Life Insurance for High Risk Occupations
Finding life insurance for high risk occupations can be difficult, but working with an independent agent gives you leverage to make sure you get the most affordable policy that fits your needs.
Some life insurance companies will automatically decline an applicant that has an occupation that is considered to be a “high risk".
However, it’s important to note that not all life insurance companies are the same, and while one company may decline you due to your occupation, another company may completely overlook this factor and offer you an average or better rate class.
Continue reading to learn what occupations are considered “hazardous” and how JRC can you save up to 73% on your life insurance policy.
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Life Insurance for High Risk Occupations
For people who work in hazardous conditions, it’s normal to have questions about life insurance. Since this kind of coverage is not typically dictated by a federal mandate, many people who work in high risk occupations question whether it is even possible for them to get affordable life insurance. If they are able to purchase a policy, many still question what they will end up paying for coverage from a reputable company.
The good news is there are affordable life insurance options available for just about any occupation as long as the applicant is in average or better health. In addition, all life insurance companies will want to see that the client is in satisfactory financial standing and that they have dependents that are reliant on them for financial support.
It’s also important to note that coverage will be much more cost effective if the applicant is working with independent agents who understand high risk occupations and the various ways each insurance company evaluates applicants during the underwriting process.
By working with an independent agent, not only will you save money, but you will also vastly decrease the probability of being turned down for coverage.This is because an experienced agent can compare your “risk” against a multitude of different top-rated life insurance companies, connecting you with more carriers and allowing you to get the best quotes available for your particular coverage.
JRC Insurance Group has that expertise, but just as importantly, we have access to more than 50 top-rated life insurance carriers to help us match our clients to the best possible coverage for them, saving them time and money.
What Occupations are a High Risk to Insurers?
The second major question that most people have about insuring those in high risk jobs is, “What type of job makes the list?” There are plenty of occupations that could potentially be classified as risky or hazardous, but in recent years, safety procedures have lowered accidental death rates to a degree where the risk has been minimized.
In fact, some individuals who have jobs that are considered to be “hazardous” are no longer at a statistically higher risk than those in other professions. Some injury rates may place these employees in a higher risk pool for workers’ compensation, but the risk assessment formulas for life insurance coverage are different.
The people most likely to be impacted by a life insurance hazardous occupation rate are those who work in jobs on the list of the top 10 most dangerous professions based on mortality.That list is updated each year and it tends to change from year to year. New policies are quoted based on the most current research, so it is helpful to know the most recent top 10. This year’s professions include:
- Commercial fishermen
- Aircraft pilots
- Extraction workers (those associated with mineral/resource extraction from natural resources)
- Iron and steel workers
- Garbage collectors
- Farmers and ranchers
- Truck drivers and sales/driver vendors
- Power line workers and installers
In fact, some companies will overlook an occupation that other companies consider dangerous, and approve your policy at a much lower rate. This is another reason that it is in your best interest to work with an agency that shops the market on your behalf.
Generally speaking, the further down the list of hazardous occupations your job is, the less of a role it will play in the cost of your life insurance. However, it’s also important to note that there are always exceptions. We’ve had dozens of pilots that were approved at preferred or even preferred best rates.
Some clients we work with are surprised to see that occupations like firefighters and police officers don’t make the list of dangerous occupations. This is another example where there are a lot of exceptions. Firefighting is not considered to be a dangerous job, but if you are a smokejumper, getting an approval can be a challenge.
The same is true with police officers, if you are a police officer that does not receive “hazardous pay,” getting an approval is usually not an issue. On the other hand, if you are a SWAT team member, your job will most likely be considered hazardous to the insurance company you apply with.
How Life Insurance Companies Determine the Cost of Your Coverage
Most life insurance policies will charge what is called a “flat extra” for those in high risk occupations. This is an extra cost that insurance companies charge to applicants who present an additional lifestyle risk due to their occupation.
The “flat extra” rate is determined by the overall risk associated with your occupation and this risk is based on current mortality rates. The cost is usually an additional $2.50 to $5 per $1,000 of life insurance. The “flat extra” is then added to the monthly cost of your life insurance.
Here is an example of how it works:
- Just to keep the numbers easy to deal with, let’s say the base quote for insurance, before taking risk into account, is $100/month for $100,000 in coverage.
- If an applicant has a job that is in the middle of the top ten list, like a roofer or a garbage collector, then the flat extra could be as much as $2.50, depending on the company you apply with.
- This means that each month, the formula for the flat extra is: (100,000/1,000) X $2.50, or $250.
- When added to the original $100/month premium, this makes the base quote $350/month for $100,000 of coverage.
