When deciding to take term insurance, you must know that there are multiple factors on which your premiums are calculated. Believe it or not, your hobbies also come into play in premium calculation. Keep reading to learn why insurers care about your hobbies and what you need to know before buying term insurance.
Life Cover Starting @ just ₹18/day*
Choose India’s Only Personalised Term Plan
Modify coverage as per your life stages & commitments
Hassle-Free Claim Settlement
99.38% Claim settlement ratio*
Smart Income Tax Savings
Save up to ₹54,600* on your taxes
Term life insurance provides financial protection for a specific period, typically 10 to 30 years or more. Upon the policyholder's death within the term, the insurance company pays the benefit (sum assured) to the beneficiary. The coverage automatically ends without a payout if the policyholder survives the term.
Here’s a list of high-risk hobbies in term insurance:
Jumping from an aeroplane involves risks and accidents during free fall and landing.
Climbing on either natural rocks or artificial walls, this sport requires strength and agility, teamwork, and more. Falls and gear failure can cause serious injuries.
Diving underwater poses risks, including the dangers of deep water and possible health complications. The risk of decompression sickness will rise with deeper dives.
Raced at high speed in competition, thus raising the chance of a crash and serious injury. In high risks, they can escalate within a split second to life-threatening moments.
Jumping from great heights attached to an elastic cord with great chances of failure in equipment.
Other high-risk hobbies include sky surfing, hang gliding, paragliding, whitewater rafting, and caving/spelunking.
If you don't disclose certain high-risk hobbies during the term life insurance application process, you could face severe consequences: Here's how things might go:
If you are involved in a high-risk hobby that was not disclosed to the insurance provider, resulting in an incident and claims, the insurer might deny the claim. This could leave your beneficiaries without the financial support you intended to provide.
Insurers inquire about claims regularly and may find high-risk hobbies you failed to disclose. If they find that it was misrepresented or omitted, they can cancel the policy, leaving you without coverage and losing all your premiums paid.
If you engage in risky hobbies like skydiving, motor racing, etc., you should not hide this from your insurer. They may initially give you a lower premium based on what they think your risk level is. But once they know of these hobbies, they will re-evaluate your new risk and increase the premium.
A denial or cancellation due to non-disclosure can hurt your ability to get insurance in the future. The insurers might consider your history unfavourable, charge you more, or make getting new insurance difficult.
Knowing what is included or excluded in your term life insurance policy becomes important for people with high-risk hobbies. Here's why:
You should know what is covered and what is not in the policy. Some insurers might deny paying out if your death was due to a high-risk activity. Knowing these will ensure you have the correct coverage for your lifestyle.
The last thing you would want your family to face under stressful circumstances is financial distress because your policy did not consider the circumstances you found yourself in. Knowing the exclusions prevents unwanted surprises when making a claim.
Knowing the exclusions regarding high-risk hobbies will make you think twice before engaging in some activities or taking more precautions. This can help you better manage your risks and protect your policy in the long run.
Being informed about your policy gives you peace of mind. You’ll feel more secure knowing you’ve chosen a plan that adequately covers your needs and family.
ACKO Life Flexi Term Plan is a modern, highly flexible, customer-centric solution for long-term financial protection. This unique plan allows seamless modifications to both the Coverage Amount (Sum Assured) and Policy Duration. This means you can easily increase or decrease your coverage based on your evolving life circumstances, such as marriage, buying a house, or having children.
Besides, ACKO offers a fully digital policy management system. Policyholders can easily make any policy adjustments (endorsements) such as:
Several factors indeed play a crucial role in estimating your term life insurance premiums. Among these factors, hobbies are one of the critical elements insurers consider. So, if you are planning to purchase a term plan, understanding how hobbies impact the calculation of term insurance premiums is crucial. Remember that engaging in riskier hobbies leads to higher term insurance premiums.