While there are plenty of life insurance companies and agents out there that stick their fingers in their ears when a client starts talking about their weekend hobby. The truth is there is an affordable and prudent way to approach the subject of life insurance for those that enjoy the thrill of jumping out of a perfectly good airplane.
There is no escaping the fact that skydivers, whether recreational or insanely professional, are going to pay an additional mortality cost (flat extra) if they want to be covered for that avocation along with everything else. I think where some people get hung and and eventually just take an exclusion or bag life insurance altogether is the idea of your life insurance having to be all one way. There is this hangup about it either all covering skydiving or none of it covering skydiving. One direction ends up too expensive and the other, well, just not prudently covered.
For the truly recreational, 50 jumps or less per year, most companies are going to charge a flat extra of $2.50 to $3.00 per thousand per year. This is about as low as it gets for what companies call dangerous hobbies. That amount increases with the number of annual jumps with some companies going to $5.00 per thousand over 50 jumps and $7.50 per thousand over 100. Things start getting a little dicey when you are bailing out more than 200 times a year. This is truly recreational. No stunts. Just enjoying the scenery.
So let’s put that into perspective for a 30 year old guy whose wife has told him he is now a father and if he wants to skydive he needs life insurance to cover. He should have had it before she asked, but he’s a guy! We’ll assume great health, non smoker, good family history. Marching orders from the Mrs are to find it and don’t come home with less than $250,000.
So, you can go out and get a quote for $250,000 of 30 year term with an exclusion for death due to skydiving for around $20 a month. If you’re really brave (read that not so bright guys) you run home and tell your wife that “I’m more likely to die in a car accident on the way to the airport than from jumping. After all I have a back up chute and have never even had a close call….”. That is not only unlikely to fly (just like you, if you don’t get the right insurance), but let’s be real. She wants that insurance because she is concerned about her future if that chute tangles or doesn’t open. She doesn’t want any exclusions for anything. She will need that money, or more, to raise your children.
So what is the real cost for full coverage? We already know that the base policy will be about $240 a year. With some companies it will be slightly higher because they won’t allow a flat extra charge to be added to their best rate. I know it doesn’t make sense but it’s my job to steer you away from those companies. So, added to the $240 is, best case, $2.50 per thousand ($2.50 x 250) or $625 a year. So the total is $865 a year or about $74 a month. Just a suggestion guys. Don’t try the “that’s too expensive” argument with your bride when you spend more than that every month getting airplane rides up to 12,000 feet. Much better to budget the insurance and a few less jumps a month if you think that’s too much.
Another way to handle it might be to split the difference. Take out two policies for $125,000, one with an exclusion and the other with full coverage. Due to a higher cost per thousand below $250,000, the policy with the exclusion would be $170 a year and the policy with full coverage would be $324.50 for a total just under $500 a year, around $42 a month. If you and your spouse both believe skydiving won’t be your demise this is a plan that can provide peace of mind no matter what. If you died from any cause other than skydiving you spouse would receive $250,000 and if it was due to skydiving it would be $125,000.
Keep in mind that if you have life insurance that was taken out before you took up skydiving, you’re good to go. Because it was taken up after you bought life insurance it is “grandfathered” in for lack of a better term and you already have full coverage for all causes of death.
Bottom line. Work with an agent who has access to a lot of companies and can get the best price on full coverage. Remember something is always better than nothing.