Life insurance as a product is always sold on the back of one affirmative question. “In the event of your untimely death, how would your family maintain their lifestyle?” This question is all the more impactful when we are talking about life insurance for pilots. Many pilots are in for a shock when they apply for a life insurance policy because of the premium surcharges or aviation based exclusions. Traditional life insurance plans may not have the provision of covering you if you are employed as a pilot. Having said that, if you consult a good life insurance agent then he may present your case in a manner which gets you qualified for coverage through traditional life insurers.
A pilot’s profession is not an impaired risk. Due to the nature of your job you might end up paying flat extra premium on your life insurance policy. Finding a suitable life insurance policy at competitive prices is hard and it becomes more difficult to obtain if your profession is considered as high risk by the life insurance provider.
How To Choose The Best Life Insurance Policy Being A Pilot.
Before we get into the details, if you are a member of professional pilot organizations like Aircraft Owner’s and Pilots Association (AOPA) then you can be a part of group life insurance for pilots. Being a pilot, it is important to understand how life insurance companies will treat your case keeping in mind the risk involved. Flying as an occupation is termed risky and the type of pilot you are would affect your life insurance rates. Being a pilot you will fall into any of the categories mentioned below:
- Private Pilots (Also referred as Corporate Pilots)
- Commercial Pilots
- Recreational Pilots (If flying is a hobby for you)
- Acrobatic Pilots
- AG Pilots, and
- Flight Instructors
Now when you apply for life insurance you have to fill out a questionnaire which will be related to your job profile. Now depending on the type of pilot you are your flying hours, licensing details and other related questions need to be answered. Depending on your answers, the insurance company will determine the risk factor to provide coverage. So, if an individual is a commercial pilot, he would be flying more as compared to a recreational pilot hence he would pay higher premium. Life insurance premiums are not the same for all types of pilots.
Choose A Qualified and Experienced Life Insurance Broker – This is very important. The best option would be to find someone who is an independent insurance agent who earlier was a pilot. The main advantage of working with independent agents is that he has contacts with many life insurance companies and knows the benefits and criteria of each insurer. He would choose the best option available for you based on your individual circumstances. There are organizations specializing in life insurance for pilots.
Check For Aviation Exclusion Rider and The Portability Factor – When you zero in on a life insurance plan, make sure to read the exclusion list. There have been instances in the past where the policy has been issued for a pilot at standard and preferred rates but exclusion has been added. Such exclusions generally mean that if the insured dies while flying an aircraft then life insurance company may not honor a claim.
Pilots change their job more frequently. Hence it is important to make sure that your life insurance policy is portable in nature. This refers to changing of job. Will your life insurance policy be active and valid if you decide to change carriers?
Check For Competitive Rates – If you are an experienced commercial pilot with 100’s of flying hours under your belt and you’re in good physical condition then it is very likely that you get the preferred rates. The rate needless to say, also depends on the term and coverage amount. Experienced pilots fall into the category of standard and preferred rates for one good reason. They are healthy and undergo regular medical and health checkups. This ensures that life insurance companies need not worry about any health related issues while underwriting. It is best to buy individual life insurance because you can lock in rates for longer period of time. Hence no increase in premium when you’re getting older. Group policies generally do not offer lock in rates.
A Case Study To Understand Best Insurance Rates For Pilots:
A pilot who is 55 years old is looking out for a $400,000 life insurance and for a term of 20 years. Now if the pilot holds a student’s license and finds out that there are no many companies offering such low face value policy. The minimum he can get is $600,000 which will increase the premium and it may get out of his budget. In such cases it might be a good option to buy term life insurance with an aviation exclusion clubbed with an accidental and dismemberment rider .It will turn out to be much cheaper. Also as we stated above, more experienced you are less you would pay.
Check For Additional Coverage Options – There might be a possibility that being a pilot you already insured through your employer and looking out for additional coverage. In such a situation, always ask specific questions which best describe your requirement. Some additional coverage which you may require are accidental and dismemberment insurance or income protection for pilots.