If you are considering purchasing Term life insurance for drag racers, this new blog post will give you some great options to consider so you don’t spend any more money than you have too. This will also apply to anyone planning on purchasing life insurance for boat racers, motorcycle racers or stock car racers for that matter also.
You have several options to consider so you can purchase the life insurance you need at a premium you can afford. I personally have years of hands on experience in Motorsports racing which is why this market is my specialty.
There are three main directions you can take when purchasing life insurance when you race cars, boats or motorcycles.
Here is the standard route that 90% of the drag racers and other Motorsport racers take.
The normal traditional route would be to apply for your life insurance with the understanding that you want to be covered when you actually are driving a race car, boat or motorcycle. This would be based on applying for life insurance with the concept that you would have a typical life insurance premium just as anyone would have with the simple addition of a rate classification change or a flat extra charge to cover the added risk of driving a racing vehicle.
Just for example, if the base premium for a $250,000 face amount policy with a 20 year term period would be $800.00 and you had a $2.00 flat extra charge which would break down to $500.00 ($2.00 X 250 = $500) you would now have a $1,300.00 total premium. Always remember that the flat extra charge is based on the flat extra amount as in this case $2.00 times each $1,000 worth of coverage you are applying for as in this case which is 250.
Naturally we shop the market for our applicants to locate the company who would offer the lowest rates, the best rate classification and the lowest flat extra rate.
Keep in mind that a “flat extra” rate can be removed from the policy if you stop racing.
To exclude the actual racing cost of the policy or not to exclude is the next question to consider.
I find that many times a drag racer or any other type racer will have a spouse that is getting nervous with the idea of driving a race car and having a fatal crash leaving the spouse’s dependents holding the bag with all the outstanding debt which would be a financial disaster to say the least. This is especially bad if there are children involved and they are very young.
There is an option called an “exclusion rider” which would eliminate any extra cost of the policy due to the actual racing. The policy would offer coverage for the usual natural causes of death and usual causes of accidental death but it would not cover driving down any racetrack.
If you want to purchase life insurance and not pay for an additional charge for the racing events, you can exclude the racing if you wish and your premium will be the same as if you do not race at all. We work with over 40 life insurance companies so we can match the correct company to fit your specific needs for life insurance and your budget.
The only side effect is if you lost your life racing, the policy would not pay the face amount. This is a question that you would have to make on your own and naturally discussing this with your spouse. Some racers will go the exclusion route because they need life insurance but are not concerned or worried about being killing on a racetrack.
Stacking otherwise known as laddering your policies are another option that might work out well for you. Here is how it works.
Take a few minutes to carefully consider this option that could save you some money and still be covered while you are driving your race car. Here is a simple example to show how this laddering option can work for you. In this case you need a face amount of let’s say $1,000,000. If the natural premium of the policy and the flat extra together increase the premium to the degree that the policy becomes too costly you can go this route.
Apply for a $500,000 face amount policy with the coverage built in for racing your vehicle and then at the same time apply for another $500,000 policy with an exclusion rider for the actual racing which would totally eliminate the extra cost of the racing coverage. This would give you a grand total of $1,000,000 worth of life insurance coverage with the saving of having only half of the face amount increased by a flat extra.
You would not have a grand total of $1,000,000 if you were killed by racing but many people feel this is a good solution to lower their annual premium and still have the full face amount for natural causes and the many other accidental causes of death. You would just have the limitation to $500,000 for a racing exposure.
Remember that the flat rate is calculated by the dollar amount of the rate of let’s say the $2.00 times the one thousand dollars of coverage. The higher the face amount the higher the extra cost of the racing fee. This can make a considerable advantage when you have face amounts of $500,000 and above.
We shop the markets hard for our clients and work with the underwriters to promote the largest premium savings.
Hopefully these different ways to purchase Term life insurance for drag racers helps you to make the correct decision. If you have any questions at all concerning the purchase of life insurance for drag racers, boat racers or motorcycle racers do not hesitate to give me a call.
We can quote your Term life insurance needs right over the phone. Thank you for visiting our website BestChoiceLifeInsurance.com and reading this blog post. Stay safe and be careful the next time you are at the racetrack.
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