Rock Climbers

Rock climbers can be very interesting to underwrite for life insurance. The challenge here is to find competitive rates for somebody with what is considered to be a hazardous avocation.

In this series of articles, we will address the questions commonly asked by rock climbers when purchasing life insurance.

Rock climbers need not apply?

"I applied for life insurance in the past—why did most of the companies decline my application?"

Risk Specialization

It's important to understand how the life insurance industry works. First of all, insurance companies specialize in the risks they want to underwrite.

Just as an individual might build a financial portfolio around a particular area (such as high tech or utility stocks), life insurance companies build their risk portfolios around particular areas.

For example, some companies will cater to people with a cancer history; other companies will want business from diabetics; and still others will focus on people with a hazardous hobby such as rock climbers.

Therefore, the number one reason why rock climbers are declined for life insurance is because their broker submitted their application to the "wrong" company, meaning the company essentially wasn't interested in their business in the first place.

Rock climbers must pay more?

"The companies that agreed to cover me asked for very high premiums—why so expensive?"

Knowledge Specialization

Applying with the right company is only half the ball game. The broker must also sufficiently understand the particular risk—from the perspective of the underwriter—in order to advocate for the best rate possible.

Knowing how an underwriter considers rock climbers allows the broker to collect the most relevant information from the candidate needed for a fair assessment by the underwriter.

Moreover, if the broker does not provide sufficient information, then the underwriter will typically add an extra premium—in case the applicant turns out to be a higher risk than was originally presented.

Therefore, the number two reason for why rock climbers get rated or declined is because the broker failed to properly interview the candidate and to provide the underwriter with all relevant information.

How should rock climbers select a broker?

So far, we've looked at two key factors that rock climbers should keep in mind when selecting a broker.

First, the broker should be able to select the right companies—meaning, companies that actually want to underwrite the particular risks carried by rock climbers.

Second, the broker should possess a sufficient level of knowledge specialization about rock climbing, in order to provide the underwriter with a thorough risk profile.

If a broker can perform these two tasks for rock climbers, then it's possible to not only get coverage, but to do so at a very competitive rate! The ideal method of obtaining competitive quotes is prequalification.

Next...

Next, let's look at the rock climbing questions involved in the prequalification process.