Insurance underwriters, those faceless beings who make the decisions behind the cost of Insurance premiums, love statistics. A major part of their role involves calculations and reviews of data that determine the likelihood of events happening to you. The kind of sobering details such as “Everyday in NZ, there are 57 new cancer cases registered and 23 deaths from cancer 1
These statistics (while not the happiest) help them to calculate the probability of something life changing occurring in our lives, and insurance is set up for the protection and preservation of a comfortable lifestyle for the remaining family members in the event of the untimely death or serious accident or illness to a loved one.
For the majority of us this statistical analysis usually means comparing our age, sex, Body Mass Index measurement and family history to see which risk category we fall into. But for some, there is additional risk to be taken into consideration. These are the people whose lifestyles put them into higher risk categories. This can either be the result of their employment and the type of work or industry in which they’re involved, while for others it is their out of work pursuits that lead to a possible increase in the cost of insurance. In some cases it can even mean not being able to get Insurance cover at all.
There are certain professions that it is expected that Insurers are unlikely to cover you, due to the extreme risks. Employment in roles such as Film Stuntmen, Wild Animal training and Bomb Disposal come with obvious risks attached, so it is not surprising that Insurers are not rushing to sign up people from those groups. But what about Marine Biologists, Wharf workers and Professional Sportsmen? For those examples, who are also uninsurable for many insurance products, the reasoning is based on historical evidence of the number of people from those professions that have suffered injuries, illness or death as a result of their work. So what do you do if you are employed in one of these dangerous roles and need to protect your family income? Well, fortunately, there are some products that will cover you for certain aspects of life’s great uncertainties and your insurance adviser should be able to offer alternatives which may afford a degree of cover to give some peace of mind, even though you may not be insured against every possibility.
The other category where a full range of insurance options may be restricted, is for those that take part in dangerous sports or pastimes. There are even specific question sections on insurance application forms for those who take part in motor sports, parachuting, diving, skiing and a raft of other adrenalin-fuelled pursuits. In other words, the lifestyle of a large number of Kiwis! While participation doesn’t automatically disqualify access to getting insurance cover, the amount of hours and type of leisure pursuit that you are involved in may lead to an increase in premiums. Before you start saying “that’s not fair, I’ve never had a serious accident”, remember that the underwriting decisions are based on the number of claims, the severity of possible injuries, and the statistical likelihood of those accidents occurring to someone involved in these higher risk activities- not your own personal history.
In fact any loading of premiums (The additional cost passed on in relation to the higher perceived risk) or exclusions are going to be due to statistical analysis and the underwriters guidelines from one insurer to the next. That means that if you have had an insurance application declined, deferred or modified because of your lifestyle with one insurer, there may still be options with other providers. Therefore, an adviser who has access to a wide range of providers is going to be able to give you the best options for your lifestyle. Remember, a parachutist always checks his gear before jumping out of the plane, a diver checks his breathing apparatus and a racing driver puts on protective equipment before a race, but the only preparation guaranteed to protect the lifestyle of your loved ones is having the right insurance.
1. Ministry of Health 2012: New registrations and deaths 2009
