Term Life Insurance

[BrianinCT]

Thinking about increasing my term life insurance. Do you guys pay an extra"motorcar racing" premium in your policies? The Hartford are telling me they may charge an extra $2k for term life to cover a couple of Race Series weekends per year. Is this the norm? Thanks

P.S Looking forward to my first Race Weekend at Lime Rock in July !

[MJAmok]

Don't tell them. As long as you don't die in the first two years, they are prohibited from witholding payment, even if you omitted the info on your application.

If you are worried about dying in the next two years, take out a 2 year policy with the racing admission and higher premium. At the same time, take out a policy with a different provider without the disclosure.

While you are at it... look into Whole or Universal Life, rather than term. More expensive, but it builds equity. Term, by definition, goes away.

And, no... I'm not an insurance salesman!

[BrianinCT]

Originally Posted by MJAmok

If you are worried about dying in the next two years, take out a 2 year policy with the racing admission and higher premium. At the same time, take out a policy with a different provider without the disclosure.

Good idea. Thanks.

[AlDelattre]

I think Mike has recommended the right approach....

When I got married, had kids, etc, I ended up doing the whole estate-planning thing - trusts, insurance, insurance on insurance, etc. The BEST thing I ever did was get a good estate planning guy.

He knows what I do - racing, scuba diving, the occasional skydiving...all RED FLAGS for any life insurance company. The good news is that he recommended that I "temporarily retire, or deny" those things for 2 years - now that the policies are "seasoned", I could enter the Professional Russian Roullette League and still be covered.

One thing to push back on with insurance is the actuarial risk profile - I did, and it worked. Eg did you know that competitive motor racing has a lower incidence of injury and death (per capita, per use hour) than GOLF? More people get killed by lightning on the golf course than get killed in "organized" racing every year (or so I'm told). It takes a good estate/insurance guy to pull that off, but my guy did.

If you want a reference, glad to send you his way.

BTW I tried to convince them that using a HANS made me eligible for a discount - didn't work. The fact that they knew my neck size was bigger than my head may have held that up...

[BrianinCT]

Al

We have gone through the estate planning process too. All squared away on that front. Retire for 2 years is kind of a downer but not a bad idea in the grand scheme of things. I have one policy thats older than 2 years so its not like my family is totally unprotected in the event of my untimely demise on the track. Just looking to increase coverage now which happens to coincide with my first race in July which is causing the insurance company some concern of course.

Well see what they come back to me with.

[AlDelattre]

yup - remember, I said "retire or deny".....

Eg with scuba diving - I do some advanced, deep, tech diving - I had to assert that most of my dives were to 40 feet or less, for some time period, etc.

challenge is to find a good (workable) insurer - that's where my estate guy really earned his $$.

BTW - I had this set up in California, I know you live in CT - not sure if there are any rules about this from state-to-state....

[Carl Lopez]

HI Al and all. When I was writing the book I did some research and found that the most dangerous, ( highest rate of fatalities per participant), recreational sport in the U.S. is Swimming.

Thanks for sharing the other info.

[dlippert]

There are insurance companies who will write without a extra premium for racing, you just need your agent to dig, mine did and I got it at standard rates from North American, so you miight check there. Also, look in RACER, there are sometimes advertisments frrom insurance agents/brokers touting no extra premium. Finally, I have heard that Skippy has been able to work with people by providing certification that this is all in a "school" environment and thus avoid the penalties as well. Doing it all again, I go down that path first.

[jlowe]

I second what Dick mentioned - as a horribly overinsured racer (my wife has uttered the pithy quote "Don't come back half hurt") I couldn't stand the chance of an overpriced premium, or the "hope they don't find out" approach. Instead I had SBRS attest to the fact that this is a race SCHOOL, and that the races are really supervised shool sessions, attended by instructors, and not meant to be uncontrolled races. That was sufficient to eliminate any surcharges on all of my life policies. I should note that all were in place before I ventured into the Grand Am series, which would most likely have triggered big penalties. Also, my disability policies were all written before I started racing, fortunately, or I'm sure they would have met with the same fate.

[dalyduo]

You might want to talk to Paul Newman who was recently asked by Jay Leno how his wife Joanne Woodward felt about his racing.

"She's been pretty good about it... She used to come to races in the early days but she stopped quite a while ago... My wife doesn't buy fancy clothes, shoes or jewelry... She buys life insurance!" (Come to think of it that conversation should probably be with Joanne. )

[MJAmok]

Originally Posted by jlowe

I couldn't stand the chance of an overpriced premium, or the "hope they don't find out" approach.

To be clear, Al and I are not advocating 'hoping they don't find out'.

The law requires the ins co.s to pay, even if you failed to tell them about a 'dangerous activity', as long as you live for two years after the start of the policy. The theory is 'if it didn't kill you in two years, how dangerous can it be'.

