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Life Insurance
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(Serious question) Does anyone know of a life insurance company that won’t gouge me on premiums for being a climber or won’t ask? |
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Another serious question: Why do you feel you need for life insurance? Do you have a family? |
FrankPS wrote: Yep. Nothing dramatic. Just middle aged with little kids. |
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If you have a regular job with a mid-size or large employer then you may have access to an optional group life plan. They typically require some basic medical tests, but in my experience they rarely ask about hazardous pursuits, and coverage limits are usually pretty good (five times annual pay is quite common). You may also be able to buy additional accidental death coverage for a small extra premium. |
Martin le Roux wrote: Tangentially, I also receive travel insurance (emergency medical and evacuation, personal property loss) too through my employer |
Martin le Roux wrote: You may think you've "won" because you got insurance without divulging you climb. But when your survivors try and collect there may be tears.... |
Eric Engberg wrote: That's why you have to read your policy and have a printed copy of it. That written policy is a contract, so they can't put conditions in it, willy nilly. They can't make it up as they go along. |
Eric Engberg wrote: If an insurer never asks about climbing during the application process then they won't be able to deny a climb if it later turns out you were a climber. Life insurance policies aren't written that way. You may have to jump through hoops when you apply, but once a policy is issued it's quite straightforward. Basically a life insurance policy says "if you die, we pay $X", with few if any strings attached. In general, life insurers are only able to deny claims if you don't answer their questions truthfully at the time you apply. |
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I went down that rabbit hole a number of years ago. Traditional policies, that work a bit like a credit card in that you can take "loans" on your paid premiums, are expensive. They administer the medical exams and lifestyle surveys. They will write policies for climbers, you just don't get the minimum rate. If you don't die prematurely, then it becomes very expensive money, because it is easy to pay more in premiums than your policy pays in benefits (especially if you are young). If they don't ask questions, they are just charging the higher rates by default. If you stop paying, you surrender paid premiums. Term polices are cheaper, but if you don't die within the term your premiums are gone too. The work-based polices might be OK, but you never see the policy, which might be riddled with exclusions. Overall, it's a catch 22 because if you get a cheap premium, you are unlikely to die soon. This is not financial advice, but just an illustration of how one might solve the problem. Open a low fee, Roth IRA that is tied to a broad stock index (not actively managed). Deposit the maximum contribution each year ($7000, or $583/month). Historically, the market averages about 7%. After 3 years, you could have almost 25k saved, basically for free. Most polices limit payments in the initial year or two, so you would not be loosing much time in terms of a payout. I believe beneficiaries get the whole amount of a Roth IRA tax free. Also, get a leagally binding will (noterized, witnessed, etc.) and keep a list all the account info and passwords with it (marrried individuals inherent by default). Neverthelses, it will make probate easier. If you die early, your family gets the IRA balance. If not, you get a decent retirement account. If you do this at 35, and live, at 7%, you'd have about 700k in the account. |
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Tern life insurance. If they ask in questionnaire if you engage in any of the following activities ... rock / mountain climbing... answer truthfully. If you say no and die in a climbing activity, you just gave all your premiums away. They may come back to you with a more lengthy questionnaire about the nature of your climbing. The one I did was pretty detailed and was written by someone who understood climbing. I ended up with a rider attached to my policy, specifically covering climbing. It did not increase the quoted premium. I felt better for having it. Here's an interesting thing to note: you could start climbing (ie going climbing for the very first time) the day after you sign the life insurance contract, and you're covered for climbing. Weird, huh? |
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I have a term policy with American General. They did ask if I did mountaineering (I don’t), but that was it. Other risk factors I recall were activities like sky diving and bull riding (more things I don’t do). |
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Recently got term life through Prudential. They also had a climbing questionnaire that was definitely written by a non-climber. Just answered truthfully, there was a slight bump in premium over non climber but definitely ended up being very reasonable. |
jay2718 wrote: Yes; a will makes things so much easier for your family. Check your state about default inheritance. E.g. the default in Massachusetts is nuanced: nolo.com/legal-encyclopedia… |
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I got term life from state farm for roughly 50/month for 1 million dollar coverage. I'm 30 and have a kid on the way. They asked extensively about climbing and the questionnaire was clearly written by someone who knew about rock/ice/alpine climbing. I told them the truth (that I trad climb regularly). I think I got a decent deal. |
Jacob Miller wrote: Even insurance companies prefer trad climbing. They'd probably slam the door in your face if you told them you sport climbed! |
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Thanks to all who replied. All very helpful. Time to shop around a bit. |
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Term is the way to go. Stay far away from whole life or any "investment" type product. We got decent prices on 20 year term from Pruco / Prudential. Climbing and SCUBA raised the rates, but healthy, mid-30s when we bought. |
