What’s Santa’s Life Insurance Risk?

Aaron Crowe | Life Insurance | 8 Dec, 2014 | No Comments


Santa Claus may be the jolliest fellow on the planet, and his annual tradition of giving gifts to all of the children of the world is remarkable, but his positive attitude won’t help him much when it comes to getting life insurance.

Santa’s life insurance needs are probably unattainable. Even if a figure could be determined for replacing all of the toys he delivers for free each Christmas, how can you put a life insurance payout figure on someone who is irreplaceable?

Let’s assume that figure exists. Would Santa qualify for life insurance? Here are some of his risk factors that underwriters might take into consideration:

Santa’s health rating.

After getting Santa’s health records and conducting a brief physical exam, a life insurance examiner would provide information to life insurance companies to come up with a health rating that ranges from “preferred” and “standard” to “decline,” says Mike Kilbourn, CEO of Kilbourn Associates in Naples, Fla., that specializes in estate planning and insurance. In between those are 16 tables, including “uninsurable.”

The difference between the rating of uninsurable and decline is that in a second-to-die life insurance policy — one on both Santa and Mrs. Claus — one of them may be rated uninsurable and the couple would still qualify for a combined rate with a premium that was less than if the insurable spouse was taken alone, Kilbourn says. A rating “decline” is the worst rating, and no offer would be given.

The premiums are based on the health rating the underwriter assigns the applicant. The higher the rating the higher the premium.

Santa smokes a pipe.

Being a smoker will cost Santa about 30% more, Kilbourn says. He likely wouldn’t get a preferred rating, but could qualify as a standard smoker, depending on other factors listed below. Smokers are more likely to die earlier than nonsmokers, and they can sometimes see their insurance rates double.

Santa is a pilot.

Most experienced pilots are acceptable risks, and Santa should qualify with his excellent safety record. However, a review would be needed of his flying history. If he’s had any accidents or he isn’t instrument rated, the insurance company may exclude him from flying coverage, Kilbourn says. If that happens, and Santa died as a result of a flying accident, no death benefit would be paid, Kilbourn says.

But if Santa’s flying record is good and he’s had good training and experience, he may qualify for coverage at the rating based only on the other risk factors, he says.

An insurer may question Santa’s landing on rooftops, which could require extra premiums if any coverage is to be offered at all for such landings.

Santa travels to dangerous parts of the world.

Traveling to Third World countries, including countries at war such as Iraq or Syria, may result in insurance companies postponing making an offer until the travel has been completed, Kilbourn says. The insurance application will ask questions such as: Are you traveling to another country within the next 12 months? Which countries will you visit and for how long?

Santa’s weight and other health issues.

Santa may shake like a bowl full of jelly that endears him to children, but being obese will make him more of a risk to insurance carriers.

Being overweight may prevent him from being given “preferred” or “standard” rating, Kilbourn says, but his rating also depends on other factors, including if the weight gain is recent and the amount of gain as related to other health factors such as high blood sugar, diabetes and heart issues.

Santa’s age is in question.

No one knows Santa’s age. Anyone over 100 years old, as Santa likely is, is difficult to insure by MetLife, according to Brian Beasley, a financial services representative with the MetLife Premier Client Group.

Old age may be one of the biggest hurdles to getting insurance, says Steve Kobrin, an independent life insurance broker who specializes in “higher risk” cases. Unless, Korbin says, Santa can prove he’s much younger than everyone thinks he is.

“I would assume that the Santa of today is really the great-great-great-grandson of the original, and so would be young enough to qualify,” Kobrin says.

Santa should shop around.

Despite all of these factors against him, the good news is that Santa should shop around for life insurance because not all insurance companies will rate him the same, Kilbourn says.

Even though most insurance companies “write” insurance based on only two or three underwriting manuals, they also base decisions on their own experience and judgment, he says. One company may be worried about Santa’s weight, while another may not be as concerned and rate him standard, especially if there are no complicating factors such as diabetes and heart issues.

The children of the world may want to leave a few less cookies out for Santa on Christmas Eve.

Aaron Crowe is a freelance journalist who believes in Santa, and specializes in writing about personal finance and insurance.

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