From BASE jumping and big-wave surfing to wingsuit flying, extreme sports offer an unmatched adrenaline rush. If you are an enthusiast, you know how to manage risk in the field. But how do you manage your financial risk back home? Canadian life insurance companies understandably approach these hazardous pastimes with extreme caution, but that does not mean you are out of options.
For those who embrace a high-risk lifestyle, obtaining life insurance requires a strategic, honest, and persistent approach. This guide walks you through how extreme sports affect your insurability, what to expect during the application, and strategies for finding affordable coverage in Canada. By understanding the process and working with the right professionals, most enthusiasts can secure the life insurance they need to protect their families.
What Is Life Insurance for Extreme Sports?
Life insurance for extreme sports isn’t a unique product; it’s a standard life insurance policy adapted to account for high-risk activities. It provides a financial safety net for your loved ones if you pass away while participating in high-risk recreational activities like skydiving, mountaineering, or motocross. These activities might be excluded from a standard policy without proper disclosure and underwriting.
Which Activities Are Classified as High Risk in Canada?
While each insurer has its own list, the following activities are commonly flagged as “hazardous” and require mandatory disclosure:
Aerial Sport
- Skydiving – Jumping from extreme heights inherently carries risks from equipment failure, improper parachuting technique, collisions, and landing errors.
- Parachuting – Similar risks as skydiving from high altitudes.
- BASE jumping – A combination of incredible heights and limited safety gear compared to skydiving. Higher rate of deaths.
- Hang gliding/paragliding – Similar risks as skydiving from great heights with limited safety equipment.
- Wingsuit flying – Increased risks due to proximity flying at high speeds.
- Air sports – Piloting small planes, hang gliders, stunt planes, and other non-commercial aircraft carries substantial risks for amateur aviators.
Mountaineering & Climbing
- High-altitude Mountaineering – Numerous threats, including falls, avalanches, rock slides, hypothermia, and oxygen deprivation at high altitudes.
- Ice climbing – The possibility of lethal falls due to small mistakes or equipment issues. Being stranded on walls poses dangers, too.
Water Sports
- Scuba diving – Risk of decompression sickness, disorientation, and drowning. It is tough when diving in caves, at deep depths, or with sharks.
- Whitewater rafting – Fast-moving rapids can quickly eject or drown rafters who make slight errors navigating extreme conditions.
- Big wave surfing – Risk of extended underwater hold-downs and collisions with reefs.
- Cave diving – Underwater cave exploration compounds the usual risks of scuba diving.
Racing & Speed
- Auto/boat/motorcycle racing – High speeds increase risks from accidents, collisions, and mechanical failures.
- Skiing – Fast downhill speeds can lead to collisions with objects or other skiers.
- Downhill mountain biking – High speeds coupled with natural obstacles pose hazards of crashes or collisions.
Backcountry & Specialized Sports
- Parkour – Urban acrobatics involving jumps, rolls, and climbs between buildings and structures, risk falls and collisions.
- Heli-skiing – Backcountry skiing reached by helicopter carries high risks of avalanches or falls in remote areas.
- Canyoning – Navigating canyons and cliffs with ropes and rappelling gear carries the risk of falls or becoming stranded.
- Superfly Zipline – Cables strung across canyons to ‘fly’ by harness can break or detach, leading to lethal falls.
And the list goes on. Bungee jumping, storm chasing, paramotoring, free solo climbing, and other extreme sports instantly raise red flags with underwriters. As detailed next, disclosing any participation in dangerous hobbies is essential when applying for life insurance for extreme sports enthusiasts.
How Insurers Underwrite High-Risk Activities
Life insurance companies in Canada use a process called underwriting to assess the risk of insuring an applicant. Through detailed health questionnaires and medical examinations, underwriters determine the probability that an applicant will pass away while covered under a policy.
Due to the elevated mortality risks of extreme sports, insurers will ask very targeted questions when you apply for coverage. For example:
General questions
- Do you participate in sports involving heights, speeds or physical impacts?
- How often do you take part in these types of hazardous activities per year?
Activity-specific questions
- When did you first start participating in this sport, and how many years of experience do you have?
- Do you take any training courses or hold any certifications related to this activity?
- Are you an amateur or professional practitioner of this sport?
- In which types of locations or environments do you engage in this activity, and how frequently?
- Describe any significant related injuries you have sustained.
- What specific safety gear or risk mitigation precautions do you employ when taking part in this sport?
