Millions of Americans may currently have at least some misconceptions about their life insurance coverage, not the least of which is the belief that it can often be more expensive than it is in reality. However, one thing that many people might not understand fundamentally is that their everyday habits might not translate to having lower life premiums overall.
There are many risky leisure activities that people may undertake that could increase their risk and therefore boost their premiums overall, according to a report from the consumer financial advice site Nerdwallet. Perhaps not surprisingly, chief among them are rock climbing and skydiving. These are potentially dangerous undertakings, no doubt, especially for people who undertake them regularly. The more a person is involved in them, the greater the risk that they'll suffer a serious or even fatal accident, and even a large amount of training might not be enough to help these people keep their costs down.
The same is true of amateur pilots or even people who regularly fly with them, the report said. People who use private aircraft rather than, say, commercial flights, are 40 times more likely to get into an accident. Part of this might be due to the level of training amateur pilots have to go through - because it's not as much as many Americans may think - and also because there aren't as many safety regulations governing those aircraft overall.
Other risky behavior
One issue that might not occur to many people as being particularly problematic for life insurers is scuba diving, but here too there's more risk than most people would suspect, the report said. An average of 80 people across the country die while scuba diving every year; by comparison, only 51 rock-climbing deaths were reported by the U.S. National Parks Service from 1970 to 1990.
Finally, racing of any kind can be problematic, but boat and motorcycle racing are two of the biggest concerns here, the report said. Thousands of people die doing these things every year, and can really set off alarm bells for life insurers.
Of course, life insurance companies should always seek to educate their clients about these activities, and the ways in which they can impact premiums as well as the risks they pose to their lives. The better they can do in this area, the more likely they may be to attract more policyholders in the future.