Does your job affect your life insurance?
Quick Facts
Your occupation affects your life insurance rate
People in occupations considered high-risk pay more premiums than others
If you’re in the marijuana industry, major life insurance companies won’t insure you due to federal laws
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.
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.
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.
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.
Frequently Asked Questions
What jobs are considered “high-risk” to insurance companies?
Insurance companies typically consider any job that poses the threat of harm or death high-risk. This list includes occupations like fishing, law enforcement, pilots, bartenders, construction, power line construction and maintenance, logging, and marine work.
Does income affect your ability to get life insurance?
Income does not directly affect your ability to get life insurance. However, it can contribute to the amount of coverage you are eligible for. For example, high incomes may allow you to receive more coverage from a life insurance policy than someone with a lower income.
Can I get life insurance if I work in the marijuana industry?
If you work in the marijuana industry, you may still be able to get life insurance, though it is dependent on the insurer. Unfortunately, most larger life insurance companies don’t insure employees within the industry due to their illegal status on the federal level. However, a few smaller companies may offer coverage, so it’s worth checking with them.
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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in…
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Written by
Rachael Brennan
Licensed Insurance Agent
Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi…
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Reviewed by
Brandon Frady
Licensed Insurance Agent