[Kasey]

To Jim's comment, coming home "half hurt" is far more likely than an untimely death. Not enough people make the proper investment in disability insurance. Make sure you are protected should an unfortunate incident (on track or off) affect your ability to sustain your current life style.

[LimeRockRacer]

As a person who has been in the business for almost 25 years I have to say I would never advocate filling a need for life insurance with a false application hoping you dont need it for two years.

There are plenty of ways to keep the cost of the insurance reasonable without gambling on the timliness of your application. Jlowe and Dick mention two simple solutions as examples.

Remember it is your beneficiaries that get stuck with whatever gamble or deal you put together. If they need the protection, do it on the up and up. If you want to gamble then go to Mohegan or Vegas with me and we can have a blast after racing!

It's not that Michael's strategy couldn't work but it may not and is the type of strategy better suited for investment and financial decisions higher up the risk pyramid.

That's my two cents...now back to racing..its much more fun.

[MJAmok]

Originally Posted by MJAmok

Don't tell them. As long as you don't die in the first two years, they are prohibited from witholding payment, even if you omitted the info on your application.

If you are worried about dying in the next two years, take out a 2 year policy with the racing admission and higher premium. At the same time, take out a policy with a different provider without the disclosure.

While you are at it... look into Whole or Universal Life, rather than term. More expensive, but it builds equity. Term, by definition, goes away.

And, no... I'm not an insurance salesman!

Jimminy Crickets....

It isn't a 'false application'; I don't suggest gambling for the first two years; and it isn't a good 'investment'.

[AlDelattre]

Just for the record, I put my personal integrity as "non-negotiable" - I did not want to give the impression that I advocate, or was suggesting, anyone commit insurance fraud or mis-represent anything.

What I WAS trying to suggest was 1) when you get insurance, you either follow the rules, or risk not being covered. (my "retire or deny" comment) 2) get someone GOOD who knows what you want to do, and what you're willing to do (there is a difference) and 3) generally speaking, insurance coverage is and can be a "negotiation", especially with the variety of specialty firms that exist today - I'd have to say that almost all of my various policies are customized to some degree, except for my car insurance.

One thing that I did overlook (and have since addressed) was my healthcare coverage - as my firm's coverage changed, little clauses and exclusions get added every year. Everyone should check that out - getting a supplemental is cheap insurance - literally.

[LimeRockRacer]

Who would have thought that insurance was something of interest to a bunch of gearheads like us on this site!

To further the warm and fuzzies on this issue let me offer the following:

I for one have never questioned nor did I intend to question anyone's integrity on this subject nor on any other subject for that matter that we have discussed either in person or on this site.

In fact I have found the opposite in my expereince with SBRS and Team Juicy members...that is, great people with high standards and integrity, just trying to help each other out for the common interest and good.

When I wrote on this subject I was trying to drive home that the issue of us racing and needing life insurance has some obvious challenges as mentioned in the original post. The subsequent posts offered some good and some other advice that may or may not work.

Since the posts hit in an area that I have more experience in than most, (unlike my limited amount of racing knowledge! ) I offered my two cents. I concur with Al that advice is best sought out with an experienced professional for strategies that work without risk to your beneficiaries. I find that many times our clients, whether a large multinational firm, or a local individual like us, make decisions on risk and insurance, although well intentioned, without proper advice. Many times this creates other problems that could have been avoided with proper professional risk management advice.

God willing, none of us will ever need to have our spouse or dependents take the piece of paper out of the file drawer to excercise the death benefit we purchased due to an untimely death from racing or any other cause.

Please accept my aploogies if you felt singled out by my post response of the other day. No harm was intended nor implied. Just trying to offer my experience.

Has anyone noticed that e-mail and web posting can be open for mis-interpretation on a greater scale than having a conversation with someone where you can clarify and emote in person?

I like Michaels' response: "Jiminy Crickets"

[MJAmok]

Originally Posted by LimeRockRacer

Has anyone noticed that e-mail and web posting can be open for mis-interpretation on a greater scale than having a conversation with someone where you can clarify and emote in person?

Has anyone NOT noticed that?!

I am convinced that some day a war will break out because of a mis-interpreted email.

[badgersid]

Anybody needing life insurance please call me or see me at the track.I will cover 2 million for 2800$ per year.Regardless of age or condition.

[AlDelattre]

I would suggest a group hug to get past this, but I need to check my insurance coverage on sexual harrassment lawsuits....

Sid, that's a good deal....

[sydude]

Originally Posted by badgersid

Anybody needing life insurance please call me or see me at the track.I will cover 2 million for 2800$ per year.Regardless of age or condition.

Can I take a policy out on another driver? There are a few I think I can make a bundle on.