Ch. 12 - Avocations, Professional Sports, and Occupations Flashcards
What is an avocation in the context of life underwriting?
A non-occupational activity or hobby that may present an increased risk of injury or death.
Why are avocations underwritten?
Certain hobbies (e.g., skydiving, scuba diving, motor racing) present higher-than-average mortality risk.
How do underwriters evaluate avocations?
By reviewing frequency, experience level, type of activity, and safety measures used.
What is a common underwriting action for risky avocations?
Apply a flat extra premium, exclusion rider, or postpone if risk is extreme.
What is a flat extra premium?
A fixed dollar charge per $1,000 of insurance added to the premium to cover extra risk.
What avocations are commonly considered higher risk?
Skydiving, scuba diving, rock climbing, motor racing, aviation, and mountaineering.
What does an avocation questionnaire help determine?
The extent and nature of the applicant’s participation in the activity.
What factors increase risk in scuba diving?
Depth, frequency, dive type (recreational vs. cave), and certification level.
How does competitive motor racing impact underwriting?
Involves high speeds and increased risk of fatal accidents—often results in ratings or exclusions.
What is the underwriting concern with mountaineering?
Altitude, location, and difficulty level—higher altitude climbs carry greater risk.
How are professional athletes underwritten?
Based on sport type, level of competition, injury history, and contract terms.
Why are professional athletes considered higher risk?
Physical risk of injury or death and potential career volatility.
What type of insurance product is often limited for professional athletes?
Disability and life coverage may have exclusions, flat extras, or coverage limits.
What is an underwriter’s primary concern with high-risk occupations?
Increased mortality risk due to hazardous work conditions or environments.
What occupations typically involve higher underwriting risk?
Firefighters, police officers, miners, loggers, offshore oil workers, and commercial fishermen.
How are occupations classified in underwriting?
Based on risk exposure, environment, equipment used, and safety standards.
What documentation is often used in underwriting hazardous occupations?
An occupational questionnaire detailing duties, location, training, and protective equipment.
What underwriting actions may apply to high-risk occupations?
Flat extras, exclusions, or policy modifications (e.g., accidental death exclusions).
What is an exclusion rider?
A provision in the policy that eliminates coverage for specific activities or causes of death.
What’s the difference between an avocation and an occupation in underwriting?
An avocation is a hobby or leisure activity; an occupation is a job or profession—both can influence risk.
Mortality rates in auto racing are most influenced by:
1. type of fuel
2. driver’s experience
3. rate of speed
4. track conditions
- rate of speed
In the U.S., the three most common occupational accidents leading to death include all of the following EXCEPT:
1. assaults and violence
2. electrocution
3. vehicular accidents
4. struck by falling object
- electrocution
Insurers manage the mortality risk of professional athletes by doing which of the following?
A. limiting the issue age
B. seeking reinsurance support
C. limiting the amount of coverage
B & C only are correct
Flat extra ratings are typically used when assessing which of the following risks?
A. morbid obesity
B. scuba diving
C. underground mining
B & C only are correct