Sample Underwriting Questions from RBC Insurance Company
RBC Insurance has specific questionnaires for high-risk activities to assess the mortality risk. For mountaineering, RBC would inquire about:
- Mountaineering experience – years participating, training courses completed, membership in any climbing clubs or groups
- Types of terrain climbed – rock, snow, ice, mixed. Also, the grade/difficulty level.
- Locations and altitudes climbed
- Frequency of climbs per year and any climbing expeditions taken
- Any climbing accidents or injuries sustained
- Future mountaineering plans
For parachuting/skydiving, RBC would ask about:
- Skydiving license and certification details
- Total number of jumps in lifetime and past 1-2 years
- Frequency of jumping planned for the future
- Locations and terrain jumped over
- Any participation in competitions, stunts, delayed chute opening or high-risk activities
- Whether the individual acts as an instructor or is involved professionally
- Any previous skydiving accidents or injuries
In summary, insurers want full details on the experience level, frequency of participation, dangers involved and any plans to engage in more high-risk activities in the sport. This helps them accurately assess the mortality risks.
How Extreme Sports Impact The Underwriting Outcomes
Assuming you are completely honest about your activities, which is mandatory, an application to a traditional Canadian insurer will typically result in one of the following scenarios:
- Standard Approval: If your activity is considered low-risk (e.g., occasional, certified scuba diving in open water), you might be approved at standard rates.
- Rated Policy: This is the most common outcome. You are approved, but the insurer applies a “Table Rating”. This is a percentage surcharge (e.g., 25% to 250% or more) added to the standard premium for your age and health.
- Exclusion Rider: The policy is approved at standard rates, but an exclusion is added. This means the policy will not pay out if your death is a direct result of the specified activity (e.g., mountaineering).
- Outright decline: If the activity is deemed too risky (like free solo climbing or wingsuit proximity flying), the insurer may decline to offer coverage.
Strategies for Securing Your Coverage and Competitive Rates
The key to reducing your premium is moving your risk profile down the underwriter’s table rating. You must prove that your experience, training, and equipment mitigate the inherent risk.
The Importance of Transparency (And Its Risks)
You must disclose every hazardous activity you regularly participate in. Failing to disclose your activities is considered misrepresentation or omission and can void your policy. If you die from an undisclosed activity (e.g., a BASE jumping accident), the insurer can and will investigate and void the entire policy, denying the death benefit to your beneficiaries.
Therefore, it is critical to inform prospective life insurance providers about every extreme hobby you regularly take part in, no matter how dangerous it may seem. This transparency allows the underwriter to accurately gauge risks and decide if coverage can be extended. Omitting activities may seem harmless up front, but can cause issues later.
Prepare Your Risk Mitigation Portfolio
When applying for life insurance, do not just list the activity; provide evidence that you are an experienced and safe participant. Some examples include:
- Activity Log or Journal: Proves experience and frequency. Showing 100 successful jumps over 10 years looks much better than just saying you “sky dive.”
- Certifications/Licenses: Provide copies of your PADI Master Diver, ACMG (Association of Canadian Mountain Guides) training, or racing licenses. Certification proves you adhere to professional safety standards.
- Membership Details: Include membership in recognized clubs or associations (e.g., local climbing clubs or national parachuting associations). This implies a commitment to community-enforced safety.
Pro-tip: Applying when you have temporarily scaled back your high-risk sports participation may help reduce table rating multipliers or lead to approval where previously denied.
Compare Insurers’ Risk Assessments
Understanding how Canadian insurers treat risk allows you to strategically target applications. Note that underwriting guides change constantly; these examples are for illustration:
| Insurer | Assessment & Rating Guideline |
|---|---|
| Equitable Life of Canada (Source: Equitable Life of Canada, Field Underwriting Guide, Form #1024.) | – Indoor rock climbing is a standard risk – Outdoor rock climbing under 13,000 feet may incur an extra premium of approximately $2.50 to $3.50 per $1,000 of coverage. – Climbing over 23,000 feet is usually declined. |
| Empire Life | – For scuba diving, standard rates generally apply up to 100 feet depth. Depths below 125 feet typically result in a decline. – Cave/Ice diving is often declined or highly rated. |
| iA Financial | Hang gliding or aerobatics could see extra ratings ranging from standard to a flat extra of up to $7.50 per $1,000 annually, or an exclusion may be offered instead. |
Crucial Takeaway: A $2.50 per $1,000 rating on a $500,000 policy is an extra $1,250 annually. This is why comparison shopping among carriers is the single most valuable strategy.
When applying, use a specialized broker who understands the high-risk market. They can help frame your application to highlight mitigating factors.
