Life Begins Beyond Your Comfort Zone

There are many who consider life to be a daring adventure, giving up their boring desk jobs to follow their passion for adventure. But every adventure has its risks… life risk. So, what happens in that case? How can one ensure one’s financial safety while following the passion? Can a normal life insurance plan ensure it?

 In such cases, one must select the right plan considering all aspects, providing additional financial security in the future. Life insurance premium depends on types of risks. The premium charged by insurers are determined by statistics and mathematical calculations done by the underwriting department of the insurance company. The level of insurance premium charged to a policyholder depends on statistical data that exists about life history, age, profession and health.

Certain factors affect a life insurance policy and occupational hazard is one of them. But what does it mean? Occupational hazard refers to the potential risks to life or functioning of an individual, inherently associated with his occupation or work environment. Some of these hazards lead to the contraction of a disease or the loss of functionality or death through an accident. In such cases, individuals with high-risk professions such as the armed forces, pilots, engineers, miners, rescuers, construction workers have to pay more premium for life insurance because the insurer is taking an additional risk by insuring them.

Rakesh Wadhwa, Chief Marketing and Customer Officer, Future Generali India Life Insurance, says, “There is no standard definition or defined list of profession or hobbies which is considered to have adverse impact on life insurance premium. In principle, any leisure pursuit or hobby which could have adverse impact on mortality shall be considered as hazardous and may have impact on life”.

Most of the life insurers have tailor-made policies for the smooth buying and selling of insurance, and also according to the specific needs which will prove to be transparent, simple and pocket-friendly to customers. As for example, Aviva Life Insurance offers “SURAKSHA“ exclusively designed for the Armed Forces which aimed at providing financial solutions for their long and short term needs and a secure future for their loved ones with the aim to provide additional insurance, life protection, savings and retirement solutions and career opportunities  for our ex-servicemen and their  family members.

Similarly, HDFC Life offers “Shaurya” insurance solutions for Indian Defence or Armed Forces Personnel is an initiative to provide long-term non-linked life insurance plans to the defence personnel and  ex-servicemen. “Insurance companies may charge extra premium for a specific hazardous profession or hobby which a particular customer may be pursuing. The extent of extra premium shall be based on the likely impact of this particular hazardous nature on underlying mortality rate. Insurer will consider this increased mortality risk while calculating the premium rate,” adds Wadhwa.

But an individual with high-risk profession or hobby now has the opportunity to buy the cheapest life insurance plan. Life insurers charge different premium rates for certain hazardous profession and hobbies. One can research and compare premium and select the most suitable plan according to their requirements and budget. 

Disclosing facts at the time of buying insurance will help the insurer to charge appropriate premium and leave no room for repudiation at the time of claim. This will bring transparency between the insurer and policyholders.

Insurers come up with new products, in order to bridge the gap to meet the demand by providing extended cover for adventurous activities or high-risk hobbies by paying additional premium or cover under riders. These types of policies are suitable for adventure lovers and backpacker travellers. Bajaj Allianz General Insurance is the first to launch an add-on adventure sports cover in its Global Personal Accident Plan. The plan covers death, permanent total disability and permanent partial disability. Add on covers like accidental hospitalisation expenses, adventure sports benefit, air ambulance cover, children education benefit, coma due to accidental bodily injury, EMI payment cover, fracture care, hospital cash benefit, loan protector cover, loss of income due to disability from accident, road ambulance cover and travel expenses benefit. A wide range of optional cover will help the policyholder to select the suitable cover by paying extra premium to cover the risk.

Insurers decide how much coverage will cost for the life insurance plans based on one’s risk factors. The higher the risk, the more one must pay insurers have a range of mortality expectations to calculate premium according to the level of risk. All insurers have occupational manuals consisting the list of occupations esteemed to affect mortality adversely. In the event that you work in one of the listed occupations, you will probably be required to pay a higher premium. Insurers may charge a higher premium if you are in substantially high-risk professions or engage in hobbies like bungee jumping.

There is a wide range of life insurance plans available in the market before buying any plan always compare and select the right plan if one finds the policy expensive.

For instance, an individual working as a school teacher will pay lesser premium in comparison to a construction worker since the latter represents a higher risk occupational factor. In case of fraud or mis-statement or suppression of material fact, the policy shall be treated in accordance with the provisions of Section 45 of the Insurance Act, 1938. So, if your work or hobby falls under high-risk factor scale, it is advisable to buy a life insurance plan, which will provide adequate financial security at the time of unfortunate events. A price tag on honesty will rescue the policyholders or nominee at the time of claim.

Therefore, it is always advised to disclose personal information like past and present health conditions, present profession or hobby, habits like drinking or smoking as it can  help to accurately calculate the premium and enable a hassle-free settlement at the time of claim.