CuzzA
Wetwork for Hire
Note to hijack the thread, but most life insurance policies will require that update them on and significant "life changes" (such as taking up cave diving) if you do so after a short period of time following the policy being issued.
I know this for a fact. A friend who died diving in the Florida caves (in a widely discussed accident) fell into this "loophole" and to the best of my knowledge, the insurance company has denied paying the vast majority of the face value. This individual was the proverbial "zero to hero" diver. He went from OW certification to full cave, trimix diver in three years and failed to notify his insurer.
When I learned of this, I spoke to my carrier, and he confirmed that this is almost always the case. The details may vary, but if you do take up something like this, be aware.
My agent used smoking as an example. You take out a policy as a non-smoker. Two weeks later, you suddenly decide to take it up. A week later, you get hit my a bus. The insurer could decline to pay even though the cause of death had nothing to do with smoking. On the other hand, if you took up smoking 10 years later, this wouldn't be the case. On my policy, 60 days is the magic time.
I am in Canada, and this might be different in the US and elsewhere, but I certainly wasn't aware of it.
The situation I mentioned above has resulted in lawsuits as I understand it, but there is every expectation that the company will win. Yes, bastards.
So in the U.S it is pretty simple. Don't lie on your application. Obviously we are all divers here, therefore we should answer yes when asked about our avocation. (Note: That does not necessarily mean we have to pay more just because we scuba dive). Most companies will have you fill out an avocation questionnaire which will seek further details about the activities you engage in or if you intend to engage in the activity in the near future. As long as you don't lie or intentionally try to defraud an insurance company there are generally no issues.
If you lied or knew at the time you applied that you were going to take up an activity they asked about, there is a two year incontestability clause from the date of issue and it restarts if the policy was re-issued because it lapsed for non payment of premium. In other words, the company has a right to look into your death to see if there were any material misrepresentations. If they find there were, it is up to the company as to what they will do. They could flat out deny the claim and refund the premium you paid. They could adjust the death benefit based on how the policy should have been issued in terms of the premium amount or they could pay the claim.
After the two year incontestability clause it does not matter. The death benefit will be paid. No ifs, ands, or buts.
I attached an example so everyone can see the types of questions and how they are worded.