Does your job affect your life insurance?

Does your job affect your life insurance? It may seem like an odd question. After all, we often think of life insurance as personal and separate from our work, but the reality is that one’s chosen profession can impact their coverage meaningfully. 

Insurance companies will classify some jobs as more “hazardous” than others, and those individuals may pay more for a policy or have exclusions where it won’t even pay out if they die while employed. 

Knowing how life insurance works and its implications for your financial well-being is essential to making an informed decision when choosing a policy. In this post, we’ll explore this concept in more detail and discover what you need to consider when exploring life insurance options.

Why does occupation affect life insurance?

Does your occupation affect your life insurance premiums? To put it simply, yes. Life insurance companies look to actuarial tables to calculate the probability of each individual dying at any given age, and they use this information to determine the cost of life insurance. So if they decide your occupation puts you at a higher risk of dying earlier than expected, they may increase your occupational life insurance premium accordingly.

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How does your job affect life insurance rates?

Your occupation directly impacts how much you’ll pay for life insurance. For example, hazardous jobs, like high-rise construction, fishing, or mining, come with an added fee that ranges from $2-$5 extra per $1,000 of coverage per year. 

The money can add up quickly if you need a large policy and have been identified as having a dangerous job.

If your lifestyle or profession is not so risky but still considered high risk by life insurance companies, like a skydiver or pilot, they may offer non-standard rates, which cost more than standard rates. 

Which occupations increase life insurance rates?

As we’ve discussed, certain occupations will increase the cost of life insurance. Some of the jobs that could raise your life insurance rates include:

• Logging workers
• Aircraft pilots and flight engineers
• Roofers
• Police officers
• Fishing and hunting workers
• Refuse and recyclable material collectors
• Construction trades
• Drivers and truck drivers
• Firefighters
• Ranchers
• Agricultural managers
• Structural iron and steel workers
• Grounds maintenance workers

If you work in any of these occupations, you should expect to pay substantially more for life insurance. Underwriting guidelines vary from one insurer to another, so you can get coverage at a reasonable rate with one company and not another.

Read more: Life Insurance for Firefighters

Marijuana Industry Jobs and Life Insurance

With marijuana’s federal legal status still up in the air, major life insurance companies will not offer policies to those who work in the cannabis industry. 

Unfortunately, this means that options for providing financial security for employees’ families after their passing are severely limited. 

Although some states have legalized marijuana for recreational or medical use, mainstream insurance companies have not yet offered life insurance policies to industry workers. As such, they must look towards alternative solutions to ensure they have protection if something unexpected happens.

How Your Occupation Affects Life Insurance Riders

Riders are additional features or coverages you can opt for in addition to a life insurance policy. Life insurance riders typically cover life events that standard insurance policies don’t cover.

Depending on your job, you may not qualify for certain life insurance riders, such as a disability income rider which pays out if you become disabled and unable to work. Life insurance companies usually don’t issue this type of rider when your job carries a high risk of disability. 

That said, you can always purchase an individual disability plan or other supplemental life insurance for additional security if something unforeseen arises.

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How to Save on Life Insurance if You Have a High-Risk Occupation

If you have a job with a high degree of risk, such as working in the military or law enforcement, you might be worried about how this will affect your life insurance rates. The good news is there are ways you can still save money when buying life insurance even if you have a high-risk occupation. Here’s what you need to know. 

Ask for Reconsideration

If your job responsibilities change and you believe you might qualify for lower rates, you can apply for reconsideration. Talk to your life insurance company and explain why you believe you should receive a lower rate.

Work With an Independent Broker

If you want to make sure you’re getting the best rates, consider working with an independent insurance broker specializing in life insurance for high-risk individuals. 

They can help you identify the best life insurance companies for your unique situation and negotiate on your behalf to get the most competitive rates available. 

Shop Around

As with any insurance purchase, it pays to shop around for the best rates. Insurance companies have different underwriting criteria, and you may find one that offers more competitive rates than your current one. Be sure to get quotes from multiple companies and compare them.

