Fact CheckedCan Cops Get Life Insurance? They sure can. Because of the nature of their job, many people worry that it’s a high-risk profession.
Hey, this makes sense, as their career requires them to deal with criminals – which means the life insurance company that offers coverage may take on greater risk to protect them.
Conversely, insurance companies consider it a higher risk if someone convicted of a crime applies for coverage.
Fair enough…But let’s get back to the good guys. How do life insurance companies view their applications?
I’m exploring how rates are impacted, the choice of products available, and why independent coverage may be your best bet for police life insurance.
New data from University of Ottawa researchers, shared exclusively with CBC News before its publication, shows the 10 deaths in eight months hasn’t been seen since the early 1960s — but with more than twice as many officers working now compared to then, the overall death rate of on-duty officers is lower compared to past decades.
Death rate among on-duty police officers fallen since 1960s, new data shows, with car crashes top cause
Who Am I & Why Do I Care?
My name is James Heidebrecht, and I own Policy Architects. We are a boutique life insurance company based in 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 many people don’t want to discuss. 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 about death. It’s a way to ensure your family is cared for even when you’re gone.
Can Cops Get Life Insurance That’s Affordable?
Did you know your lifestyle and profession alter how underwriters view your life insurance application? A number of jobs and personal choices 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?
- Traffic Accidents: Law enforcement officers are likelier to be involved in a high-speed car chase than ordinary citizens. Many of them patrol highways or busy traffic areas where there are higher risks for accidents.
- Shootings or Violent Acts: Police are more likely to experience a traumatic injury than the general population.
- First Responders: Police members are often the first to arrive on the scene of an accident, criminal incident, or hazardous situation.
- Higher Job Stress & Suicide Rates – According to studies, “police officers are at higher risk for suicide than any other profession.”
Underwriters must consider that Police officers put themselves in harm’s way. After all, if they don’t assess risk properly, insurance companies will go out of business.
Can Cops Get Life Insurance That’s Affordable, Even When They’re High Risk?
The answer is YES! Police officers are NOT in the same category as hazardous occupations such as commercial fishing, logging, or mining.
Remember, each situation is evaluated on a case-by-case basis, which means underwriters assess your health and exposure to danger. If you have a risky occupation, the insurer may add a “flat extra” to your rate.
This additional charge is tacked on to your premium as a percentage to compensate 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” regarding their life insurance rates and professions.
Psst: As an aside, commercial airline pilots are also looked at favorably.
The bottom line is that 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!”
Your Health is Always Important
The truth is that 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.
Like anyone else, a traditional life insurance company may rate or decline you if you have any moderate health issues. You may want to ditch the health exam altogether and explore simplified or no-medical life insurance.
The Benefits of Simplified Issue Life Insurance When You Are a Cop
Suppose you are a police officer with a medical issue like diabetes or are in a REALLY high-risk profession. In that case, you may want to consider simplified-issue term life insurance instead of traditionally underwritten coverage.
You don’t have to undergo a physical exam. Instead, you are asked a battery of questions to determine if you qualify for better rates. It’s quick, easy, and surprisingly affordable.
If you have serious medical problems and think you’ll be denied coverage, you must speak with an independent high-risk insurance broker to confirm that. If not, you may be better off sticking with topping up your existing group coverage.
Remember that most consumers overestimate the severity of their health issues when applying for life insurance. Clients are healthier than they think, so it’s very important to double-check. After all, it could mean saving a lot of money.
NOTE* If you have a moderate to severe health condition, you may qualify for up to $500,000 of simplified issue term life insurance with Canada Protection Plan, one of the top non-medical providers in the country.
Why Would a Police Officer Want to Buy Life Insurance Outside Their Union?
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.
1. An Individual Life Insurance Policy is More Portable
The first issue is portability. If you have police officer insurance benefits through the OPP, TPS, or the RCMP, they are attached to the job. This means that if you quit, your coverage terminates.
If you’ve developed any health issues while you’re a police officer, you could become uninsurable outside of your group plan.
For example, let’s say you’re a 45-year-old constable and decide to quit the force. You have high blood pressure and depression and want to pursue a job that’s not as taxing. Perhaps you even want to start your own business.
Once you leave the police service, your benefits are gone, and you must apply for coverage. Your age and medical condition make protection extortionately expensive, and in fact, the depression may even disqualify you from traditional coverage, depending on the circumstances.
Ugh. That’s why having your OWN coverage helps. Life insurance is way more affordable if you apply while young and healthy.
2. Individual Life Insurance Offers Higher Coverage Amounts – Group Insurance Death Benefits Are Limited
The second issue is inadequate coverage. While police officers enjoy some of the best benefits, group life insurance is usually limited to 1 to 4 times their salary. For example, if you work for the Ontario Provincial Police and earn $100k annually, your maximum life insurance coverage may be $400,000.
It sounds like a lot of money, doesn’t it?
Let’s say you’re 40 years old, earning $100k annually, and set to retire at age 55. That means over the next 15 years, you’ll earn at least $1.5 million in income for your family. Oh, and don’t forget the government will take 30-40% of that in taxes, depending on how much overtime you worked.
