Rock Climbing and Life Insurance

“I applied for life insurance in the past—why did most of the companies decline my application?”

Rock climbers can be very interesting to underwrite for life insurance. The challenge here is to find competitive rates for somebody with what is considered to be a hazardous avocation.

Risk Specialization

It’s important to understand how the life insurance industry works. First of all, insurance companies specialize in the risks they want to underwrite.

Just as an individual might build a financial portfolio around a particular area (such as high tech or utility stocks), life insurance companies build their risk portfolios around particular areas.

For example, some companies will cater to people with a cancer history; other companies will want business from diabetics; and still others will focus on people with a hazardous hobby such as rock climbers.

Therefore, the number one reason why rock climbers are declined for life insurance is because their broker submitted their application to the “wrong” company, meaning the company essentially wasn’t interested in their business in the first place.

Must Rock Climbers Pay More?

“The companies that agreed to cover me asked for very high premiums—why so expensive?”

Applying with the right company is only half the ball game. The broker must also sufficiently understand the particular risk—from the perspective of the underwriter—in order to advocate for the best rate possible.

Knowing how an underwriter considers rock climbers allows the broker to collect the most relevant information from the candidate needed for a fair assessment by the underwriter.

Moreover, if the broker does not provide sufficient information, then the underwriter will typically add an extra premium—in case the applicant turns out to be a higher risk than was originally presented.

Therefore, the number two reason for why rock climbers get rated or declined is because the broker failed to properly interview the candidate and to provide the underwriter with all relevant information.

How should rock climbers select a broker?

So far, we’ve looked at two key factors that rock climbers should keep in mind when selecting a broker:

  1. The broker should be able to select the right companies—meaning, companies that actually want to underwrite the particular risks carried by rock climbers.
  2. The broker should possess a sufficient level of knowledge specialization about rock climbing, in order to provide the underwriter with a thorough risk profile.

If a broker can perform these two tasks for rock climbers, then it’s possible to not only get coverage, but to do so at a very competitive rate! The ideal method of obtaining competitive quotes is prequalification.

Rock Climbing and Prequalification

Once a rock climber decides life insurance is a necessary part of his or her financial planning, the next step is prequalification.

The goal here is to determine the best available price without submitting a formal application. This way, the rock climbing applicant will know the company, the product, and the price — all without risking a declination or a rating (higher premium) due to his or her rock climbing activities.

The prequalification process involves developing a risk profile based on specific rock climbing risk factors about which the carriers are concerned.

Of course, non-rock climbing questions are considered as well, such as current health, medical history, family health history, travel habits, and criminal and motor vehicle records. But let’s take a closer look at rock climbing questions, in particular.

Common Rock Climbing Questions

Here are some of the rock climbing questions that are asked:

  1. For how many years have you been climbing?
  2. How often do you climb?
  3. In which areas do you climb?
  4. On what type of terrain do you climb?
  5. What is the maximum height to which you climb?

From these questions, the underwriter seeks to understand the individual’s unique rock climbing risk factors, in order to most accurately assess that individual’s risk and to offer the lowest premium available.

After all, the underwriter wants your business and wants to offer his company’s most competitive price that matches your circumstances.

What if my broker doesn’t ask rock climbing questions?

If your broker has not asked you these rock climbing questions, then your unique circumstances aren’t being considered by the underwriter.

This could work against you, as the underwriter will blindly lump you together with a higher risk group of rock climbers. This translates into a higher premium for you, called a rating.

This is not the fault of the underwriter. Remember, the underwriter is acting responsibly on behalf of his company, as he’s safeguarding his company from the unknown financial risk.

If your broker isn’t asking you these rock climbing questions, then you should seek a second opinion from another broker.

How should I answer rock climbing questions?

In one word — honestly.

We advise all our clients to be open and honest about their activities. If you try to hide an activity from the insurer, then you are jeopardizing your beneficiary’s future security.

For example, let’s say we unfortunately lost you within the first two years of your policy. And let’s say it wasn’t even a rock climbing accident, but something completely unrelated such as a drunk driving accident that wasn’t even your fault. The cause of death will not prevent the insurance company from conducting an investigation before paying the claim.

The insurance investigators commonly speak to surviving family members, friends, and coworkers. You can count on them asking about hobbies and other activities. And you can count on some coworker or friend innocently and truthfully answering.

If you didn’t fully reveal your rock climbing activities on your application, then the insurer is within its rights to refuse the claim. You’ve just thrown away your beneficiary’s financial security. Please, don’t do it.