When it comes to life insurance there are all kinds of risks that insurance companies must evaluate in determining whether or not to approve a policy application, or the level of premiums they will charge if they do. Not all of the risk factors connected with life insurance have to do with your health condition, or your previous history of health-related episodes.
There are well-known lifestyle factors, such as cigarette smoking and excessive alcohol consumption, that certainly affect life insurance premiums. Less well-known is that occupations also play a role in defining risk. Some occupations are simply more hazardous than others, and life insurance companies will adjust for the greater risk through higher premiums.
What makes an occupation hazardous?
For the most part, an occupation is deemed to be hazardous if it involves a higher level of premature death. Some occupations, such as logging and fishing, carry obviously higher risk of death due to such factors as falling trees or being swept off of a boat by rough seas.
Others aren’t particularly dangerous in the normal course of events, but are higher risk because they expose the worker to conditions that could become hazardous. Examples include truck drivers and on-the-road salespeople. The fact that you’re on the road for long periods of time increases the risk of fatalities from accidents, or even from falling asleep behind the wheel.
How insurance companies compensate for the risk of hazardous occupations
There are different ways that insurance companies measure the risk of various occupations. One way is through lists of dangerous occupations that are put out by the Bureau of Labor Statistics (BLS) and other recognized sources. In other instances, an insurance company may rely on its own internal data, that are showing a higher risk experience with certain occupations, even if they are not commonly known to be dangerous.
In the vast majority of cases, life insurance companies will approve a policy even for people in the most dangerous occupations. They will compensate for higher risk by charging a higher premium.
Some companies will charge premiums based on the occupation itself, so that there may be different occupational premium rates depending upon the career field. Other companies establish a flat rate that will apply to any occupation that is deemed to be hazardous. For example, they may charge an extra $2 to $3 per $1,000 of coverage. On a $200,000 life insurance policy, with a flat rate charge of $2 per $1,000 of coverage, the extra charge would result in an additional $400 in annual premiums.
The 10 Most Dangerous Jobs in America
According to Forbes magazine, the following are The 10 Deadliest Jobs:
- Logging workers
- Fishers and related fishing workers
- Airline pilot and flight engineers
- Roofers
- Structural iron and steel workers
- Refuse and recyclable material collectors
- Electrical power-line installers and repairers
- Drivers/sales workers and truck drivers
- Farmers, ranchers, and other agricultural managers
- Construction laborers
Some other occupations that didn’t make this list, but are nonetheless considered to be dangerous occupations are miners, off-shore oil drilling workers, firefighters and police officers.
Why group life insurance isn’t always the best option
Most occupations, including hazardous ones, offer employer-provided group life insurance to their employees. This is usually the least expensive type of life insurance, and approval is guaranteed as a result of your employment.
However, group life insurance isn’t always the best type of coverage if you work in a hazardous occupation. At best, it may function as a cost-effective additional layer of coverage.
There are problems with group life insurance, particularly as it relates to hazardous occupations:
- The amount you can obtain is usually limited
- It is employer specific, so if you lose your job, you’ll also lose your life insurance coverage
- There is an increasing trend toward employers eliminating benefits, through use of contract work and other arrangements
Obtaining your own life insurance coverage will enable you to have a base of permanent life insurance, no matter what might happen with your employer coverage. In addition, if you work in a hazardous occupation, you should have the most life insurance coverage that you can possibly afford, and the combination of an employer plan with your own private plan will help you to accomplish that goal.
Getting the best deal on life insurance when you work in a hazardous occupation
There can be a considerable variation between life insurance companies in their consideration of hazardous occupations. While it’s likely that common hazardous occupations will be categorized as such by nearly all companies, there can be significant differences in occupations that are deemed to be borderline.
For that reason, if you believe that your occupation could at all be considered hazardous, your best course of action will be to work with an experienced life insurance agent. That agent will be your key to the companies that will have the most favorable view of your occupation, and maybe even a couple who won’t classify your occupation is hazardous of all.
