Life Insurance for Extreme Sports

Engaging in action sports that push the boundaries of physical ability, speed, and height can be thrilling, but it can also make it more difficult to get life insurance.

Life insurance for extreme sports is specialized coverage designed to help people with riskier lifestyle to secure the financial future of their family.

Find out everything you need to know about life insurance for extreme sports, including how it works and its cost. 

Key Takeaways: 

• Life insurance for extreme sports covers hazardous activities commonly not covered by traditional life insurance
• Your premium rates will depend on the type and frequency of sports activity
• Shopping around and working with an experienced broker improves your chances of securing affordable coverage

Can I get life insurance if I play an extreme sport?

Yes, many people who participate in extreme sports can get life insurance, though the policies available depend on the type and frequency of activity, overall health, and other factors.

If you play an extreme sport and need life insurance, it is important you shop the market to find the best insurance provider and the best premium rate. Each insurer has its own underwriting guidelines, so there’s a good chance some providers will rate you more favorably than others. 

As an extreme sport enthusiast if you apply for life insurance, there’re four possible outcomes. 

• You are approved at rates comparable to those who do not participate in hazardous activities. 
• You are approved for a medically-underwritten policy that excludes extreme sports. This means your beneficiaries will not receive the death benefit if you die due to injuries sustained during participation in an extreme sport.
• You are approved for a policy that covers extreme sports but will have to pay a higher premium. Extreme sports enthusiasts usually receive a table rating. Depending on the level of risk you represent, your premium rate can be anywhere between 25% and 250% above the standard rate. 
• Your application for a medically-underwritten policy is turned down. In this case, a guaranteed issue policy is your only option to secure coverage. These policies have smaller death benefits and higher premiums, but the upside is that you cannot be turned down as long as you meet the age requirements. 

What is Considered an Extreme Sport?

Extreme sports are athletic activities that involve outrageous levels of risk or in which the rate of injury is high. Life insurance companies typically consider the following activities as high risk:

• Scuba diving
• Free running
• Skydiving
• BMX racing
• Scuba diving
• Base jumping
• Flying
• Hang gliding
• Big wave surfing
• Mixed martial arts

How does Life Insurance for Extreme Sports Work?

Extreme sports enthusiasts have a riskier lifestyle, and as such likely pay more for life insurance. Your exact premium rate depends on a number of factors, including: 

• The type of extreme sport you engage in most and the hazards associated with it
• How frequently you participate in your favorite extreme spot 
• Your level of experience and if you have completed any certifications
• The type of safety equipment you use

When you apply for coverage, life insurers will ask you to provide information regarding the activities you frequently engage in. It is important to answer questions included in the life insurance application truthfully.

Failure to do so could lead to coverage denial or cancellation of the policy in the future. Even worse, the insurer may refuse to release the death benefit if you die within two years of taking out the policy, leaving your dependents without the financial assistance they may need badly. 

Once the insurer has all the relevant information, it will assign you a risk health class. Depending on your risk profile, you may be approved with exclusions or at a higher rate or denied coverage. 

Types of Insurance for Extreme Sports

People who participate in extreme sports usually have access to the same life insurance options available to those who don’t engage in hazardous activities, though they may have to pay extra for coverage.  

The most popular types of life insurance are: 

1. Term Life Insurance

With term life insurance, you get coverage for a pre-agreed period. So for example with a 20-year term, if you die within the 20 years of the policy, your dependents will receive a lump sum. But if you pass after your term life policy runs out, they will not receive the death benefit. That said, most term life plans come with a guaranteed renewability clause that lets you extend the coverage at the end of the policy term without undergoing any additional underwriting. However, the insurer will increase your premium if you exercise this option. 

You can choose the term you want cover for at the time of purchase. Most experts recommend picking a term length that covers all your main financial obligations. For instance, if you will be making mortgage payments for another 17 years and have 18 years until retirement, a 20-year term life plan will be a good fit.  The length of the policy term will impact the size of your premiums. 

2. Whole life insurance 

Whole life insurance provides lifelong coverage and includes a savings element, called the cash value. But these benefits don’t come cheap; whole insurance is 10-15 times pricier than term life. However, unlike the latter, whole life insurance gives you the peace of mind that your beneficiaries will receive the death benefit no matter when you pass. 

