Clients must not forget to mention any hazardous pastimes when applying for life and critical illness cover, writes Nicola Wharrier
While much emphasis is placed upon the applicant's medical history, the underwriter must also consider closely the risks presented by hazardous pastimes and hobbies.
The various risks associated with pastimes will influence the mortality and morbidity figures. These risks may arise from accidents, health problems and lifestyles connected to these activities. Therefore, it is imperative the underwriter clarifies at outset, the risk factors relating to pastimes and hobbies before offering acceptance terms.
The following pastimes are frequently encountered by the underwriter and often require special attention and so an indication of where increased risks arise, the appropriate information that would need to be obtained and the likely terms offered for life and disability benefits, can all be helpful in managing client's expectations.
Recreational diving
In practice, the vast majority of divers do not dive to great depths (with dives of up to six metres being the average) and will participate in the sport without unnecessary risk. However, there are divers who become more involved in the sport and it is for this reason life offices issue a diving questionnaire to establish the full nature of the diving and the extent of risk.
The main risks are:
lThe bends (decompression sickness). This is a build up of nitrogen bubbles in the blood stream due to surfacing from depth too quickly. It can cause a blockage in circulation of the small blood vessels.
Being unprepared, for example, running out of air.
Applicants with existing health problems that may add to the risk.
The remoteness of the area, as access to healthcare facilities maybe limited.
Exposure to weather extremes.
Accidental risks are more of a concern to the underwriter. The majority of incidents are related to human error and sub-standard diving equipment. Only a small proportion can be linked with injuries or attacks from marine animals.
Data provided by the BSAC (British Sub Aqua Club) indicate that over the years 1965-1997, there were 393 diving-related fatalities. Since the mid-1970s, this has remained relatively stable, with the majority of incidents occurring at depths greater than 30 metres.
The underwriter needs to identify all risks concerned with diving and a questionnaire will need to be completed by the client. This details experience/qualifications, depth of dives, number of dives a year, any wreck or salvage diving, solitary diving, where the dives take place, doctor's advice to limit the dives and accident details. It will also confirm the medical fitness of the individual to take part in the pursuit.
When assessing life assurance the extra risk is usually expressed as a monetary extra premium based on the sum assured, rather than increasing the basic (age-based) premium rate. Infrequent diving up to 40 metres in coastal waters and lakes could be considered a standard risk. More frequent and deeper dives, cave diving or wreck diving will attract a loading.
For example, a diver who holds a typical BSAC qualification and normally dives up to 50 metres and also regularly enjoys wreck diving, would attract a rating of around £2 per thousand sum assured.
Where an applicant seeks critical illness or permanent total disability cover, the diving risk will be accepted at standard rates, in most cases. This is the case for individuals that dive up to 40 metres. However, individuals that partake in deeper dives would be excluded from illness arising from sub-aqua diving. The only illnesses affected by this will be the accident-related illnesses and total and permanent disability benefit. Holiday diving will not affect any of the benefits.
Mountaineering
Mountaineering and rock climbing have increased in popularity in recent years. While there are statistics available regarding the number of accidents and fatalities, statistics relating to exact numbers of participants can only be speculated.
In mountaineering, fatalities and injuries arise primarily from errors of technique and judgement by the individual, rapid weather fluctuations and other local risks such as rock falls or avalanches. The climber's experience and fitness are also important considerations.
It is important to distinguish between trekking, indoor climbing and mountaineering or rock climbing. Trekking or hill walking does not involve the use of any special climbing equipment such as ropes or crampons (spiked apparatus fitted to boots), while indoor climbing is performed on artificial climbing walls with full safety harnesses.
The main health risks associated with climbing are:
Ascents to high altitudes especially above 5000m/16,400ft. These may lead to altitude disorders such as anoxia and acute mountain sickness, which may be complicated by cerebral/ pulmonary oedema. The latter are major emergencies with high mortality unless rapidly treated.
Climbing and mountaineering presents a higher risk in winter when the weather can be extreme and unpredictable and cause climbers to become trapped and suffer from exposure causing hypothermia and frostbite.
Some typical accident risks are:
Falling from heights,
Crushing injuries from rock falls and avalanches,
Faulty or lack of climbing safety equipment.
For life cover the increased risk is assessed as a monetary extra according to the sum assured, as with diving and other pursuits. Most offices issue a mountaineering questionnaire, which is sent to the client for their completion and contains information crucial to the underwriting process.
Ratings are based on experience, whether the individual is a member of a recognised club such as the British Mountaineering Club (BMC), heights climbed, severity of the climb, where the individual climbs and details of any accidents. Individuals that partake in hillwalking, for example, in the Lake District and mountaineering up to severe level (4b) can be considered a standard risk. More extensive climbing is outlined below. These loadings vary and are an indication only:
Below 4000m in the UK, only £1 per sum assured.
4000m elsewhere in the world, £2 per sum assured.
4000m-7000m in Africa, £3 per sum assured.
4000m-7000m in the Alps, £4 per sum assured.
Alaska and the Andes, £7 per sum assured.
Above 7000m (Everest), and the case would be declined.
For critical illness and total and permanent disability cover, hill walking and mountaineering up to severe level (4b) is generally accepted as standard. All climbing beyond this has mountaineering excluded from the cover. This would only affect the accident-related illnesses and total and permanent disablement benefits.
Motorsports
The last topic to be covered is risks associated with motorsports. Although considered to be a high-risk activity, safety standards in motorsports continue to improve. While it will never be a risk-free sport, the continued efforts of the worldwide governing body, the Federation Internationale De L'Automobile (FIA) and the national governing authorities such as the Motorsports Association (MSA), has meant that death rates have been reduced.
There are generally three factors that underwriters consider and these are:
Speed and type of the vehicle. This depends mainly on engine power and weight.
Design and construction of the vehicle.
Degree of exposure. Professional drivers will drive to the limits and test drive notably more than amateurs and therefore have significantly more exposure to potential risks.
Another area that must be considered is the category of the licence held by the individual. These are issued according to experience and performance of the competitor and provide a safeguard against inexperienced drivers competing in higher risk formulas beyond their skills.
Risk factors involved with underwriting motorsports are limited to the more obviously accident-related crashes, collisions causing death or permanent disabilities.
Life cover ratings are applied on a monetary basis and are governed by the above factors. For example, a professional racing driver at Formula one standard could be rated up to £30 per thousand sum assured a year. Alternatively, an individual who enjoys amateur go-karting, but does not compete will be a standard risk.
For critical illness and total and permanent disability a motorsport exclusion will be imposed on the benefit. Occasionally, applicants involved in non-competitive motorsports will be offered standard rates.
When an IFA is dealing with a case where a hazardous pursuit may carry an extra risk, it is recommended to the client to take advantage of the underwriting helpline made available by their life office.
These lines are normally manned by experienced underwriters who will be able to give an indication of the likely terms based on the information provided. Terms will be confirmed once the application and any relevant questionnaires have been received.
