Implications of racing and HSDE on life insurance
01-12-2009, 01:59 PM
#1
Addict
Rennlist Member
Rennlist Member
Thread Starter
Implications of racing and HSDE on life insurance
For the financial / insurance industry guys out there who club race...
I'm in the process of purchasing a whole life policy, and am looking at an "avocation disclosure" form. It distinguishes between vehicle-vs-vehicle and vehicle-vs-clock forms of "auto racing". It also has fields for avg speed, top speed, sponsoring organization, etc. So it would appear that the underwriting does at least take into consideration the differences between DE's, PCA club racing, and other forms of competitive racing. But I would still expect that anything submitted on this form will result in higher premiums. Does anyone have insight into how the underwriters use the information or how much higher the premiums can be when the insured is involved in PCA club racing?
Since the purpose of the policy is to fund a trust (not for death benefits) I would look at other means of funding if the incremental costs due to club racing reduce the overall return. Has anybody been down this path before with whole life policies? Not interested in stretching the truth to make this work, so nix that idea right off the bat. Thanks.
I'm in the process of purchasing a whole life policy, and am looking at an "avocation disclosure" form. It distinguishes between vehicle-vs-vehicle and vehicle-vs-clock forms of "auto racing". It also has fields for avg speed, top speed, sponsoring organization, etc. So it would appear that the underwriting does at least take into consideration the differences between DE's, PCA club racing, and other forms of competitive racing. But I would still expect that anything submitted on this form will result in higher premiums. Does anyone have insight into how the underwriters use the information or how much higher the premiums can be when the insured is involved in PCA club racing?
Since the purpose of the policy is to fund a trust (not for death benefits) I would look at other means of funding if the incremental costs due to club racing reduce the overall return. Has anybody been down this path before with whole life policies? Not interested in stretching the truth to make this work, so nix that idea right off the bat. Thanks.
01-12-2009, 06:18 PM
#2
Three Wheelin'
Join Date: Nov 2002
Location: Orlando, FL USA
Posts: 1,262
Likes: 0
Received 0 Likes
on
0 Posts
01-12-2009, 06:33 PM
#3
Rennlist Member
IMO it pays to get a policy BEFORE applying for a license. Most term-type policies cannot penalize you if your lifestyle/hobbies change after you are underwritten, IIRC.
01-12-2009, 07:59 PM
#4
Addict
Rennlist Member
Rennlist Member
Thread Starter
Well they must be getting smarter. This avocation disclosure has language that solicits responses across the continuum of "currently", "planning", and "anticipating". In addition, the fields I mentioned above are provided for both "last 12 months" and "next 12 months". Small consolation is that it appears to be much more inquisitive re: scuba, private pilots, and mountain climbing on ice!
01-12-2009, 11:43 PM
#5
Rennlist Member
I think I'm the resident rlist expert on getting life insurance for club racers. PM me if you'd like some advice.
The key to a successful life insurance purchase without any additional cost or exclusion due to racing is to have your agent discuss your racing schedule, car, and experience with the underwriter prior to your application, being truthful but also discussing the facts in a sympathetic manner. Not every company wants a racer's application, so your agent needs to know which carrier might accept you, and get your hobby informally approved before submitting the application. I would not submit an application to a company without prior discussion with their life selection decision maker if you want a positive outcome.
I have the luxury that my specialty underwriter raced mini's and 356's in scca back in the day. He's very good at explaining the hobby to home office underwriters and takes great pride that we have "taught" several life insurers to accept club racers without additional premium for avocation, and have placed a number of large policies for customers.
You are correct that you must be truthful answering those questions, or the policy could be void even for a non-racing related claim.
There are a few threads in the last couple years on point, if you "search".
The key to a successful life insurance purchase without any additional cost or exclusion due to racing is to have your agent discuss your racing schedule, car, and experience with the underwriter prior to your application, being truthful but also discussing the facts in a sympathetic manner. Not every company wants a racer's application, so your agent needs to know which carrier might accept you, and get your hobby informally approved before submitting the application. I would not submit an application to a company without prior discussion with their life selection decision maker if you want a positive outcome.
I have the luxury that my specialty underwriter raced mini's and 356's in scca back in the day. He's very good at explaining the hobby to home office underwriters and takes great pride that we have "taught" several life insurers to accept club racers without additional premium for avocation, and have placed a number of large policies for customers.
You are correct that you must be truthful answering those questions, or the policy could be void even for a non-racing related claim.
There are a few threads in the last couple years on point, if you "search".
01-13-2009, 09:28 AM
#7
The key to a successful life insurance purchase without any additional cost or exclusion due to racing is to have your agent discuss your racing schedule, car, and experience with the underwriter prior to your application, being truthful but also discussing the facts in a sympathetic manner. Not every company wants a racer's application, so your agent needs to know which carrier might accept you, and get your hobby informally approved before submitting the application. I would not submit an application to a company without prior discussion with their life selection decision maker if you want a positive outcome.
Trending Topics
01-13-2009, 10:33 AM
#8
Rennlist Member
My agent's dad was a long-time SCCA racer and DE participant, so he certainly understood what I was talking about. My understanding was that DE participation did not affect my rates, but club racing would.
01-13-2009, 10:36 AM
#9
Rennlist Member
I got my policy well after I stopped being an armed federal agent and well before I did my first DE, so they saw me as a low risk (I am not fool enough to willingly jump out of a perfectly good airplane, and I don't SCUBA more than 2-3 times a year).
01-13-2009, 06:36 PM
#10
Rennlist Member
Glad that Chris had a good outcome.
Patrick, club racing has to be disclosed, but once the underwriter understands that we're not NASCAR and don't hit walls at 200mph, we've had great success in insuring racers without a rating for hazardous activities.
My experience is that DE is even less of an underwriting issue.
Interestingly, Autocross has to be disclosed because it's a timed event. Of course, it's hard to see the hazard in driving 30mph in a parking lot. More likely get sunburn or sprained ankle running after a cone.
Patrick, club racing has to be disclosed, but once the underwriter understands that we're not NASCAR and don't hit walls at 200mph, we've had great success in insuring racers without a rating for hazardous activities.
My experience is that DE is even less of an underwriting issue.
Interestingly, Autocross has to be disclosed because it's a timed event. Of course, it's hard to see the hazard in driving 30mph in a parking lot. More likely get sunburn or sprained ankle running after a cone.
01-13-2009, 10:34 PM
#11
Advanced
Join Date: Dec 2003
Location: US
Posts: 57
Likes: 0
Received 0 Likes
on
0 Posts
Marc (mhm993) knows his business, anyone having difficulty finding life insurance coverage without being rated for club racing should contact him.
MARC: hope all is well, thanks again for all your help and professionalism.
MARC: hope all is well, thanks again for all your help and professionalism.
01-14-2009, 09:15 AM
#13
Addict
Rennlist Member
Rennlist Member
Thread Starter
Marc, thanks for your assessment and guidance. Enjoyed the general conversation also... hope to meet at Watkins Glen some day!