Your policy’s cash value grows tax-deferred, meaning you will pay tax on the investment gains only when you withdraw them and not during the growing years. A portion of each premium payment is allocated to the cash value, which grows at a set rate set rate each year. Once the cash value has reached a certain amount, you can access it by taking out a policy loan or making withdrawals.

Your beneficiaries will receive only the death benefit upon your death. Typically, any unused cash value at the time of insured’s death goes to the insurer. 

You can pay whole life insurance premiums monthly, bi-annually, or annually. The annual premium payment is the most cost-effective option since most insurers offer significant discounts for making premium payments yearly. Depending on the insurer, you can pay premiums until you pass, for a limited period of time, or as a one-off payment. 

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3. Universal Life Insurance

Universal life insurance also offers lifetime insurance coverage and cash value. However, with universal life insurance, you will grow cash at a variable rate. The cash value growth fluctuates according to the market rate of the performance of the linked investment sub-accounts based on chosen investment sub-accounts.

Some universal life insurance plans let you adjust the premium payments within certain limits. As far as the price is concerned, universal life insurance is significantly more expensive than term life but not as costly as whole life. 

4. Simplified issue life insurance 

Traditional life insurance policies, such as term life, whole life, and universal life, typically require you to take a medical exam to prove insurability. If you have a serious pre-existing condition or multiple minor ones, you may not qualify for a traditional life insurance plan. If that’s the case, or if you would rather forgo the medical exam, simplified issue life insurance is an option.

It lets you skip the life insurance medical exam, with the insurer determining your insurability and premium rate on the basis of your answers to a simple health questionnaire. The downside is that these policies have limited death benefits and higher premiums. 

5. Guaranteed issue life insurance 

Guaranteed issue plans are even easier to qualify for than simplified issue policies. In fact, approval is guaranteed as long as you meet the age requirements. These policies are geared towards applicants who cannot qualify for traditional and simplified issue policies.

Guaranteed issue policies provide coverage for as long as you live, but the payout is usually capped at $25,000 or $50,000 and there’s a two- to three-year waiting period. If you die from natural causes while the waiting period is active, your beneficiary will receive a refund of the premiums paid plus interest instead of the death benefit. 

6. Group life insurance

Group life insurance policies can be either term or permanent. Since they involve no medical underwriting, you can get coverage despite poor health. The other good thing about them is that the coverage is available to you at no or little cost.

However, relying solely on a group life policy to secure your family’s financial future might not be a great idea, especially if you qualify for traditional life insurance. That’s because the death benefit is capped at one or two times your annual salary, which may not be sufficient for your family.  

How much does life insurance cost for hazardous activities?

How much your favorite extreme sport will affect the cost of your life insurance depends on many factors, such as: 

• The risks associated with that hazardous activity
• How frequently you participate in it
• For activities such as snowboarding, climbing, and skydiving, insurers will consider the altitude you gain
• Your medical history
• Your experience in the said activity and whether you have any certifications

Here are some general factors that are considered during the underwriting process for different extreme sports: 

Skydiving

• If you have skydived only once and do not intend to do it again, you will likely receive a Standard rating
• Those who regularly participate in skydiving will likely receive a Table rating or be approved with exclusions
• Those engaging in high risk jump are usually not eligible for traditional life insurance

Snow Sports

• Those who engage in recreational snow sports can get a Standard rating
• Heli-sking or other extremely dangerous winter sports may lead to a Table rating, policy exclusions, or even a denial of coverage

Climbing

• Standard rating for those who do indoor climbing, trailing, trekking, or hiking
• Possible outcomes for ice climbing or rock climbing enthusiasts include a Standard or Table rating or a denial of coverage

Scuba diving

• Amateur scuba divers qualify for a Standard rating
• Professional scuba divers will get a Table rating
• Those who like snorkeling can qualify for a Standard rating, provided they do not have risk factors such as epilepsy or heart disease

Aviation (Recreational)

• Possible insurance outcomes for pilots include getting approved with a Standard or Table rating or a denial of coverage

Motor vehicle sports 

• Depending on the type of racing and experience level, you may receive a Standard or Table rating or get approved with exclusions

How do I get Coverage for Extreme Sports?

