Does Your Profession Affect Your Insurance Premium? Here’s What You Need to Know?
While life insurance has become very affordable for individuals who are the primary earners of a family, there are specific parameters that affect the premiums. As insurance is risk coverage, an insurer can be wary about offering said coverage under certain circumstances. This is because pre-existing diseases, obesity and smoking may cause premature demise, obliging the insurer to pay highly for the claim.
Similarly, there are certain occupations that are identified as ‘high risk’ by insurers that can leave you in the lurch, meaning you cannot obtain coverage or end up paying a very high premium if you get the same. Therefore, if you are looking to buy a life insurance policy, you must know if your occupation can affect your premium. Here are some insights on the same in this article.
When does an occupation affect life insurance premiums?
Insurance companies consider numerous elements when determining your life insurance premium. Your line of work is one of these criteria. You’ll probably agree that some professions carry more risks than others. You can still avail of life insurance plans or buy term insurance, but your insurer will charge a higher premium if the vulnerability related to your line of work is higher.
In general, a profession or occupation is deemed riskier if there is a higher chance that the person doing it will perish due to unforeseen events. For example, consider the situation of travelling salespeople who are out on the roads each day or drivers of huge vehicles. These individuals are frequently on the move. They, therefore, have a higher risk of being injured or involved in mishaps that can turn fatal. This directly enhances the dangers associated with their line of work. It also affects the premium that must be paid when an individual with hazardous employment qualifies for life insurance coverage.
Is your occupation hazardous?
An occupation is often considered hazardous if it carries a higher risk of abrupt or premature death. For example, some professions like fishing and forestry have a higher risk of death as the environment is dangerous.
Others are hazardous because they expose a person to circumstances that could be dangerous, despite not being particularly dangerous in the normal course of events. Truck drivers are prime examples of these cases. The risk of mortality from crashes or simply from feeling tired in the driving seat increases since the person has been on the road for long periods of time.
Every insurer has a list of occupations that are thought to affect mortality negatively. Working in one of the below-mentioned professions will probably result in you having to incur more significant premiums-
- Flight engineers and aviation employees
- Armed guards and defence security
- Coal miners
- Construction labourers
- Law enforcement
- Electrical power-line repairers and installers.
Why do individuals engaged in high-risk occupations pay higher premiums?
As you have already observed, there is a higher mortality risk or the probability that persons in these vocations would pass away suddenly. How does this impact the insurance plan, then? That implies a greater likelihood that the insurance company will be required to pay death payments.
So, insurers impose a higher premium on those working in high-risk professions to compensate for this increased risk.
From the perspective of a career, a financial analyst who works for a corporation but does not travel on the job is a low-risk element. As a result, he may incur lower premium costs than others for his own life insurance policy.
Another person who frequently travels by land, sea, and air to assist in disasters and works as a rescuer indicates an elevated occupational health risk. This person will spend significantly more on a life insurance policy than financial analysts, single mothers, office workers, and others.
What are the additional premiums charged to individuals engaged in high-risk occupations?
Depending on the insurance plan, you may have to pay a different premium amount. Also, it will depend on your age, medical history, lifestyle, the type of policy you select, the add-on services you choose, and the level of coverage, among other things. You can utilise the online quote tool or a term insurance premium calculator provided by your insurer to assess the premium amount you would be required to pay.
This summarises the fundamentals of how your career influences the cost of your life insurance plan. Make sure to provide accurate information about your occupation if your insurer requests the same. In conclusion, you must buy term insurance or any other form of life insurance if you work in a risky environment and have a household dependent on your income.
Decide where your profession stands on the multifactorial risk scale by considering these factors. In addition, many other types of life insurance policies are available, so if one is too expensive, look into the others. Also, alternative periods and protection limits are accessible, allowing you to customise life insurance coverage to your budget, even if your field of work results in higher premium rates.