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Last Updated on 26 January 2020

How does your job impact life insurance premiums and eligibility?



Risk is a key factor for insurers when determining both the cost of premiums and eligibility. An office worker is likely to pay less for their life insurance premiums than a soldier working in a war zone. There’s no surprise there.

It’s also logical that someone in a high-risk job might be more interested in life cover. They’ll want to be sure their families and assets have protection should anything unexpected happen.

This guide outlines everything you need to know about life insurance for high-risk jobs. Find out about the relationship between risk and life insurance premiums.

Key Points
  • High-risk occupations include those that involve working at heights or underground. Working with firearms, heavy machinery or hazardous chemicals are also on the list.
  • Those in risky occupations may find it more challenging to secure adequate cover and may pay more for it.
  • Insurers may require a detailed analysis of a specific job if it they consider it high-risk.

 

Industries with the highest numbers of fatalities

If you work in certain industries, you may be more at risk. Latest figures from 2016 put the number of work-related deaths in Australia at a hundred and eighty-two.

The bottom line is that the more likely an insurer thinks you are to die at work the higher your life insurance premium will be.

Defining high-risk occupations

Insurers don’t have a ‘one size fits all’ definition when it comes to risk assessing a job. As a rule of thumb, key considerations will be a person’s job title, their duties and exposure to danger. Insurers will want to know about the work environment too.
Australians in the following occupations are normally considered higher-risk:

  • Police officers
  • Loggers
  • Fishermen
  • Firefighters
  • Miners
  • Oil rig workers
  • Airline pilots
  • Construction workers

There’s more to risk than a job title. A commercial pilot who works for a big airline may find the cost of their premiums doesn’t go up because of their job.

On the other hand, pilots who fly planes or helicopters to tackle bushfires are likely to be in a higher-risk category. They may find it difficult but not impossible to find cover.

Understanding the level of risk

Details matter. You may appear to have a high-risk job on the face of it, but upon closer examination, the risk could be much lower than first thought.

For example, a person may work on a construction site but never come into contact with heavy machinery. Another person may clean windows but never on high-rise buildings.

Some police officers have clerical roles whilst others might work for a bomb squad. A person who works on a fish farm may not face exposure to the same risks as an offshore commercial fisherman.

It’s important to ensure that potential insurers are aware of all aspects of the job in question.

Other factors used to determine risk and eligibility

How much you pay for a policy depends on other things too. These include the following:

  • Where you work geographically
  • How much you get paid
  • How long you’ve worked in a particular role
  • Your medical history and lifestyle
  • Your age

Most work-related fatalities have occurred in the eastern states of Australia in the past few years.* Some workers such as loggers, ranchers or farmers may also work long distances from a hospital. That adds to the general overall risk of the job.

The same might apply to extraction workers who spend their lives on oil rigs or those on remote construction projects.

If you have a high income and need it covered, the cost to protect it will increase. Miners are likely to fall into this category.
A person with many years of experience may pay lower life insurance premiums than someone who is just setting out on their career.
Insurers will also need to find out about any pre-existing health issues. They may require you to take a medical examination.
They’ll also factor in lifestyle choices such as how much alcohol you drink and how often. They’ll want to know whether or not you smoke or have smoked in the past.
The older a person is, the higher their life insurance premiums are likely to be. That’s because our health tends to decline as we age, making us a higher-risk to insurers over time.

What are the most common types of life insurance?

There are four main types of life insurance in Australia:

  • Term life cover. This will pay out a lump sum in the event of your death.
  • Total and Permanent Disability Insurance (TPD). This pays a lump sum if you find you can’t work again due to a lasting disability.
  • Trauma insurance. This pays out a lump sum if you can’t work because of a serious injury or illness.
  • Income protection insurance. This is an ongoing payment that replaces up to 75% of lost income should you be temporarily unable to work because of an injury or illness.

Top tips for finding the best life cover

Make sure you always check the exclusions and restrictions that may apply to your life insurance policy. Read your policy disclosure statement carefully.

You might be able to reduce the risk insurers think you may pose—if you work in a high-risk industry, could you work in a lower risk job with the same employer?

You might also be able to cut out high-risk hobbies that could contribute to higher premiums.

It may be possible to couple a standard policy with extra coverage for the high-risk area of an occupation. Splitting the cover might be more cost effective than putting everything into one single policy.**

The key is to be honest. Life insurance is important—it’s the security your family may need. The last thing you want to do is invalidate a policy because of a few half-truths told to save a few dollars.

Look to the future and find life insurance for high-risk jobs

The good news is that work-related fatalities in Australia have been declining. In 2018, there were forty-five fewer deaths compared to the year before.

Some providers even specialise in life insurance for high-risk jobs. There’s almost always an affordable policy out there for everyone. Talk to us now so that we can help you find the perfect match.

Still have questions? Let's talk!

Confused? Not sure if this applies to your situation? Phone us on 1300 904 624 for some free, no obligation advice.

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