If God forbid, something happens, and you don’t come home tomorrow, your family will not see that $1.5 million you would have earned. Instead, your police officer insurance benefits pay your loved ones a maximum of $400,000.
This replaces your after-tax income for maybe five years. Then what?
Why not top up your group insurance with a personal plan, so your family isn’t burdened with unnecessary financial stress when 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 monthly for similar protection with Wawanesa Life.
3. Individual Life Insurance Is More Affordable & Has Superior Options Compared With Police Group Benefits
You can exchange your term coverage for permanent insurance at any point. Depending on your carrier, you may have a few choices: whole life, universal life, or Term to 100. Most group plans don’t have options for this; if they do, they are very limited.
Yes, your employer pays the premium for your base life insurance policy (usually one or two times your gross salary). But you have to pay extra to top up your coverage amount. Depending on age, topping up group life insurance is often more expensive than purchasing an individual life insurance policy. See the example below.
Police Officer Insurance Benefits vs Individual Life Insurance
Let’s look at an example.
Kevin joined the Ontario Provincial Police when he was 27. Fast-forward 10 years, he’s now 37, married with two young children and a $500,000 mortgage. As a first-class constable, Kevin earns approximately $100,000 annually and expects to retire with a full pension at age 57.
Kevin’s friend and coworker, Pete, recently purchased a personal life insurance policy, so Kevin’s trying to figure out if he should consider it. He’s done some research online and feels that $1 million of term coverage would leave Emily, his wife, in a good financial position if something were to happen to him on the job.
Police Life Insurance Benefits for Kevin
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, which 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 buy up to 3 X Salaries 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. This extra protection will cost him $111.00 monthly ($0.37 X 300 = $111.00). It sounds reasonable, but is that a good deal? He wants to find out.
Police Life Insurance Benefits vs Individual Life Insurance – 20 Years
37 Year Old Male, Non-Smoking, Standard Rating
Option 1 – Apples to Apples
Kevin decides to comparison shop for an individual life insurance policy to cover him until retirement (age 57). Remember, he’s 37, male, healthy, and a non-smoker. For this example, we’re comparing the cost of topping up his police officer insurance benefits (Max $300k) by purchasing an individual $300,000, 20-year term policy with Empire Life.
Police Life Insurance, $300,000
$111.00 per month (OPP)
$26,640 Total Cost
Vs.
Individual Life Insurance, $300,000
$26.91 per month (Empire Life)
$6,458 Total Cost
For Kevin, “a policy with Empire Life costs him 75% LESS per month than the cost of topping up his existing group benefits life insurance plan. A savings of $20,182 over 20 years! ”
Option 2 – More Coverage
Kevin is pleasantly surprised at how affordable a $300k, 20-year term policy is. He wants to know how much it will cost him for $1 million of coverage. He originally thought this amount would allow him to sleep well at night, knowing his family was protected.
Police Life Insurance, $300,000
$111.00 per month
$26,640 Total Cost
Vs.
Individual Life Insurance, $1 Million
$71.10 per month
$17,064 Total Cost
Kevin’s shocked to learn that a “ $1 million 20-year term policy with Empire Life of Canada will only set him back $71.10 per month. Hard to believe, he’ll receive three times the coverage he’s eligible for with his police benefits top-up, at 35% LESS cost! Not too shabby.”
Option 3 – Longer Term
Kevin’s sold on purchasing an individual life insurance policy but thinks he might want coverage beyond retirement. After all, his mortgage has been amortized for over 25 years, and 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?
Police Life Insurance, $300,000 (OPP top-up for 20 Years)
$111.00 per month
$26,640 Total Cost
Vs.
Individual Life Insurance, $1 Million ($500k Term 20 + $500k Term 30)
$88.65 per month
$21,276 Total Cost
“ A combined $500,000 30-year term policy + $500,000 20-year term policy with Empire will cost Kevin $88.65 monthly. That means he has $1 million of coverage for 20 years until retirement and then $500k for 10 years more until age 67. Also, his premiums drop to $60.30 for the last 10 years of the policy. Now, he has protection during and beyond retirement.”
Can Cops Get Life Insurance? YEP
But You Need to Speak to an Independent Agent to See Your Best Options!
Police get the same rates as the general public. The question is what sort of coverage works best for them and why.
It’s always a good idea to check your benefits package to see if your coverage is adequate to keep your family in the lifestyle they’ve become accustomed to. Chances are it’s not. If you have a young family, I recommend a minimum of 10 – 15 times your gross salary in coverage. So, if you make $60K per year, I recommend at least $500K to $1 million in coverage.
Another issue to consider is longevity. Will you be in the police force forever? If not, portability should be considered. This is another reason to consider purchasing coverage independently.
Call us Today!
Not to mention, buying an individual life insurance policy as an alternative to topping up your existing Police group coverage is almost always cheaper (see example above).
We work with the best life insurance companies in Canada. Even if you have health issues, we can protect you. Thankfully, simplified-issue life insurance plans provide a safety net for those denied a traditional policy.
If you have any questions, please give us a call. We’d love to help!
