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In This Article We Will Discuss The Process For Purchasing Life Insurance For Pilots, Whether You Fly Commercial Or Private Planes
Most likely you’re reading this article today because you or a loved one is a pilot and interested in purchasing life insurance. You may have experienced difficulty in applying and being approved for life insurance because of your recreational or professional commitment to flying an airplane. And you’re here today because you want to know how you can qualify for life insurance despite your connection with planes. If this describes you, then you’ve found the right article.
My goal today is to provide you with all the information necessary for you to qualify for life insurance despite being a pilot.
NOTE: Would you prefer me to present this information to you in video format? Watch the video below for the complete presentation. Enjoy!
Specifically, We’ll Discuss A Number Of Factors As They Relate To Your Insurance Application, Including:
- Why You Should Purchase Life Insurance As A Pilot
- What Factors To Consider When Applying For Life Insurance As A Pilot
- How To Give Yourself The Best Odds Of Success
- How To Get The Best Price And Coverage
- What Kind Of Life Insurance To Purchase
Why buy life insurance as a pilot?
One of the biggest reasons pilots look for life insurance is because there’s some sort of event in their life, often the loss of a loved one, that allows them to see the economic impact that death has on the surviving family.
You may think that the unexpected will never happen to you, like a plane crash or accident. Pilots are skilled professionals, but sometimes things can happen that are completely out of their control. This is why life insurance is so important.
You want to be able to protect the living, to make sure if by some random chance you lost your life doing what you love that family you leave behind would be protected. The main reason people that are pilots buy life insurance is their realization that life is fleeting and they recognize the activity they engage in as a pilot can be risky.
Being covered with insurance on some level to protect against the worst case scenario is much smarter than not being covered and taking your chances.
What factors should you consider when buying life insurance as a pilot?
In this section I’m going to specifically talk about what factors contribute to an underwriting decision. For those of you who are pilots looking for life insurance coverage, there are several factors involved, but not necessarily all of them will have an impact on your application.
Take a balanced view of all the factors and make a decision on what pricing fits with your personal budget. My goal here is to give you the big picture so you can gain a better understanding of how each of these circumstances come into play when it comes to the underwriter’s decision.
Private, commercial, or student pilot
Your status as a pilot impacts your level of insurability. Let’s break down each of these and determine what level of coverage will be available to you.
If you are a student pilot, it will be much more difficult to qualify for a life insurance plan when you are not certified or instrument rated.
If you’re a private flyer, most likely what life insurance companies will want to see is the length of time you fly on average every month, as well as a combination of your level of certification and licensing.
If you’re a commercial pilot, the same rules apply as a private pilot. Flight hours as well as certification and licensing will be important factors.
The likelihood of getting a life insurance policy at standard or better rates as a private or commercial pilot are fairly high, assuming you are in good health.
The key is to find the right company that’s more flexible with pilots because some companies will completely discount you and rate you up tremendously because they have no experience dealing with pilots.
We hear at Buy Life Insurance for Burial have the knowledge necessary to figure out which of the companies out there will give you the best overall package deal.
Are you instrument rated?
Having an instrument rated designation will increase your chance of an underwriter looking favorably upon your life insurance application as a pilot.
Are you certified or licensed?
If you’re certified or licensed, like in many professions, this will improve your chances of a better premium. It may also save you from experiencing a flat extra rate up or any sort of increases in your price.
Type of aircraft typically flown
The type of aircraft that you fly will have an impact on your level of insurability. Some aircraft has the perception and history of being more risky than others, so make sure to honestly list the kind of aircraft that you fly.
Average monthly fly time
Again, experience matters as with any sort of risky endeavor or activity, so the more experience you have, the higher the likelihood that the underwriter will look at your case and give you more flexibility in your qualification standards.
Accidents and incidents while flying
As with any profession, if you have a history of accidents or incidents, it may be looked at more negatively than if you have a clean record. Your pilot record can also have an impact on the premium you pay.
What rate expectations can I have for private commercial pilots and student pilots?
Most likely, depending on whether or not you’re in overall good health, the likelihood that you will get a standard rate or better as a commercial or private flyer is fairly high. You may be able to apply for preferred rates depending on which companies we look at.
However, there is a chance, especially if you’re a student pilot or you don’t have the necessary instrument ratings, certifications, or experience flying that you may get what’s called a flat extra.
A flat extra is an additional coverage price above and beyond the premium that you’re rated for. The concept is simple. You’re qualified at a certain underwriting rate based upon your health history and then an added expense is put on your life insurance premium to account for the fact that you are engage as a pilot.
Flat extras are priced based off on a rate per thousand of coverage. For example, if you purchase $200,000 of coverage at $1,000 a year and the flat extra is $5 per thousand in coverage, that means you’ll pay an additional $1,000 on top of the $1,000 premium for a total of $2,000 per year. This extra amount allows you to be covered not just while you live your life outside of piloting, but also while you are piloting.
One thing that you may want to consider adding to your policy is what’s called an exclusionary rider. An exclusionary rider will cover you in all circumstances other than piloting. However, if you pass away from some sort of event while you are piloting the life insurance is no good and will not pay out.
Exam or non-medical application
One question I get from a lot of clients is whether or not they should take an exam in order to determine their level of insureability. An exam is something that is optional these days because there are two primary ways to get qualified for life insurance.
You can opt for a fully underwritten policy in which you undergo a physical, a blood sample will be taken, and your vitals will be recorded in addition to completing an application.
You typically get a better price if you do an exam and are in decent health.
The alternative is a non-medical policy. A non-medical policy is designed to only look at your health record already in existence and does not require an exam. The problem with a non-medical policy is that, while they’re much more convenient and usually a little bit faster on response time, ultimately the price point you’ll pay is generally 50 to 100 percent higher than a policy with an exam.
The reason being the underwriter has limited access to your medical records and has to determine insureability based off of past information, not present information. So understand at the end of the day, you may be in a situation where your only options for life insurance coverage, especially with being a pilot, is to go the exam route because it will provide a better price.
Types of life insurance available
There are different types of life insurance products available for pilots. Let’s take a look at the basics of each of these policies.
Term Life Insurance
Term life insurance is designed to cover temporary obligations for a fixed period of time at level premiums. Term life insurance is the most popular form of insurance, chiefly because you get the most coverage for the least amount of money.
However, the drawbacks of term insurance is the term itself. You may outlive the coverage and still need it or have it in place after it is not necessarily needed. However, because most people are looking to cover obligations that are temporary in nature, term insurance makes sense as a predominant source of protection.
Term Life Insurance Coverage – 10 Year Term – $100,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $250,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $500,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $1,000,000 in Coverage
Whole Life Insurance
Whole life insurance, unlike term insurance, is permanent protection. It doesn’t cancel due to age or health and fully protects you from the first day with level premiums.
Rates For $10,000 In Burial Insurance
Rates For $25,000 In Burial Insurance
$150,000 Whole Life Insurance, Life Pay
$250,000 Whole Life Insurance, Life Pay
The biggest drawback to whole life insurance is that the price point is usually 5 to 10 times as much as term insurance.So many people pass up on whole life despite some of the advantage simply because they can’t afford it.
Universal Life Insurance
Universal life coverage is designed to be a hybrid policy between permanent and temporary coverage. You can custom tailor the length of the universal life plan and design the premiums to a level that you’re comfortable with.
However, you have to be careful that these types of plans are designed correctly because if you do not design them with future planning in mind as well as prudence, you may find that your policy collapses and doesn’t actually pay the way you want it to. Many people have lost their universal life coverage because they were poorly designed.