I’m currently working with three different Dallas area clients on life insurance policies. They’ve answered the 3 questions that need to be answered before shopping for life insurance (http://bit.ly/XDHoGu) and we’re in various stages of the application process; completing applications, reviewing options, submitting applications, and waiting for underwriting.
There’s a series of questions that are found on one page in almost all life applications. These questions deal with hobbies or lifestyle and they typically cause a few smiles, chuckles, or laughter from each client. The questions typically go something like this;
“Have you ever participated in, or within the next two years do you intend to participate in,”
- Sky Diving
- Ultralight flying
- Vehicle racing
- Scuba diving
- Mountain or rock climbing
- Competitive skiing or snowboarding
- Extreme sports
- Or other hazardous activities (just in case they missed one)
Some people, and even a few insurance agents, typically view these as “knock out” questions. Knock out questions are ones if you answer yes to any one of these, the underwriter will decline the application. That’s not true. Here’s what will happen;
- You’ll be required to fill out a supplemental application
- This can be one for the entire spectrum of activities or
- One that’s specific, for example: rock climbing or mountain climbing
- Underwriters are looking for items such as:
- Frequency of participation
- Level of difficulty
- Are you working with a guide, etc.
- What kind of equipment you use
Based on your answers, underwriting could do:
- Nothing, as in, not treat this as more than a once in a lifetime event
- They could add a flat fee of a few extra dollars
- They could tier you which means you pay more than the flat fee
- They could decline the application because that activity is outside their comfort level
The advantage of working with an independent agent is we have options that enable us to work with carriers that fit you and your lifestyle or hobbies best. Don’t hide it, let’s put it on the table and find the best solution based on that activity.
Have a question or want to share an activity or hobby you do that’s on the list? Post it in the comments section or on our Google + and Facebook pages.