Here’s the thing about life insurance: it gets a bit of a bad rap. Dangerous professions and pre-existing conditions will not exclude anyone from obtaining a policy—it just might keep them from being able to get a policy that’s affordable.
Which, if you think about a life insurance company in terms of being a business, is pretty reasonable. Thinking about it in those terms is actually the only way to understand why insurance rates are what they are, why insurance fraud is prevented, and why someone like a police officer is going to pay more—fairly so— than a teacher would.
The Big Picture Business
That’s what a life insurance company is—it’s a big picture business. When they write out their policies, determine their rates, and pass those along to the consumer, they’re looking at the big picture for their business. It’s a picture that spans across whole lifetimes, because that’s the kind of service they provide—a service that spans the course of a whole lifetime or, at least, a huge chunk of one.
In order for a life insurance company to pay out millions and millions of dollars, every year, in claims made by their clients’ beneficiaries, they have to have a steady flow of funds coming in and they have to minimize their losses as much as humanly possible. Otherwise, the balance gets thrown off and somewhere down the domino effect, they’re in trouble.
In a lot of ways, it’s a gambling business, too. They have no idea when their clients are going to die and there’s no way to try to predict that, or predict how much they’re going to have to pay out at any given time. What they do know is that if they make too many poor investments in individuals who are going to end up costing them a lot of money, they’ll go out of business. So, instead of just refusing service to the ones that really need it, they extend service at a price that they can work into their bigger picture, so even if a loss does occur, it’s not as much of one. Visit the Suncorp life protect site today to learn more about what your options are for you & your family.
Who’s a Risk & Who Isn’t?
This is a question that’s typically answered by the United States Bureau of Labor Statistics—this bureau produces regular reports on what the most dangerous professions are, what the fatality rates are for those professions, and what the accident rates are that tend to result in fatalities.
A police officer tends to rank right at the tail end of the top 10 in the United States with a fatality rate of 21.8% per 100,000 workers, which might sound surprising. It did to me; I thought it would be one of the top ranking for dangerous professions, but the most dangerous job in the United States is actually being a fisherman, and it’s an occupation that has held that position for over a decade.
With these diligent statistics being reported by the bureau, all an insurance company has to do is look to their own experience and losses having insured any occupation and look to what the USBLS is reporting about that job’s fatality rates. From those two sources, they are provided with the risk and set up their quotes for coverage accordingly.
Why Professional Guidance is Important
Most dangerous jobs come along with employers that understand that the job is dangerous and benefits packages that reflect their understanding of that—or, they come along with unions, associations, or something similar that provides group life insurance at rates that are way more affordable than what any commercial policy would offer anyone.
However, not all the dangerous jobs come along with these things. Some come with group life insurance, but just not enough for what someone really needs to make certain their family and several children are covered.
These are the situations that most call for the guidance of a financial or insurance professional trained and knowledgeable about their industry. These professionals know this industry, they know all the major players in it, and they can make far more affordable things happen then just the average Joe can shopping around on the internet.
Always, always, obtain professional guidance. Those insurance waters are murky, chock full of sharks, and it can be substantially easier to catch that nice, affordable, fish alongside someone that knows where to look.