Finding affordable life insurance for extreme sports may seem difficult, but there are several things you can do to improve your chances of success. 

Shop around

No two insurers follow the same underwriting process. So it’s possible that where one insurer may deem you as uninsurable, another may be more than happy to write you a policy. Shopping around gives you the best chance to secure the right life insurance coverage at the best price. 

Work with an independent broker

An experienced broker like Dundas Life can point you towards insurance companies that are more likely to provide affordable coverage to high-risk applicants. 

Be honest about your activities

As part of the screening process, the insurer will ask you questions about your participation in hazardous activities. You should provide detailed and accurate information, as failure to do so could lead to an immediate policy denial or void the coverage later.

What Types of Questions Will I be Asked?

If you are an extreme sports enthusiast, be prepared to answer some additional questions when you apply for life insurance. The questions will usually start with general ones and then move on to activity-specific ones.

General Questions

• Do you participate in activities that involve heights?
• Do you drive a motor bike or motor car?
• Do you participate in full-body contact sports?
• What other dangerous activities do you regularly engage in? 

Activity-Specific Questions

• For how long you have been engaging in the activity?
• What licensing or certifications you hold? 
• Do you belong to any extreme sports associations or clubs? 
• What is the location and frequency of your participation in this activity? 
• Do you participate in competitions? 

Sports-Specific Questions:

• How many times you have been scuba diving?
• How many jumps you do in a year? 
• What type of engine you use? 

Best life insurance for hazardous activities

If you are an extreme sports enthusiasts, the best type of life insurance for you will depend on your insurability and specific financial obligations and responsibilities. 

Here are some guidelines to help you secure the best coverage for your family: 

• If your main concern is to provide your spouse with income replacement in the event of your premature death, term life insurance is the best option.
• If you want a policy that pays out no matter when you pass and helps you build wealth, consider whole life or universal life insurance
• If you do not qualify for traditional life insurance on account of poor health, either simplified issue or guaranteed issue can be a good fit
• Take group life insurance coverage if available, but consider buying an individual policy on your own if you have a young family or a lot of financial obligations. 

Conclusion

Whether your favorite activity is scuba diving, skiing or motorcar racing, it is possible to get life insurance. The types of policies available to you and your premium rate will depend on type and frequency of the activity. 

Every life insurer underwrites extreme sports enthusiasts differently, so working with an independent broker who has insider knowledge about which providers are likely to rate high-risk applicants more favorably can improve your chances of success. 

Dundas Life has worked with many extreme sports enthusiasts in the past and we can help you too.  Take the first step by getting a free quote today.  

Frequently Asked Questions

How does life insurance for extreme sports differ from regular life insurance?

Generally speaking, life insurance for extreme sports has higher premiums than regular life insurance. Your premium rates will be based on the level of risk associated with your chosen sport and your experience, frequency of participation, and personal medical history. 

Does life insurance cover physical damage?

Life insurance does not cover physical injuries by default since it is concerned with providing your dependents with financial help upon your death. However, there are riders that allow you to access the part of the death benefit while still living in the event of certain injuries or disabilities. 

What is life insurance for extreme sports? 

Regular life insurance policies usually do not cover extreme sports. If you participate in high-risk athletic activities, life insurance for extreme sports is what you need. It covers hazardous activities excluded from regular life insurance plans, ensuring your loved ones are able to receive adequate financial help upon your death no matter what. 

How do insurance providers determine premiums for life insurance for extreme sports?

Apart from the usual things, like age, health, family medical history, etc., life insurers will consider the type of extreme sport you participate in, the frequency of your participation, your experience level, and the kind of safety equipment you use while determining your premium rate. 

What are my options if I’m denied life insurance for extreme sports? 

If you do not qualify for traditional life insurance because of your participation in an extremely hazardous athletic activity, don’t worry because there are still options.

You can try for simplified issue life insurance as it is easier to qualify or take out guaranteed issue life insurance, which guarantees your acceptance for coverage regardless of your risk profile. Another option is to get group life insurance cover, if available.