As an example, a handful or life insurance companies actually commission their own interior studies and they may be able to offer you a “standard” rate completely bypassing any additional “flat extras.” This means instead of paying an inflated rate for your life insurance, you could get approved at the same rate of an individual in average health.
Other companies, however, use only the mortality rates that are published each year. This can cause an insurance company to rank their own set of the top 10 high risk professions based on numbers that may not represent each applicant fairly. This can be problematic for some because it means that a commercial pilot may pay the same rate as a pilot that flies experimental aircraft.
Life Insurance Factors Unrelated to Occupation
As your policy is quoted, other factors will come into play that can affect your base cost. Typically, for high risk professions, these is a minority factor in determining the overall cost of the policy.In some cases, though, risk reduction is valued as a premium consideration which may offset the overall risk, leading to a lower “flat extra” for your particular policy. Here are the major areas of consideration and explanations of how they are likely to affect your life insurance hazardous occupation quote:
- Age: This is a major determining factor in all life insurance policy determinations. The older you are when you take out a policy, the higher your premiums will be. Taking out policies earlier in life and maintaining them over the years is key to keeping cost-effective coverage.
- Gender: It might seem unfair, but there is a sizable gap between the life expectancies of men and women in the United States—75.1 for men and 80.5 for women—and this makes a substantial difference when companies calculate annual chances of mortality, which is basically the key factor in determining overall costs for coverage.
- Physical Health: Your current health status, including whether you are a current smoker, is also a huge determining factor. So is your family’s medical history, especially if your immediate family has had heart disease before the age of 60.
Comparing Independent vs. Group Insurance
Some “high risk” employers are well aware of their life insurance categorization and it is fairly common for employers to offer some kind of group plan. These policies usually offer you up to $100,000 of life insurance, but for most young families, this is not enough.
These policies may seem affordable, but when you consider your age and the amount of income that you expect to earn over the course of your career, you will realize that you need more coverage. While these policies may seem inexpensive, there are some trade-offs to group policies.
Here are the top reasons why it is vital to maintain some independent coverage, even if you do opt in to an employer’s group policy:
- Group policies are tied to your particular job which means that if you lose or leave that job, the policy ends. Independent policies follow you as long as you pay on the premium. You are also covered if you go into business on your own or work as a subcontractor.
- Employers are trending towards more contracting, and less direct employment, which is leading to the elimination of these plans over time. In addition, your employer can cancel your group policy at any time for any reason.
- The amount of coverage that can be obtained from a group policy is very limited, and as we mentioned before, it’s very hard to purchase an amount of coverage that will ensure an employee’s coverage needs are met.
Benefits of Using an Independent Agent
The first thing to remember about using an independent insurance agent is that we work for you. We do not work for just one carrier; instead we price coverage from dozens of companies to make sure we find the best rate available to you (at no charge). This is important because it means we do not have a vested interest in just one carrier, but rather our job is to find the company that will save you the most money.In addition, we understand that affordability is extremely important when purchasing life insurance. We have the resources and the knowledge needed to match you with the life insurance policy that makes sense for your needs, your budget, your job, and your phase of life.
Independent agents that represent a variety of top-rated life insurance companies, like those at the JRC Insurance Group, are experts at knowing which carriers have preferential options available for certain industries. In addition, we know which companies have more or less generous flat extras for your particular profession.
We also know how to get the exact terms you want within the budget you can afford. In fact, we often speak with clients who have already been approved for life insurance and want to see if we can save them money.
Last year we worked with a client who had an occupation that was considered to be high risk. We were able to save him more than $500 per month on an identical policy that was offered to him by his home and auto insurance company, State Farm.
Our results speak for themselves, and if you are uncertain, please feel free to visit our testimonial section. After reading the testimonials from our clients, we hope you’ll see that working with an independent agent is much more cost effective than shopping for life insurance through your local “captive agent” that only represents one insurance company.
Saving money on life insurance for high risk occupations is easy, and our service is free of charge for the customer. Not only are independent agents in the best position to help you negotiate, they are also in the best position to help you determine how other life insurance companies will calculate your “risk” based on your occupation.
How JRC Can Help You find Affordable Coverage
In the end, purchasing a life insurance policy independently is the only way you can make sure your coverage is complete and meets the needs of your family. JRC Insurance Group is here to help you shop the market and save money to make sure you are getting the best rates available. We work with 63 top-rated life insurance companies and our service is free.
With a few health questions we’ll be able to shop the market to find the most affordable rates available to you, saving you time and money. Give us a call today toll free at 855-247-9555, or request a free quote online and you’ll be able to shop dozens of life insurance companies in just a few seconds.
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.