Life Insurance for Pilots
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Life Insurance for Pilots
Imagine That You Are A 35-Year Old Non-Smoker In Excellent Health And You Are Shopping For A Term Life Insurance Policy. You Should Have A Relatively Simple Time Of Finding An Inexpensive Policy To Suit Your Needs.
Now Imagine That Same Scenario, With One Big Adjustment: You Are A 35 Year Old Non-Smoker In Excellent Health Who Works As A Commercial Pilot. It Should Still Be Simple To Find A Suitable Pilots Life Insurance Policy, Right?
Unfortunately, in many cases, pilots have a difficult time finding affordable life insurance coverage because their jobs mark them as “high risk” clients.
A candidate will be considered “high risk” if his or her health, medical history or lifestyle choices have the potential to lower their life expectancy. If a client is determined by an insurance underwriter to be high risk, they will pay higher premiums for coverage.
Occasionally, if the risk of insuring a client is too great for the carrier to take on, the client will be declined for coverage or will be charged a flat extra for coverage. This is a set dollar amount added to your premium, per $1000 of the policy, for either a set period of time or for the duration of your policy. For example, if your flat extra is $15 and your policy is 100,000, your flat extra will be $1,500.
Because pilots have high risk careers, the flat extra for coverage will be permanent.
High risk life insurance policies – sometimes known as impaired risk policies – are policies specially designed for individuals with high risk professions, hobbies, habits or diseases.
The premiums you are quoted are determined by four risk classes:
1. Substandard: candidates in this class are determined to have a lower life expectancy than an average person. The premiums in this category will be high.
2. Standard: if your life expectancy is about the same as an average person’s, you will be placed into a standard risk class. This risk class sets the guidelines by which all other premiums are determined.
3. Preferred: if a client’s life expectancy is predicted to be longer than the average person’s, he or she will be considered “low risk” and will earn a preferred rating. The premiums in this risk class are lower than standard premiums.
4. Declined: in some cases, a client will be considered too great a risk and will be declined coverage.
Insurance underwriters determine the above risk classes, and the risk classes determine your premiums.
It is the job of an underwriter to take on the greatest amount of business for the carrier, while ensuring that the company remains profitable. It will cost a company less to insure a low risk client, which means the better your risk class, the lower your premiums.
The first step to understanding why a pilot may be considered a high risk client is to understand that all companies view risk differently.
Some insurance carriers participate in what is known as aviation exclusion, which means you will be automatically denied coverage if you are a pilot. Helicopter pilots, crop dusters and private pilots are particularly susceptible to being declined for coverage.
This is because a private pilot is required to have the least amount of practice hours – around 40 hours minimum – before obtaining a license. In many cases, private pilots will not even need a license to fly, particularly is the aircraft is under 300 lbs and is classified as an “ultralight” aircraft.
A commercial aircraft operator may have an easier time of obtaining coverage, simply because piloting a commercial airplane requires the most amount of practice hours and skill.
Because every company assesses risk differently, it is possible to find an affordable life insurance pilots policy – no matter what type of pilot you may be!
Your best bet to presenting your risk favorably to underwriters is to work with a reputable agent!
Our agents know what underwriters look for in potential clients when offering life insurance for private pilots, including:
• Your aviation certifications.
Each endorsement and certification you’ve received makes you a safer pilot – and less of an insurance risk. Be sure to notify your agent of when you received your pilot’s license and of any endorsements you have, such as poor weather endorsements!
• How many hours do you fly annually?
This is a very important factor underwriter’s look at when assessing you for coverage. A pilot who flies more than 100,000/year is likely to decrease his or her risk of being involved in a fatal accident by almost 25%! If you currently have less than 500 hours under your belt, don’t worry. The more hours you practice – and the more frequently you update those hours and notify your agent of the updates – the greater your chances are of lowering your risk class.
• Aviation and Motor Vehicle Records.
A violation on either of these records will be a red flag to underwriters, marking you as a higher-risk client.
• Your medical history.
Health issues are, perhaps, some of the biggest reasons why individuals have a difficult time getting covered. If you are a smoker, obese or have had/currently have heart conditions, you should speak to your doctor and begin taking measures to improve your health. The healthier you are, the lower your premiums will be!
Our Gold Coast agents are skilled and experienced with finding pilots the best life insurance coverage out there. We know that pilots are highly skilled individuals and that the risk associated with this career choice is often exaggerate.
Additionally, our agents have expert knowledge of the piloting industry. We take the time to get to know you as a person and we assess your risk through the Federal Aviation Administration’s guidelines, as well as from the perspective of an insurance underwriter.
This allows us to see if you are taking unnecessary risks and helps you lower them. Because every carrier assesses risk differently, it can be overwhelming to find a carrier who will insure you.
Our network is wide, and we know which carriers don’t view pilots as risky insurance investments.