Types of Life Insurance Policies Available to Extreme Sports Enthusiasts
If traditional, fully underwritten policies (Term or Permanent Life) are unattainable or too expensive, there are still crucial options to provide financial security:
Simplified Issue Life Insurance
With simplified issue life insurance, applicants only need to answer a handful of basic health questions and no medical exam is required. Approval is, therefore, much quicker. However, coverage amounts max out around $500,000.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance approves applicants with no health questionnaires or medical assessments. Although maximum coverage is only around $25,000, it provides a safety net for high-risk individuals who cannot obtain traditional policies.
Group Life Insurance
Some employers provide group life insurance plans that enroll all personnel without underwriting. However, benefit amounts are usually limited to 1-2 times annual salary.
Accidental Death Insurance
Accidental death insurance pays out only if the policyholder dies due to an accident. Extreme sports enthusiasts may secure higher payouts with accidental death plans versus standard life insurance.
Final Expense Insurance
Final expense insurance provides a small lump sum payout to cover funeral costs. Maximum benefits are only around $25,000, but approval is guaranteed.
Thrill seekers unable to get covered otherwise should seriously consider guaranteed issues, simplified issues or accidental death insurance. A basic plan provides peace of mind better than no coverage at all.
Traditional Life Insurance Coverage
Beyond specialty policies, extreme sports enthusiasts can also consider traditional types of life insurance policies to meet their needs.
Term life insurance
Term life insurance provides temporary coverage for a specified period, such as 10, 20 or 30 years. Premiums are lower than permanent insurance since a Term life policy does not have cash value. However, term policies may not be renewable after the initial term expires.
Premiums will likely be higher for those with hazardous hobbies, but a term policy may still be more economical than specialized insurance.
Permanent life insurance
Permanent life insurance provides lifelong coverage. The two main types are whole life insurance and universal life insurance. Premiums are typically higher than term but remain fixed. A portion goes toward a cash value that grows tax-deferred.
Permanent policies allow individuals to lock in insurability when young and healthy. Those with dangerous hobbies who think they may develop health issues later can secure coverage with permanent life insurance. However, the premiums will reflect extra mortality risk from the outset.
Conclusion: Protect Your Family, Pursue Your Passion
Obtaining reasonably-priced life insurance when you regularly engage in extreme sports is a challenge, but it is highly attainable. Your adventure doesn’t need to put your family’s financial future at risk. The keys are complete honesty, detailed preparation for your application, and a strategic approach to shopping the market.
By working with a knowledgeable advisor, you can get the peace of mind that comes from knowing your loved ones are protected, no matter where your adventures take you.
Frequently Asked Questions
Should I get life insurance if I engage in extreme sports?
If you regularly take part in hazardous extreme sports, life insurance is strongly recommended to protect your family from financial hardship if you suffer an accidental death. However, be prepared to undergo intensive risk assessment and pay elevated premiums compared to those with less dangerous hobbies.
What strategies can reduce my life insurance rates for extreme sports?
Emphasizing any training, certifications and safety gear used can help reduce premiums. Temporarily reducing activity frequency when applying may also lower your risk rating. Comparing multiple insurers is key, as each will assess your hobbies differently. Excluding only the very riskiest aspects may open up cheaper options.
What happens if I don't disclose my extreme activities when applying?
It may be tempting to omit extreme hobbies you think will cause coverage denial, but this can completely invalidate your policy later if you die due to a non-disclosed activity. Always fully disclose your sports to ensure your family actually receives the death benefit. Honesty locks in the coverage you need.
Why does life insurance cost more for extreme sports?
Activities like skydiving, cave diving, and BASE jumping have higher chances of fatalities, so insurance premiums are higher to cover the added risk.
Do all life insurers have the same underwriting practices for extreme sports?
No, some specialize in higher risk niche markets and may offer better rates in certain cases. Shop around.
Is life insurance more expensive for all extreme sports?
Not necessarily, lower risk activities like recreational scuba diving may still qualify for standard or lightly rated policies.
How often do I need to update my life insurer on my extreme activities?
Disclose any significant changes in participation, risks or new high-risk pursuits before renewal to avoid issues later on.
Can I reduce my life insurance rates if I stop doing extreme sports?
Yes, inform your insurer if you substantially reduce or cease hazardous activities and request to have ratings removed if warranted.
Do life insurers restrict coverage for certain extremely dangerous sports?
Yes, activities like free solo climbing or wingsuit flying may be uninsurable or have limited options due to the associated mortality rates.