner than later. 

Dangerous hobbies create higher risk, which will translate into higher premiums for your life insurance policy.

Mitigating Factors

Insurance companies will gather supplemental information from any applicant who lists a dangerous hobby on their life insurance application. This supplemental information is designed to help identify any mitigating factors that might reduce the amount of risk associated with a dangerous hobby. You will likely be asked to provide documentation for any certifications or professional training you have completed to prepare for your hobby. Additionally, you will also need to provide information about how long you have been actively participating in your hobby.

If you have completed training and have experience engaging in your dangerous hobby, an insurance company may view these as mitigating factors that can help lower your monthly life insurance premiums.

Importance of Honesty

It is absolutely essential that you disclose any dangerous hobbies you participate in when filling out a life insurance application. Failure to disclose these hobbies could result in the insurance company denying any claims made against your policy in the future. Denied claims can leave your surviving loved ones facing a crippling financial burden, so it is in your best interest to be as truthful as possible when applying for life insurance.

Work closely with your insurance agent to learn more about how your hobbies might impact your life insurance policy over time. Contact an insurance agency for more information.