Insurance...the Life kind???

[dgschott]

I work for a major life insurance company and have had direct discussions with our head underwriter. Let me give you some things that I have learned. This is not advice in any way.

1.) If you are a cave diver you will be rated. As soon as I mentioned it to my underwriter, he recalled an underwriters conference a few years ago where they disccused Steve Berman's case specifically. His first question as soon as I mentioned cave diving was "Did you know Steve Berman". Needless to say, most underwriters do know about cave diving.

2.) While Underwriters know about cave diving, they certainly don't understand it and they don't have actuaray tables to cover it. My underwriter had dig through a lot of information to find very little, but his best guess was a flat $5.00 per $1000.00. That is a significant premium. Consider if you need $1,000,000.00 in 30 year level term, that cost would normally be approx 900.00 per year for a 32 year old. Add the flat fee and it becomes $5900.00 per year.

3.) If you had life insurance BEFORE you started cave diving, you are ok, just don't let it lapse. They must pay the death benefit as long as you didn't commit fraud on your application.

4.) If you lied on your application, there are two things that can happen. It could be considered fraud, in which the insurance company would not pay the death benefit. If you get past the 2 year incontestibility period without dying it gets a little sticky. It could still be considered fraud, or it could be considered a mis-statement. I do not recommend attempting to do this - your family may not have coverage if you were to die in a cave diving accident.

An insurance company cannot take away your coverage that you applied for if you change occupations or hobbies after the life insurance has been placed in force (as long as you didn't lie or mis-represent yourself at the time of the application) and as long as you continue to pay the premiums and don't let it lapse. I would suggest if you have term insurance to convert it to perm. insurance at the end of the term so you don't lose your insurablity.

Once again - This is not a legal representation... It is just my experience and thoughts on the subject. I hope it helps to clarify some questions.

[MengTze]

Thank you David.
Here is a question for you then. What if the questionnaire does ask about diving, but not specifically cave diving? Applicant IS a current cave diver, answers the diving pieces honestly, but does not freely divulge anything beyond what is asked. That is not lying, nor misrepresenting. The underwriter just didn't ask about cave diving.....

[OFG-1]

Introducing John's "MayPay" insurance company. Cave Diver? No Problem. Aerobatic pilot? No Problem. Skydiver? No Problem. At John's "MayPay" insurance, we accept money from everyone.

As an example, if you are a cave diver, and need $500,000 worth of insurance, no problem. After our exhaustive physical examination, blood, urine, and hair folicle testing,and mental evaluation, a 30 year old cave diver in good health can get this policy for only $199.95 per month for a 72 month closed end lease, your mileage may vary. No wait, that's John's Rent-A Car. For insurance, thats only $265.55 per month.

As you age, the prices are guaranteed to go up as a inverse square logarithmic function of e with a pre stated maximum costs of $1995.95 per week, er month.

So what if you are not a 30 year old in good health, again, at John's MayPay insurance, no problem. Lets say you are over 50, not in the best health, and still need life insurance. Then we can sell you insurance for as little as $19.95 per month per unit*. Now if you are as old as John Jones or Johnny Richards, then a higher rate will apply.

Remember, John's MayPay Insurance, licensed and registered in Santo Domingo since 2008. (You have to start some time)




* 1 unit is $26.00 of life insurance payable as a gift certificate to the shameless commerce division of Car Talk, Harvard, Ma.


Not valid with any other offers. Void where prohibited. Side effects may include headache, dizziness, nausea, STD's, elephantitus, and rectal irritation. Pregnant women, or those considering becoming pregnant, should avoid contact with most cave divers. Erections lasting more than 4 hours are considered a medical emergency, and something that Old Fat Guys dont worry about.

[dgschott]

Good question. When the underwriter looks at the application they will see you indicated you are a diver and will ask you to give detailed information. Usually they will call or write and ask what kind of diving, depths, and how much diving you do. You will most likely be rated, with the caveat that some insurance companies will not rate for what they deem to be 'recreational diving' which usually has a depth limit. I have seen depth limits from 50 to 120 feet as a recreational diver without rating. If you answer all the questions correctly, they issue the policy without doing thier homework, it is on the insurance company.

Thank you David.
Here is a question for you then. What if the questionnaire does ask about diving, but not specifically cave diving? Applicant IS a current cave diver, answers the diving pieces honestly, but does not freely divulge anything beyond what is asked. That is not lying, nor misrepresenting. The underwriter just didn't ask about cave diving.....

[Cantey]

Thank you David.
Here is a question for you then. What if the questionnaire does ask about diving, but not specifically cave diving? Applicant IS a current cave diver, answers the diving pieces honestly, but does not freely divulge anything beyond what is asked. That is not lying, nor misrepresenting. The underwriter just didn't ask about cave diving.....

not 100% positive on this but I am taking an insurance course right now, and thought I would chime in. It says in our notes that a material misrepresentation is: "a statement that would have caused an insurer to deny application or issue on different terms." It was also noted on the same slide that its not limited to false statements, it can be found that material misrepresentation extends to "not telling the entire truth."

I am no expert here, but I will clarify with my instructor...I am guessing in a case like you spoke of it would be up to a jury if that was indeed a material misrepresentation or not. Either way, not something I would wanna take a chance on, whether my family would collect or not. We didn't go into great depth when we covered this part of the contract as its only an intro class, but I will be sure to ask next week...

[MengTze]

..... "not telling the entire truth."

..

I hear you. But not asking and thus not getting an answer does not equate to applicant 'not telling the entire truth'. Asking and only getting part of the answer does.

[Cantey]

I hear you. But not asking and thus not getting an answer does not equate to applicant 'not telling the entire truth'. Asking and only getting part of the answer does.

ah, I must have read your post fast...a little bit tired right now. So what you are saying is if they don't even ask at all...right? I would have to agree with you there, its not like you should just come out sand say you dive at all...its their problem if they don't even ask. Chances are though, I bet on the application that "Do you scuba dive?" is right next to "Do you skydive?"

[dgschott]

Every app I see has it on the 'Hazardous Activities" question..... Say yes. If they ask you more, then answer truthfully.

ah, I must have read your post fast...a little bit tired right now. So what you are saying is if they don't even ask at all...right? I would have to agree with you there, its not like you should just come out sand say you dive at all...its their problem if they don't even ask. Chances are though, I bet on the application that "Do you scuba dive?" is right next to "Do you skydive?"

[dgschott]

See attached...

Every app I see has it on the 'Hazardous Activities" question..... Say yes. If they ask you more, then answer truthfully.

[MengTze]

ah, I must have read your post fast...a little bit tired right now. So what you are saying is if they don't even ask at all...right? I would have to agree with you there, its not like you should just come out sand say you dive at all...its their problem if they don't even ask. Chances are though, I bet on the application that "Do you scuba dive?" is right next to "Do you skydive?"

I normaly does yes