People with certain jobs that insurance companies categorize as “hazardous” end up paying more for life insurance, or may have exclusions on their policy which don’t pay out if they die while working.
Learn more about how insurers use your job to calculate risk, and what you can do to reduce the cost of life insurance if you’re quoted for higher premiums because of your occupation.
Life insurance terms you should know
Beneficiaries: The people you name on your life insurance policy to receive the lump sum of money — also known as the death benefit — when you die.
Cash value: The portion of a permanent life insurance policy’s monetary value that grows tax-deferred over the life of the policy.
Death benefit: The amount of money the life insurance company will pay your beneficiaries when you die.
Face amount: The dollar amount, or death benefit, your beneficiaries receive if you die while your life insurance policy is active.
Insured: The person who is covered by the insurance policy.
Policy: The legal document that includes the terms and conditions of your life insurance contract.
Policyholder: The person who owns an insurance policy. Usually, this is the same person as the insured.
Permanent life insurance: A type of life insurance that lasts for the rest of your life and usually includes a cash value account.
Premium: The amount you pay your insurance company to keep your coverage active. Premiums are typically paid monthly or annually.
Riders: Add-ons to a life insurance policy that provide more robust coverage, sometimes for an extra cost.
Term life insurance: A life insurance policy that lasts for a set number of years before it expires. If you die before the term is up, your beneficiaries receive a death benefit.
Underwriting: The process where an insurance company evaluates the risk of insuring you and determines your final rate.
Why does your occupation affect your life insurance premiums?
Life insurance premiums are based on a number of factors, including your age, health, gender, and lifestyle. Companies evaluate the risk of insuring you through a process called underwriting.
Life insurance companies use an actuarial table to estimate the probability that an individual will die at each age and that’s factored into the cost of coverage.
If insurers find factors that might increase the likelihood of you dying at an earlier age, they’ll charge you more for coverage. So, if their actuarial tables show that your chances of dying at an earlier age are increased because of your job, you’ll pay more.
How does your occupation affect the cost of life insurance?
To get the best risk classification (often called Preferred Plus) or second-best classification (often called Preferred), your job likely cannot include any hazardous duties.
Each life insurance company has its own definition of “hazardous.” This category typically includes jobs with an increased risk of injury or death, such as diving, mining, firefighting, and high-rise construction.
If your job does include hazardous duties, you can be quoted Standard rates, or you could be charged a flat extra fee on top of your premiums.
Standard rates are typically reserved for people who have a moderate health condition, family history of a serious health condition, or another moderate risk factor.
If you’re purchasing a $500,000 policy, having a hazardous job with a $2.50 flat rate could mean paying an extra $1,250 per year for life insurance, or $104 per month.
Which occupations increase life insurance rates?
Some of the jobs that could impact your life insurance rate include:
Active military
Building and construction workers
Electric powerline construction and maintenance workers
Fishing industry workers
Law enforcement workers
Lumber industry workers
Marine industry such as deckhands or sailors
Municipal and volunteer firefighters
Mining and quarrying workers
Oil and natural gas industry workers
If you work in any of these industries or have another job that involves physical risk, your life insurance advisor may ask you to answer more questions about your work, including your activities, tasks, working environment, and more.
Remember that each life insurance company has its own underwriting guidelines and will vary in how they treat your application, which makes it important to shop around.
Marijuana industry jobs and life insurance
Currently in the U.S., people who work in the cannabis industry can’t purchase life insurance from many of the major life insurance companies — even if the business is legal in your state.
Because marijuana is still illegal at the federal level, processing payments from someone with income from the cannabis industry requires separate accounts and reporting that makes it fraught for many businesses, including life insurance companies.
It’s possible that as the marijuana industry grows and federal regulations change, more insurers will follow suit and offer policies to people in the industry.
In the meantime, you may be able to find a smaller company that can offer you a policy if you’re working in the marijuana industry.
Read about the the best life insurance companies for marijuana users
How does your occupation affect life insurance riders?
You can add supplemental coverage to your life insurance policy with a rider. Some riders are free add-ons to your policy, while others may cost an additional fee or require additional underwriting.
One type of rider — the disability income rider — is generally unavailable to people with high-risk jobs. A disability income rider added onto a life insurance policy pays a monthly benefit if you become disabled and cannot work.
Life insurance companies don’t typically offer this feature to people who have a high likelihood of disability due to their occupation.
If you’re concerned that a disability could affect your ability to earn money, you should consider purchasing a separate long-term disability insurance plan, which is typically available to a wider variety of occupations.
How to save on life insurance if you have a high-risk occupation
If you have a high-risk job, you’re not completely disqualified from competitive life insurance rates. There are a few steps you can take to get the best possible rates for your circumstances.
Work with an independent broker: If you have a high-risk job, an independent broker like Policygenius can help you shop around and find the right life insurance company for your specific background.
Ask for reconsideration: If your job duties change and you think you might be eligible for lower rates, you can apply for reconsideration, where you can potentially get lower rates for any improvements in your health.
Pay your premiums annually: Depending on your insurance company, by paying your premiums annually instead of monthly, you can save between 2% to 5% on your premiums.
How does an occupation change affect your life insurance?
An insurance company can’t change your rates if you start a risky job after your life insurance policy is already in force.
If you have a hazardous occupation and later get a less risky job, you can try applying for a new policy, but you shouldn’t cancel your current policy until you receive a policy offer. This way, you won’t have any gaps in coverage.
If you’re going through a career change and you think your new job may be high risk, our experts are licensed in 50 states and can help match you to the best life insurance for high risk occupations.
Frequently asked questions
What jobs are considered high-risk to insurance companies?
Any job that increases the risk of injury or death. Hazardous jobs include active military, electric power line construction and maintenance workers, fishing industry workers, law enforcement workers, lumber industry workers, marine industry workers, firefighters, miners, oil and natural gas industry workers, among others.
Does income affect your ability to get life insurance?
Your income determines the coverage amount you can qualify for, since life insurance is commonly used as income replacement. For example, if you make $50,000 a year, you won’t be eligible for a $2 million policy, but a $500,000 or $750,000 policy may be right for you.
Can I get life insurance if I work in the marijuana industry?
Most of the larger life insurance companies currently don’t insure anyone who works in the marijuana industry because it isn’t legal on a federal level. However, some smaller companies may provide insurance coverage if you work in the industry.
