For any adrenaline lovers seeking life insurance for extreme sports in Canada, this article is especially for you.
Definition of extreme sports
Different insurance providers may define extreme sports differently. Typically, instead of using the term “extreme sports”, insurers will use words such as “hazardous pursuits”, “hazardous activities,” or “high-risk pastimes”, etc.
While we do not have a fixed list of extreme sports, most insurers in Canada will consider the following sports activities as high risk:
- Scuba diving
- BASE jumping
- Big wave surfing
- Hang gliding
- Free running
- Bungee jumping
- Car, motorcycle, powerboat racing
- Ultralight flying
- Recreation flying
- Heli-skiing (off-track), back-country skiing
- Combat sports
- Mixed martial arts
Note: Some carriers may categorize dangerous sports into “contact sports’, “extreme sports” or “adventure sports”, etc.
Available life insurance options for extreme sports fanatics
There are two ways for extreme sports lovers to apply for life insurance:
- Getting group life insurance from the workplace: if you work on a full-time contract with a company, your company will provide you with life insurance. One perk of group life insurance by companies is that it does not offer insurance on a case-by-case basis, so everyone is eligible for it.
- Buying personal life insurance from an insurance agent or a broker: Although group life insurance is easily accessible, its death benefit is not enough to protect you against all the risks. That’s why even if you have group life insurance from your workplace, we still recommend you buy personal life insurance. The policy that you buy is personalized to your case.
What happens when I apply for life insurance from an insurance agent or a broker?
When you buy personal life insurance, the insurer will assess your application on a case-by-case basis.
Typically, extreme sports players will face one of the following four scenarios:
1. The application gets approved, and the insurance provider will provide the applicant with regular coverage
In some cases, extreme sports players can enjoy standard coverage. When it comes to assessing extreme sports, insurers often based on two criteria: the frequency that you play that sport and the level of risks that that sport may pose. If the frequency and the level of risk are low, you may be eligible for traditional coverage.
For example, suppose you only took part in an extreme sport once. In that case, the insurers may be willing to offer you a policy at a regular rate. Or, if you play soccer games, the common injuries would be bruises or broken bones rather than permanent damage or death. Therefore, you may get a cheaper policy than those who are involved in activities like scuba diving.
2. The application gets approved, and the insurance provider will provide the applicant with coverage that excludes extreme sports
Typically, insurers will agree to underwrite you. However, they will make it clear in the policy that they will not cover any risks related to the extreme sports you take part in.
3. The application gets approved, and the insurance provider will provide the applicant with coverage at a higher premium rate
If you still want to look for coverage that underwrites your extreme sports, you can ask the insurer to do so. However, you will have to pay a higher premium as a result.
Usually, the insurer will do this by including a rider in your policy. The rider names the specific dangerous activity that you participate in. The surcharge may range from 25% to 600%, depending on the policy.
4. The application gets declined
There are chances that the insurers disapprove of your application. This is because the sport that you play is too dangerous for them to cover. Also, suppose you have a previous history of severe damage due to the sport. In that case, the insurers will not agree to underwrite you.
Tips: Buying life insurance from a broker
We’d advise you to buy life insurance from a broker if you are an extreme sports player. This is because a broker will listen to your case and give you advice on which option to purchase. When buying life insurance through a broker, you don’t have to reveal your identity to the insurance company in Canada. Thereby, you can avoid having a warning flag on your application.
Among the reputable insurance brokers in Canada, you may choose Insurance Direct Canada (IDC). IDC has 15-year experience in the field, and they partner with powerhouses such as SQQ, Manulife or RBC, etc.
Common questions that you will be asked
There will be a section in the application form about your participation in dangerous activities and other hazardous pursuits when applying for life insurance. You are expected to answer general questions such as:
- Have you or do you intend to take part in any motorsports such as bike, motor car, or motorboat racing?
- Have you or do you intend to take part in any full-body contact sports such as water rafting or river kayaking?
- Have you or do you intend to take part in pursuits involving heights such as skydiving or bungee jumping?
- Do you often participate in any other dangerous pursuits?
If you answer “Yes” to any of these questions, you will continue to answer more specific questions relating to your level of experience and training, certification or licensing, participation frequency, membership to any clubs or organizations and so on.
Tips: We’d advise you to be honest when filling your application form. Don’t try to tell “half of the truth”. For example, some people haven’t played any extreme sports, but they have already planned bungee jumping next month. In this case, they still have to inform the insurer of their plan.
Please remember that any dishonesty in the application process would lead to the termination of your policy later by the insurer. Telling lies is also considered insurance fraud, and you may bear the consequences for this.
In conclusion, there are still ways to get life insurance for extreme sports enthusiasts. The insurer will assess your case individually. If you take part in extreme sports and have an intention to purchase a policy, you can consult an insurance broker like IDC to make the process easier.
Frequently Asked Questions
What are the criteria that the insurer uses to assess the risk?
Risk assessment is based on a lot of factors, such as your health conditions, smoking status, age, gender, etc. For extreme sports players, the insurer will often look at the frequency of participating in the sport and the level of danger involved.
Some people take part in dangerous activities less frequently than others, so it may be easier for them to qualify for a policy. The level of damage and injuries also matter. Some sports, such as swimming, soccer, or yoga, are considered less dangerous. They do not often result in permanent damage or death. Meanwhile, motorsports, mountaineering, scuba diving or bungee jumping are categorized as life-threatening activities.
Apart from these two, the insurers also look at other factors, such as your experience, training, license or certificate. The equipment that you use or any safety precautions that you need to take also counts.
Can I buy Accidental Death Benefit Rider along with my life insurance to cover my extreme sports?
Unfortunately, Accidental Death Benefit Rider does not cover risks related to dangerous hobbies. This rider only applies for deaths that cannot be controlled, such as car crashes, drowning or slips, etc.
Should I buy Accidental Death and Dismemberment (AD&D) Travel?
Yes, you should. AD&D is a travel insurance product that works in a similar way to life insurance. To be specific, it will give you a lump sum payout should an accident occur to you when traveling. The insurance typically covers accidental death or loss of hearing, vision or body parts due to an accident.
Are there any tips to reduce the premium rate?
You may expect some reduction in your premium rate if you have relevant training, licensing or certificates for your sport. Good equipment is also considered. Besides, if you quit your pursuits, you can ask the insurer to lower your rate.
I took part in scuba diving a year ago and haven’t played again since then. Will this affect my premium rate?
Some people are not extreme sports players, and they only take part in extreme sports once.
Suppose you only participated in a dangerous activity once and have no intention to participate again in the future. In that case, this may not affect your premium.
Tip: If you intend to take part in adventurous sports on vacation, you may consider purchasing a travel insurance policy that specially underwrites those sports.
Suppose I participate in several extreme sports. How will the insurer cover these?
The answer to this will depend on the sports that you play. In some cases, the insurer will refuse to underwrite all of these. However, there are also chances that they will cover some and exclude others. Life-threatening activities such as motorsports or activities at heights are usually excluded
I already own a life insurance policy, and I intend to participate in an extreme sport. Will this affect my premium?
As your policy is in force, the insurer cannot terminate your policy or raise the premium cost as of this. However, if the extreme sport that you intend to try is not included in your policy, the insurer will not cover any injuries or death related to that sport.
In this case, we advise you to have a look at your policy documents and see if there are any exclusions.
Is there any specialized life insurance for extreme sports lovers?
Some insurance providers do offer policies exclusively for dangerous sports, such as life insurance for skydivers. However, these insurance products often have limited coverage, and there are restrictions as well.