Psst! Can Cops Get Life Insurance and What is the Impact of Their Job on Rates?

Can Cops Get Life Insurance? They sure can. I think because of the nature of their job a lot of people worry that it’s a high risk profession. 

Hey, this makes sense as their work requires them to deal with criminals – which means the life insurance company that offers coverage may take on greater risk to protect police officers.

Conversely, if someone convicted of a crime applies for life insurance, insurance companies consider this to be a higher risk as well.

Fair enough…But let’s get back to the good guys. How do life insurance companies view their applications? 

I am going to dig into how rates are impacted, the choice of products available and why independent coverage may be your best bet when it comes to police life insurance.

Between 2006 and 2015, in this database, Alberta, British Columbia, Ontario, and Quebec combined
for 45 fatalities for police officers, or a rate of 0.7 fatalities per 1,000 police officers. In total, 40 of these fatalities were for a male police officer.

 

Determinants of Injury and Death in Canadian Police Officers, CJR 

My name is James Heidebrecht and I am the owner of Policy Architects. We are a boutique life insurance company operating out of Canada.

I love my job. It allows me to meet terrific people and to help them protect their families. As an extrovert I can’t think of a better career. 

Life insurance is one of those purchases that a lot of people don’t want to talk about. Come on let’s face it who the heck wants to think about death? The thing is, life insurance is more about life and love than it is death. It’s a way to make sure that your family is taken care of even when you’re gone. 

Did you know your lifestyle and profession alter how underwriters view your life insurance application? In fact, there are a number of jobs and personal choices that are considered high risk. 

So does being a police officer fall into this category?

Well, let’s find out.

Why is Life Insurance for Police Officers Potentially Higher Risk?

1. Traffic Accidents – law enforcement officers have a higher likelihood of being involved in a high-speed car chase than your ordinary citizen. Not to mention, many of them patrol highways or busy traffic areas where there are higher risks for accidents. 
2. Shootings or Violent Acts – Police are more likely to experience a traumatic injury or disorder that results in a fatality than the general population. 
3. First Responders – Police members are often the first to arrive on the scene of an accident, criminal incident or hazardous situation. 
4. Higher Job Stress & Suicide Rates – According to studies, “police officers are at higher risk for suicide than any other profession.” 

The fact Police officers put themselves in harm’s way has to be considered by underwriters. After all, if they don’t assess risk properly,  insurance companies will go out of business. 

The answer is YES! Police Officers are NOT in the same category as hazardous occupations like Commercial Fishing, Logging or Mining.

Remember, each situation is evaluated on a case by case basis which means underwriters assess your personal health and exposure to danger. If you have a dangerous occupation, the insurer may tack on a “flat extra” to your rate.

This is an additional charge that is added to your premium as a percentage to make up for the increased risk. 

This is not the case with police officers. So congratulations, it looks like cops get a “get-out-of-jail-free card” when it comes to life insurance rates and dangerous professions.

Psst: As an aside commercial airline pilots are looked at favourably as well.

Bottom line, if you’re a law enforcement officer in Canada, you have an excellent chance of receiving standard rates or better on your life insurance application!

GOOD NEWS:  If you’re a SWAT, ERT, TRU or tactical officer, you can also qualify for Standard insurance rates with traditional carriers!

Truth is, life insurance companies find it easy to underwrite police officers because they complete annual physicals. By the way, underwriters love data, the more test results the better. Recently, a colleague of mine had a client who was a Toronto Police Officer and his client received preferred life insurance rates with Ivari Canada. 

Just like anyone else, If you have any moderate health issues, you may be rated or declined by a traditional life insurance company.  In this case, you may want to ditch the health exam altogether and explore simplified or no-medical life insurance.

That’s a great question.

Police officers are given life insurance as part of their group benefits package. It’s one of the perks of the job. Not to mention, it’s free! So why the heck would they want to buy a policy independently?

Well, that’s an easy question to answer and it’s three-fold.

Why not top up your group insurance with a personal plan so your family isn’t burdened with unnecessary financial stress you pass away? A $500,000, 20 Year Term policy with RBC life insurance costs a 40-year-old, non-smoking, male, $47.61 per month.

His female counterpart pays $34.57 per month for similar protection with Wawanesa Life.

Let’s look at an example.

Kevin joins the Ontario Provincial Police when he’s 27. Fast forward 10 years, he’s now 37, married with 2 young children and a $500,000 mortgage. As a first-class constable, Kevin earns approximately $100,000 annually and is expecting to retire with a full pension at age 57.

His friend and co-worker, Pete, recently purchased a personal life insurance policy so Kevin’s trying to figure out if it’s something he should consider.  He’s done some research online and feels that $1 million of term coverage would leave Emily, his wife, in a good position financially if something were to happen to him on the job.

Kevin checks out his OPP group benefits booklet and discovers that his current police life insurance is 1 X his annual salary – approximately $100,000.  If something happens to him, Emily and his two daughters will receive a $100,000 tax-free cheque from Wawanesa Life, the company that underwrites all the OPP life insurance plans. This money is there to help them adjust to life without his salary as a breadwinner. 

This doesn’t seem like a lot of money considering Kevin will earn $2 million-plus in salary over the next 20 years leading up to his retirement at age 57. Thankfully, he continues reading and sees the option to purchase extra life insurance to supplement his base amount of $100,000. According to his booklet, active members can purchase up to 3 X Salary on top of their base amount. The cost? Thirty-seven cents per thousand dollars of coverage. 

For Kevin, that means he can purchase an additional $300,000 of coverage (3 X $100k salary) through his police officer insurance benefits. It will cost him $111.00 per month ($0.37 X 300 = $111.00) to secure this extra protection. Sounds reasonable but is that a good deal? He wants to find out.

Kevin decides to comparison shop for an individual life insurance policy to cover him for the additional supplement until retirement (age 57). Remember, he’s 37 years old, male, healthy and a non-smoker. For the purposes of this example, we’re comparing the cost of topping up his police officer insurance benefits (Max $300k) with purchasing an individual $300,000, 20-year term policy with Empire Life.

Ok, Kevin’s pleasantly surprised at how affordable a $300k, 20 year term policy is. Now he wants to know how much will it cost him for $1 million of coverage? This was the amount he originally thought would make him sleep well at night knowing his family was protected. 

Kevin’s definitely sold on purchasing an individual life insurance policy but he’s thinking he might want coverage beyond retirement. After all, his mortgage is amortized over 25 years not to mention, he’s thinking of starting a business when he retires from the OPP at age 57. He’s wondering how much it will cost him for a longer term? 

His independent life insurance broker makes a great suggestion. Why not split his coverage between Term 20 and Term 30?