No two clients are the same for financial producers, and the same holds true for the risks associated with them. While insurance planning can provide individuals with a valuable financial tool, obtaining the right coverage can be harder for some clients, especially when high risk avocations are an issue.
Freedom through information
When an insurance application is submitted, underwriters pore over every detail. If a high risk avocation is found, it will represent a red flag. Some carriers may even go so far as to decline coverage to individuals with certain high risk avocations altogether.
However, risky avocations don’t have to mean exorbitant costs for your client or the specter of the carrier declining to issue coverage. By providing as much detailed information as possible surrounding an avocation and your client’s level of participation, you can make it easier for underwriters to gain a better understanding of the actual risks involved.
Many insurance carriers have specific guidelines in place as they relate to different avocations, so the more information you can provide, the better. Typically, carriers have specific questionnaires for certain avocations. Timely completion and submission of the appropriate questionnaire may avoid delay and present the underwriter with a more complete picture of your client.
Take aviation for example. While your client’s age, medical history and lifestyle are fundamental factors, you can paint a better picture for insurance carriers by providing additional information in conjunction with the questionnaire.
A complete and accurate questionnaire supplemented with any pertinent information will put underwriters in a better position to assess risk and hopefully get your client the coverage they need.
Helping your clients plan
It’s becoming less uncommon to see a client retire and take up an avocation that they wished all their life they’d tried. As a financial producer, there’s no doubt you’ll eventually have a client that takes part in one high risk avocation or another.
These can include everything from scuba diving, extreme sports and mountain climbing to skydiving and auto racing. These individuals require the same valuable service that proper insurance coverage can provide everyone, and it’s up to you to help them.
First and foremost, if a client is involved in a dangerous avocation that may make it more difficult to obtain insurance coverage, it’s your duty to inform them. Some activities may come with insurance surcharges, higher premiums or no access to coverage whatsoever.
It’s vital that clients are completely honest with you about their avocations, and that the information provided to insurance carriers reflects this. If individuals are caught lying about their avocations, they risk having their policies canceled and their claims denied.