Looking for life insurance that cover extreme sports? Find out how to get cover.
Insurers don’t want to cover excessively dangerous activities, but you don’t want to give up these pastimes or be left without cover. Fortunately, you don’t have to.
Three ways that insurers treat extreme sports
Life insurer will either:
- Some insurers will refuse to provide cover for extreme sports.
- Some insurers will include extreme sports cover, but at extra cost.
- Some insurers offer policies with inbuilt extreme sports cover.
While many standard life insurance policies will not cover you for death or injury sustained in the course of dangerous activities, there are still plenty that will. Find these by comparing policies directly, or with the help of an insurance broker or adviser.
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Common extreme sports that Australians take part in
Some of the extreme sports that you may take part in, and which can pose increased risks when it comes to injuries s, include:
- White water rafting
- Sky diving
- Free running
- Big wave surfing
- Hang Gliding
- Snow sports
Extreme sports isn’t a legal term, which means it doesn’t have a set definition and there is no clear list of sports that count as “extreme”. Your insurance policy might refer to them as “hazardous activities”, “hazardous pursuits”, “high-risk pastimes” or other similar terms. This means your insurer will often ask you whether or not you take part in specific activities such as scuba diving or mountaineering.
How much extra it will cost you to get insured for a particular extreme sport depends on how much injuries tend to cost insurers compared to other sports. This is based on two factors:
- How likely you are to suffer an injury while participating
- How severe the injury is likely to be
Football, for example, has a high risk of injury, but mostly in the form of scrapes, bruises and the occasional broken bone with no permanent damage. This makes it relatively safe and cheap to insure.
Offroad motorsports, on the other hand, are some of the most dangerous and expensive sports to insure because injuries resulting from it tend to be a lot more severe, and much more likely to result in death or permanent disability. The nature of life insurance means death and serious injury are much more expensive for insurers, particularly if they strike a younger person who hasn’t held the policy for very long or will spend a long time claiming benefits.
Life insurance application forms will usually include sections where you answer questions about your participation in extreme sports and other dangerous pastimes. Different insurers will phrase these in different ways, but you should expect questions along the lines of:
- Do you take part in pursuits involving heights? (paragliding, skydiving, hang gliding, etc)
- Do you participate in any full body contact sports?
- Do you plan on participating in any motor car, motor bike or motor boat racing?
- Do you regularly take part in any other hazardous pursuits?
More specialised extreme sports insurance policies will want to know further information about each sport you participate in, and may ask:
- About your level of experience and training
- Whether you hold any relevant certifications or licensing
- If you are a member of any related extreme sport clubs or associations
- Where and how often you participate each year
- Whether you are involved in any competitions, exhibitions or record attempts
- For any other relevant information specific to an individual sport, such as engine size, diving depths, number of successful dives/jumps/participations, and more.
Whether you are eligible for a policy and how much it costs is determined by your total risk levels. Even less risky sports are still potentially dangerous, so your insurer will want to know whether you play football, rugby or any other contact sports, and will ask about these.
Contact sports carry some risk, so will result in raised premiums or reduced eligibility. Because extreme sports in particular carry a much higher risk, they will raise your premiums by even more.
Different insurers have varying definitions of what an extreme sport is. Be aware of these differences by looking at the exclusions in a life insurance policy. These are conditions where the insurance won’t pay out. Restrictions around extreme sports will typically be found in this section of the policy.
There are too many dangerous activities and extreme sports for the insurer to be able to list them all, but they are still required to make it clear what is and is not covered. As such, you need to be on the lookout for both specific pastimes (eg. paragliding) and more general types of activities (eg. pursuits involving heights) mentioned in your insurance policy.
Yes, it’s possible. Some policies will allow you to get life insurance with an exclusion on the specific activity.
Alternatively, some policies will cover you for an additional premium. To compensate for the added risk of insuring an extreme sports enthusiast, life insurance brands will typically impose loadings to raise your premiums. Loadings are specified premium increases to compensate for particular risk factors, such as extreme sports participation.
Extreme Mike gets extreme insurance
Case study: Extreme Mike gets extreme insurance
Mike is a 29-year-old architect who plays rugby twice a week, goes big mountain skiing in Europe twice a year and enjoys paragliding, bungee jumping and skydiving whenever he can. To maintain this enviable lifestyle even in the face of potential permanent disability, Mike sort out life insurance to cover for him for these activities as well as the day-to-day risks of life itself. Unfortunately, he was having trouble finding an affordable policy. To make it easier, Mike started asking insurers to explain the costs involved.
