Life insurance companies generally offer lower rates for individuals with less risky lifestyles.
As a pilot, you have an important job that comes with some risks. This alone shouldn’t discourage you from getting life insurance coverage. In the event of an accident or death, life insurance can provide financial security for your loved ones.
This guide will help you understand the different types of life insurance available to pilots and how to choose the right insurance policy for your needs.
What is life insurance and why do pilots need it?
Life insurance pays out a sum of money to the named beneficiary in the event of the policyholder's death. Its main purpose is to provide financial security for your loved ones, but it can also be used as a way to help pay for final expenses, such as funeral costs.
As a pilot, make sure your life insurance policy includes a rider that covers you in the event of an aviation-related death. This type of rider is sometimes referred to as an "airline life insurance rider" or a "pilot life insurance rider."
Aviation life insurance policies are designed to cover the unique risks that pilots face. These policies typically have higher death benefits than standard policies, and may also provide coverage for accidents that occur while you are flying.
What does being a pilot mean to insurance companies?
Life insurance underwriters take into account the fact that flying a plane is a risky job.
As a result, you’ll likely have to pay higher life insurance rates for coverage.
Some life insurance companies may refuse to issue a policy for pilots, or they may only offer coverage at increased rates. As a result, it's important to shop around and compare policies from different companies.
What does aviation mean to life insurance companies?
For a life insurance company, there are generally three categories of aviation:
Commercial: Pilots who fly passengers between licensed airports.
Private: This includes flying for leisure, personal travel, or business travel.
Sport: Flying as a hobby or recreational activity. This can include flying model airplanes, gliders, and ultralight aircraft.
Insurers view each of these categories differently when it comes to underwriting life insurance for pilots.
Commercial pilots find it the easiest to get life insurance for lower premium rates. The major reason for this is the strict guidelines that are put on pilot who fly civil air carriers for major airlines. Even though these planes have their complexities, when compared to other categories this type of plane's rate of fatal accidents is 35 times lower. If you're a commercial pilot, you might even be able to qualify for preferred plus rates, which are for low risk applicants. Of course, the rates are also dependent on the rest of your application.
Private pilots might find it a little more difficult to get lower premiums, but it is possible to get regular rates in some situations. Typically, a policy offered to a private pilot includes more conditions related to age and experience. Another factor that can affect rates if you're a private pilot is where you're flying. If you fly over wheat field, the insurer will consider you a lot safer to insure compared to a pilot flying over mountains. If you're a lower risk to the life insurance company, there will be fewer additional premiums added to your policy.
Insurance companies view sport pilots similarly to private pilots because both activities are considered hobbies. The underwriting process for sport pilots is typically more lengthy. The insurer will do a more thorough investigation to determine the risk they are taking on by providing coverage to a sport pilot. If the insurance company labels you as a high risk, you will likely get higher premium rates.
Pilots should check with their life insurance company to see how they classify aviation activities.
Aviation life insurance policy riders
An aviation policy rider is an add-on to a policy that provides additional coverage for aviation-related deaths.
Some insurers offer aviation riders for an additional cost.
How much life insurance should a pilot have?
Insurance experts recommend getting a policy with at least five to seven times your annual income. However, because pilots are required to have life insurance by most airlines, you may need to have a policy that is worth more than this.
The amount of life insurance required varies by airline, but it is typically at least $250,000. Some airlines may require more depending on the pilot's position and responsibilities (they may also help to partially cover the cost of the insurance policy).
What are the different types of life insurance policies available to pilots?
Term life insurance is most popular among pilots. It provides coverage for a set period of time, typically 10, 20, or 30 years. If you pass away during the term of the policy, the beneficiaries receive the death benefit. If you do not pass away, the term life insurance policy expires and no benefits are paid out.
Whole life insurance policies are more expensive than term life insurance policies, but they also provide lifelong coverage. They have an investment component that builds cash value over time. Whole life insurance policies can be a good option for pilots who want to have coverage that lasts their entire life.
How is life insurance affected when you're a pilot?
Pilots are considered to be high-risk applicants, which means they may have to pay higher life insurance rates for coverage.
Some life insurance companies specialize in offering coverage for pilots. As a result, they offer more protection at a better rate (hence why it’s pays to work with an independent broker like Dundas Life).
Commercial pilots typically have an easier time qualifying for life insurance than those who fly privately or recreationally. They are subject to rigorous safety standards and are required to have life insurance by most airlines.
Here are a few things that life insurance companies consider when underwriting for pilots:
- Unless you're on a regularly scheduled airline, you will not be considered for top preferred rates
- If you're a private pilot with less than 300 hours of flying experience and no instrument rating, you will likely have to pay a flat extra fee for your policy. Your policy might also have an aviation exclusion rider, which means that the policy will not pay out if you pass away on a flight that isn't regularly scheduled.
- If you're getting life insurance through an employer, these policies typically don't cover death related to general aviation activities
- Activities that will increase you rates include: aerobatics, experimental aircraft, ultralights
During the application process, you should also expect to fill a questionnaire that is specifically related to aviation activities. This questionnaire will ask about your experience, ratings, flying practices, specialized flying, and the type of plane you fly. All of these factors will affect the premiums you pay because they determine how risky you are to the insurer.
How can a pilot buy coverage?
Pilots can purchase coverage through an employer-sponsored group life insurance plan, or buy it individually. Some insurers offer discounts to pilots, so it's important to shop around.
What are the benefits of having life insurance as a pilot?
Life insurance provides financial security for your family in the event of the pilot's death. It also helps to cover the costs of final expenses, such as funeral costs. In addition, life insurance can replace lost income in the event that a pilot is unable to work due to an injury or illness.
What are some things to consider when choosing a policy as a pilot?
When choosing a policy, consider your needs and budget. Make sure that the policy includes a rider that covers aviation-related deaths. Pilots should compare life insurance quotes from different companies to get the best rate.
Life insurance can be a vital part of your financial plan. By understanding the different types of policies available and how to choose the right policy, you can ensure that their loved ones are taken care of no matter what happens.
Tips for pilots when applying for life insurance:
- Applying for life insurance as a pilot can be complicated. Here are a few tips when filling out your application:
- Be honest about your flying hours
- List any dangerous activities you participate in
- Get life insurance through an employer-sponsored group life plan or purchase it individually
- Make sure the policy includes a rider that covers aviation-related deaths
- Compare quotes from different companies to get the best rate
As a pilot, you have a unique set of needs when it comes to life insurance. We’ve outlined the basics of what pilots should know about life insurance policies and how being a pilot affects your coverage.
If you want more information or are ready to buy a policy, we encourage you to reach out and speak with an expert who can help you find the best coverage for your situation.
Is life insurance more expensive for pilots?
Yes, rates for pilots are typically higher. This is because pilots are considered to be high-risk applicants.
Can a pilot get life insurance if they have a medical condition?
Yes, pilots with medical conditions can still qualify for coverage. However, they may have to pay higher rates for coverage.
What happens if a pilot dies in a plane crash?
If you pass away in a plane crash, your policy pays out a death benefit to your beneficiaries. Aviation-related deaths are covered by policies if there is a rider included in the policy. Most policies have this rider automatically included, but it's important to check with your insurer.
Can private pilots get life insurance?
Yes, private pilots can qualify for life insurance coverage. However, they may have to pay higher rates for coverage because they are considered to be high-risk applicants.
Should a pilot get life insurance through their employer?
As a pilot you can get life insurance through your employer or through a personal plan. Employer-sponsored plans typically have lower rates than individual policies. However, coverage through an employer-sponsored plan may be limited and if you change jobs, you lose the coverage.