Life insurance is important if you have a family or other dependents that benefit from your income. When you have adequate life insurance, you can rest easy knowing that your loved ones will be cared for in the event of an emergency. They won't be plunged into debt paying for your medical bills, funeral arrangements, and the living expenses your income once covered.
Because of the increased risks associated with firefighting, people in this profession especially need life insurance. Some fire departments offer their workers life insurance. Unfortunately, most of these policies are inadequate on their own. Some only cover deaths that happen on the job, while others simply don't pay out enough to cover most families. For this reason, most firefighters should purchase a life policy to supplement whatever their department offers.
Firemen not only fight fires, which can be deadly, they also act as first responders in a variety of emergency situations. They are often also trained as first-line medical technicians, and they can find themselves facing a wide variety of emergencies. Fighting fire and responding to emergencies are both activities that come with an increased risk of death.
Firefighters face a greater risk of dying on the job than most workers, regardless of their role within the fire department. According to the Bureau of Labor Statistics, fire department employees with the following titles suffered death due to an event that occurred while they were working:
Managers of Firefighting and Prevention Workers
Supervisory Fire Marshalls
Fire Inspectors and Investigators
Forest Fire Inspectors and Prevention Specialists
Emergency Medical Technicians and Paramedics
Ambulance Drivers and Attendants
The Bureau of Labor Statistics also tracks causes of death. Firefighter deaths on the job are generally due to one of three causes:
Fires and explosions
Other accidents (falls, overexertion, and other incidents)
Each year, firefighters are on USA Today's most dangerous jobs list. The fatal injury rate for firemen is 8.9 per 100,000 workers, which is over double the national average of 3.5 per 100,000 workers. This increased risk of death makes life insurance for firemen a necessity.
First, firefighters need to choose which type of life insurance best suits them. There are two main types of life insurance. Different people prefer different coverage types depending on their unique financial situations. The two types of life insurance are:
Term life is valid for the specific amount of time you choose when you purchase the policy. Most commonly, term life plans are offered for 10, 20, and 30-year terms. Some insurance companies offer term plans in increments of 5 years.
Term life insurance operates similarly to car and home insurance in the sense that you're paying for coverage for a specific time period. During the term, you are covered and your beneficiary will receive the amount of your policy in the event of your death. If the policy expires and you're still alive, neither you or your beneficiary will receive anything.
As its name suggests, permanent insurance gives you life insurance coverage for the rest of your lifetime. If you want to end your insurance policy early, you can do so by cashing it out. Because of this option, permanent life insurance policies can also be used as investment tools. You're putting money into the policy and can opt to take money out at a later date if you so choose.
Term life tends to cost significantly less than permanent life insurance due to its shorter nature and because it isn't an investment tool. Compare term vs. permanent life insurance to determine which is best for you after carefully analyzing your current budget and future needs.
According to the National Fire Protection Agency, there are an estimated 1,115,000 firefighters in the U.S. Here is the breakdown of those firemen:
370,000 career firefighters (33%)
745,000 volunteer firefighters (67%)
With 2/3rds of American firemen working on a voluntary basis, you might think that surely fire departments cover their life insurance and healthcare benefits. Unfortunately, there are many volunteer firefighters who do not receive any benefits from their fire department. In fact, departments aren't required to provide health insurance even when volunteer firemen work over 30 hours per week.
The majority of volunteer firemen hold other jobs. For this reason, the U.S. Treasury decided that firefighters and emergency personnel are exempt from the Affordable Care Act rules. This exemption means fire departments aren't required to provide them health insurance. Even if a volunteer firefighter works full-time hours, the federal government does not consider them a full-time employee.
The benefits fire departments offer vary widely because of the way departments are structured and funded. Different fire departments fall under different government bodies. Most fire departments fall under one of these three forms of government:
Each individual government body votes to determine the pay and benefits (if any) offered to their volunteer firemen. This arrangement results in very different practices in different locations. Often, whether or not volunteer firefighters have benefits depends on specific local factors, such as the perspective of the mayor and city council, or the socioeconomic status of the residents and, as a result, the amount of available tax dollars.
If your department offers you life insurance, carefully examine it to determine if you need supplemental life insurance as well. Some fire departments offer life insurance that provides different coverage depending on if:
The death occurred on-the-job
The death occurred off-the-job
Some departments only offer insurance that covers injuries that occur on the job. These can be full insurance policies, or Accidental Death and Dismemberment Insurance. Although any insurance is beneficial, you want to make sure you obtain the full coverage you need.
Accidental Death and Dismemberment Insurance, sometimes referred to as AD&D insurance, is a type of insurance commonly offered to volunteer firemen by their departments. Accidental Death and Dismemberment Insurance covers healthcare costs for certain injuries and provides a certain amount of money in case of death. It is neither a full life insurance policy nor a full health insurance policy.
Anyone who has Accidental Death and Dismemberment Insurance should supplement it with another life insurance policy that offers full coverage. If you have two policies, your beneficiaries can receive the full amount of both policies if you pass away while on the job.
Accidental Death and Dismemberment Insurance covers some healthcare expenses. You can use this insurance type if you experience any of the following injuries while on the job:
Loss of sight
Loss of hearing
Loss of speech
Loss of a hand or foot
Loss of an arm or leg
Partial or complete paralysis
These types of insurance plans do not cover basic medical care. They also do not cover illnesses or injuries that don't result in the outcomes listed above.
Life insurance companies consider many factors when determining the cost of your premiums. Your occupation is one factor, so having a high-risk job can impact your rate. That said, your occupation isn't the only or even the most important factor influencing the cost of your life insurance coverage.
The factors that weigh into your premium cost most heavily are your:
Desired insurance type (term or permanent)
Desired policy amount
Family health history
Even though fighting fires is a high-risk job, the actual risk of death for an individual firefighter isn't incredibly high. If you search, you will find that some companies don't charge an increased rate because of your occupation. For most firemen, life insurance rates will be similar to or only slightly higher than the rates offered to others that share their age, gender, and health characteristics.
Before purchasing life insurance, check with your department to determine what firefighters life insurance benefits they offer. If they offer a life insurance policy, find out the total policy amount. Also, determine if your beneficiary would receive the full amount even if your death didn't occur on the job. Once you know that information, you can determine how much more insurance you must purchase to meet your family's needs.
You can purchase life insurance through three sources:
Online insurance brokers
Traditional, in-person insurance agents
An insurance company directly
The benefit of going through an insurance broker or agent is the ability to obtain personalized help in deciding which insurance company works best for you. When you purchase from an insurance company directly, they can help you determine the amount of coverage you need. They will never suggest another company's policy, however, even if another one is more suitable for your situation.
At Policy Scout, we offer an online tool to help you compare and contrast insurance policies. We also have insurance professionals on hand to assist you with finding your ideal policy, so you can relax knowing your family will be covered in the event of an emergency. Contact us today for more information on your life insurance needs.