- Playing rugby twice a week was increasing his premiums by a small amount, which he was happy with.
- His ski trips were increasing premiums by a lot, which he thought was unfair.
- Bungee jumping, skydiving and paragliding were all classified together as activities involving heights, which had been given a blanket exclusion in the policy he was looking at. They were not covered, but were not costing him any extra.
In the end, Mike spoke to an adviser and explained what he was looking for. The broker then went to different insurers and negotiated tailored policies for Mike to consider. He found the best value for money by:
- Keeping standard cover for rugby and contact sports, which he found reasonably priced and perfectly adequate
- Completely excluding snowsports so he wouldn’t have any cover, but wouldn’t pay any extra. This greatly reduced his premiums, and the difference in cover was minimal because Mike always took out travel insurance with snowsports cover when skiing
- Finding a policy that differentiated between activities at heights. He got cover for paragliding and skydiving, his two favourites, at additional cost. He got bungee jumping excluded entirely because he wasn’t doing it often enough to justify the raised premiums
Thanks to his own diligence adviser, Extreme Mike now had his very own finely-tailored extreme insurance policy. It covered the activities he needed, excluded the ones he didn’t and delivered great value for money.
Australians love getting involved in sports rather than staying on the sidelines, and the same is true of extreme sports. The popularity of extreme sports is skyrocketing, and every year more insurers are getting on board. This is good news for you because it means your options are increasing.
- Since 2005, an estimated two new skate parks are built in Australia every week.
- Between 2003 and 2011, the Australian Kite Surfing Association’s membership has quadrupled.
- In 1970 there were only 48,000 diving certificates worldwide. Now there are about 20 million.
How do extreme sports affect injuries in Australians?
The increasing popularity of extreme sports is also making its mark on injury statistics.
- Overall injuries are increasing. Worldwide, injuries in extreme sports increased by about 10% each year from 2001-2007.
- The relative odds of being injured are low. You are twice as likely to be hospitalised by touch football or a racquet sport than from extreme sports. You are four times more likely to be hospitalised from basketball, and more than eight times more likely to be hospitalised by playing soccer or Australian Rules football than participating in extreme sports.
- Higher odds of suffering a severe injury. About 13% of Australian extreme sport hospitalisations are life threatening, compared to only 5% from Australian Rules football, 4% from racquet sports, 3% from soccer and 2% from basketball.
Which sports are usually included automatically?
Most popular sports are relatively easy to cover with standard life insurance policies and will only have a small impact on premiums, if at all. These also include sports that might seem unusually dangerous.
- Some combative sports and martial arts. This applies to organised combative sports like fencing and martial arts undertaken with professional instruction. It does not include mixed martial arts which tends to be more dangerous e.g. competing in kickboxing.
- Bicycling. By the numbers, road cycling can be dangerous. The chances of being run over or colliding with a car put its risk profile well within extreme sports parameters, but its popularity as both a sport and a mode of transport means most insurers will either cover it automatically (or apply a loading on your premiums in some cases).
It is particularly difficult to get life insurance cover for some pastimes. Just like with jobs, the hardest activities to get covered are those with a particularly high risk of fatality or permanent disability, rather than the ones that are simply more likely to result in injury.
For a rule of thumb to guess whether any given extreme sport will be covered by a life insurance policy, ask yourself what’s likely to happen if something goes wrong. If the answer is death or permanent disability then you’re probably thinking of a hard-to-insure sport. These include:
- Motorsports. This includes both racing and purely recreational, both onroad and offroad. The power and speed involved in motorsports means that when things go wrong, they go very wrong. Motorsports carry particularly high rates of death and serious head injury which means the average cost of each accident is much higher than most other sports.
- Activities at heights. Skydiving, paragliding, hang gliding, bungee jumping, rock climbing and other high altitude pastimes. Once you’re high enough in the air, any fall is more likely to be fatal than not and permanent disability quickly becomes the best case scenario. Any sport that’s undertaken at more than about 10 metres up may be subject to sizable loadings to compensate for the high risk of death and injury, or is excluded entirely.
- Water sports. White water rafting, river kayaking and scuba diving are also frequently excluded for similar reasons. Water sports alway carry a risk of drowning, a danger that disproportionately leads to death, brain damage and permanent disability rather than minor injuries. Cave diving in particular is almost impossible to insure with standard policies.