Pay Your Premiums Annually

Depending on your insurance company, you can save anywhere from 2% to 5% on your premiums by paying annually instead of monthly. In addition, most insurers offer discounts if customers pay their premiums upfront, saving more money in the long run. 

When speaking with an independent broker or life insurance company representative, it’s always worth asking about available special discounts. 

Consider an Accidental Death Benefit (ADB)

An Accidental Death Benefit (ADB) plan is a type of life insurance coverage that provides much-needed financial protection for you and your family in the event of an accidental death or severe injury. (For more information, read our “Life Insurance vs. Accidental Death & Dismemberment (AD&D) Insurance: Which Is Better for You“).

It is typically less expensive and easier to purchase than permanent life insurance or any type of term life insurance, making it an excellent option for those who may not qualify for traditional plans due to an increased risk associated with their occupation.

Case Studies: Does your job affect your life insurance?

Case Study 1: John Turner – Manufacturing Engineer

John Turner, a 38-year-old manufacturing engineer employed at SteelTech Manufacturing, applied for a life insurance policy with SecureLife Insurance. However, during the underwriting process, it was discovered that John’s job involved working with heavy machinery and potentially hazardous materials.

As a result, SecureLife Insurance offered him coverage with slightly higher premiums to account for the associated risks. While John’s policy was approved, his occupation influenced the cost of his life insurance.

Case Study 2: Emily Watson – Financial Analyst

Emily Watson, a 32-year-old financial analyst working at a prominent investment firm, sought a life insurance policy through ShieldGuard Insurance. Due to the nature of her job, which primarily involved desk work and minimal physical risks, Emily was eligible for a standard life insurance policy.

Her occupation as a financial analyst did not significantly impact the premiums she had to pay, and she received coverage at a competitive rate from ShieldGuard Insurance.

Case Study 3: Sarah Reynolds – Construction Worker

Sarah Reynolds, a 45-year-old construction worker employed by a local construction company, applied for a life insurance policy with SafeCover Insurance. Given the physical nature of her job and the associated risks, Sarah’s premiums were higher compared to individuals with less physically demanding occupations.

SafeCover Insurance conducted a thorough assessment of Sarah’s occupation, considering the potential dangers and work-related hazards she encountered daily.

Case Study 4: Michael Chen – Software Developer

Michael Chen, a 28-year-old software developer at a well-known technology company, approached TechInsure Insurance to secure a life insurance policy. Due to the low physical risks associated with his job and the emphasis on mental work, Michael’s occupation had minimal impact on his insurance coverage.

He received a standard policy with affordable premiums, reflecting the relatively lower risk associated with his profession.

Case Study 5: Lisa Thompson – Firefighter

Lisa Thompson, a 40-year-old firefighter with over a decade of experience, sought life insurance coverage through RescueGuard Insurance. Given the high-risk nature of her job and the potential exposure to life-threatening situations, Lisa’s premiums were considerably higher compared to individuals in less hazardous occupations.

RescueGuard Insurance evaluated the unique risks associated with firefighting and adjusted the coverage and premiums accordingly.

How an Occupation Change Affects Your Life Insurance

While most occupations will only affect the cost of premiums slightly or not at all, certain high-risk professions may lead to increased rates or difficulty finding life insurance coverage altogether.

That said, there are still steps you can take to secure affordable life insurance, even if you have a high-risk occupation, such as working with an independent broker or asking for reconsideration.

It’s worth noting that if you start a job that is deemed risky, your insurer can’t change your rates since the underwriting process happens at the time of application.

However, if you move to a less risky job, you should contact your life insurance company and let them know. They might adjust your premiums in light of the new job change. Don’t cancel your current policy until you have been offered a new one, just in case.

Knowing how your job affects your life insurance is key to finding reliable life insurance coverage at an affordable rate, so research before committing to any policy.

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