Life Insurance for SCUBA divers
By James Tobin, CFP®
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Expert Review Of life insurance for SCUBA Divers
Jim Tobin, CFP®
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If scuba diving is a part of your life, you already know that it can be both a dangerous and expensive hobby.
What you may not know is that it can dramatically affect the cost of life insurance.
the purpose of this article is to provide the information necessary to obtain the best deal possible on life insurance for scuba diving in 2017.
Why Do Some Companies Charge More For Life Insurance For Scuba Diving?
The reason that insurers charge more for scuba divers is the same reason they charge more for smokers, pilots,and rock climbers: to manage their risk.
Some carriers have more of an appetite for the risks posed by scuba diving than others. However, all carriers are aware that scuba diving has inherent risks associated with the activity.
The list of risks facing scuba divers is extensive. The range from equipment malfunctions, decompression, and pulmonary trauma to living creatures and hypothermia.
Divers aren't the only ones concerned with these risks, life insurance underwriters are too.
What Factors Decide Underwriting Decisions ?
Just like life insurance in any other situation, different carriers will use different standards to make their decision. This leniency or strictness is the way that carriers manage their appetite for various risks.
While the criteria will change from carrier to carrier, the primary concerns will be around the following issues:
Experience Of Diver
There are various scuba diving certifications available through credentialed organizations that help quell underwriting fears. The lack of certification is a deal breaker at some carrier, as they will not make offers to non certified recreational divers.
Several organizations offer certifications that are broadly recognized across the globe. Among them are:
Type And Purpose Of Diving
The type of diving being done is often informed by the purpose of the diving. That is to say, "is it work or is it play?".
Occupational diving often involves first responders in a rescue and recovery function. Occupational diving can also be related to underwater dock and vessel repair.
Recreational diving tends to be more open water diving and diving done for photography opportunities. The more adventurous recreational divers are spear fishing, exploring caves, and seeking treasure.
The activities that an insurer views as most dangerous (like caves), will be reflected in the pricing of any offer for life insurance.
Depth Of Diving
The depth that you dive is important to life insurers. Some insurers do not want to make offers to recreational divers beyond 75 feet. Whereas, many carriers view 100 feet as the appropriate cut off point.
Divers who go beyond 100 feet tend to get offers that are classified as no better than standard and have a "flat extra" attached.
A flat extra is a charge per thousand dollars of insurance over and above the regular premium cost. For example a $5 flat extra would require an additional $500 per 100K of insurance per year .
Frequency Of Diving
The number of dives taken per year is yet another consideration of many carriers. The rationale being that the more times an insured is at risk the more risk the insurer faces.
Some carriers limit the number of dives to 12 while other do not limit at all as long as the dives are 75 feet or under. Divers who go deeper than that regularly face flat extra charges and/or certification requirements.
Location Of Dive
The location that the diving is to take place will also figure into underwriting calculations.
Locations where accidents have been more prevalent or where there is heightened geopolitical risk may result in a rated or declined policy.
Use Independent Agent When Looking For Life Insurance For Scuba Divers
Because independent agencies like the lifeinsurancehelpdesk.com have access to 40+ carriers you have a much better shot at getting the best deal possible.
Think about it, if you deal with an agent who can only use (or has tremendous financial incentive to use) his "home " company what are the chance you are going to get the best deal?
Not very good.
Do you think he'll tell you your better off going somewhere else?
Your Next Step
Now that you know there are significant differences in the rules each company uses when underwriting life insurance for scuba diving, you should seek out an independent agent (raising hand) and have a conversation.
Your best chance to get the best possible deal revolves around having your information ready, and your certification in order, and preferably limiting your dives to open water no farther than 75-100 ft.
Please give us a call or drop an email if you have any questions.