Hazardous activity refers to a recreational pursuit or occupation that a life or disability insurance policy considers high-risk. These activities are generally excluded from insurance coverage due to their increased potential for injury or loss. Hazardous activities include, but are not limited to, scuba diving, BASE jumping, hang gliding, race car driving, flying a plane, horseback riding, bungee jumping, parasailing, off-roading, some construction work, logging, piloting aircraft, offshore oil rig operations, and underground mining.
If an individual’s pastime or job falls under an insurance company’s definition of hazardous activity, they might face higher premiums or complete denial of life or disability insurance coverage. In some cases, insurers might grant policies with explicit exclusions for these risky pursuits.
Key Aspects to Consider
- Defining Hazardous Activities: These activities are often categorized as high-risk due to their potential for significant injury or loss, thus typically not covered by standard life or disability insurance policies.
- Range of Activities: High-risk hobbies and jobs can range from extreme sports like hang-gliding and race car driving to dangerous occupations like logging and pilotage of small aircraft.
- Policy Exclusions: Insurance policies often exclude coverage for hazardous activities, meaning any injury or loss resulting from these pursuits will not be compensated.
- Implications for Insurance Applications: Failing to disclose involvement in high-risk activities can lead to insurance fraud allegations, policy denial, or retroactive adjustments.
- Adventure Activities Coverage: Some insurers offer special riders, requiring additional premiums, to extend coverage for high-risk hobbies or jobs.
Deeper Dive into Hazardous Activities
During the underwriting process, insurers meticulously review medical records and past insurance coverage to check for instances of hazardous activities. Omission of such pursuits can be considered fraudulent ( on-disclosure), and may result in policy denial, premium adjustment, or complete policy cancellation if discovered post-issuance.
It is critical to note that not every insurer classifies activities the same way—one insurance provider might consider scuba diving risky, while another might only view it dangerous without certified training or experience.
Important Considerations for Specific Exclusions
Here are some other notable exclusions you may find in disability policies:
- Substance Abuse or Alcohol Limitations: Coverage arising from substance abuse or alcoholism is often capped and may not be covered beyond this set period.
- Prescription Medications: Certain medications classified as easily abused may trigger exclusions, resulting in denied claims even for legitimate conditions.
- Other Common Exclusions: Include injuries from non-commercial flights, acts of war, suicide attempts, normal pregnancies, workplace injuries, and intentional acts causing disability.
Smoking also maintains a separate rate schedule, usually at a higher premium, reflecting its increased risk factor.
Alternative Coverage for High-Risk Pursuits
For those passionate about extreme sports and adventurous travels, specially designed insurance policies are available. These Adventure Activities Coverage plans cater specifically to hazards typically excluded from standard travel insurance. Some activities, like scuba diving when performed by certified professionals, might be included without extra riders, lower additional costs.
Real-World Example: Ballooning Accident Coverage Denial
In India, the South Mumbai District Consumer Disputes court upheld a ruling during an appeal from Nagin Parekh, who faced insurance claim denial following a hot air balloon incident in 2012. The balloon crashed twice, severely injuring Parekh. The court sided with the insurer, emphasizing the inherent risks in hot air ballooning and affirming the exclusion of such hazardous activities from policy coverage.
FAQs
What is considered high-risk for life insurance?
High-risk activities, as determined by various insurers, can lead to untimely deaths earlier than actuarial models predict. They include but aren’t limited to flying aircraft, paragliding, bungee jumping, scuba diving, and racing cars.
What is a high-risk policy?
High-risk policies are designed to insure individuals more likely to file claims, resulting in higher premiums and additional policy limitations.
What can disqualify you from life insurance?
Disqualifications may arise from lifestyle, health issues, family history, financial situation, or fraudulent information on an application. Being deemed excessively high-risk during the underwriting process can also lead to disapproval.
Related Terms: insurance policy, premium, rider, underwriting, disclosure.
References
- The Indian Express. “South Mumbai Consumer forum says no to mediclaim, calls ‘hot air balloon hazardous activity”’.
