Although most people consider flying to be a safe form of travel, even safer than cars, life insurance companies have been known to charge higher premiums on term life insurance for pilots. Life insurance companies ask occupational details on a life insurance application, and many life insurance companies will charge higher life insurance premiums for individuals who are in a risky occupation.
Just because the insurance company may charge a higher premium, it does not negate the need for life insurance for pilots, in fact pilots may need term life insurance even more than the average individual.
There are a handful of life insurance companies which will side with pilots and will not rate them a higher risk, which is why it is important to work with an experienced independent life insurance agent who knows which companies to work with, and who can shop your rate around.
The first step in purchasing life insurance is to fill out a life insurance application, which is where you must disclose you are a pilot. The life insurance application also asks medical questions, driving record questions, and other lifestyle questions. The way you answer these questions helps the insurance company underwriters to determine your risk to the insurance company.
Your answers to these questions in addition to your medical exam, driving record, and Medical Information Bureau report will be used to assign you to a specific risk category, which determines the premium you will pay for your life insurance policy.
Just like for most hazardous activities, there are several different factors the life insurance company will consider. Life insurance companies most will most likely not rate each pilot the same. There are specific questions the life insurance company will ask on the application.
All of these questions will help the life insurance company judge your insurability risk, which will then to help to determine your premium. It is important to answer these questions honestly, just like all of the other questions on the life insurance application. This will ensure the life insurance company will be able to give you the life insurance rating which will be correct for you.
It is a possibility being a pilot could help you in obtaining affordable life insurance coverage. The process of becoming a pilot is a vigorous process and usually requires a health checkup. Many pilots also have a military background, which takes hours of physical training. If you are a commercial pilot you must also be in good health in order to keep your licenses. As you may know, the better your health, the more likely you are to get a preferred life insurance rating. Many airlines will offer a life insurance benefit, but most pilots find it is not portable (they can’t take it if they leave or retire), and it is not enough life insurance protection.
When you are applying for life insurance and you are in any risky occupation or hobby, it is important to shop your rate among different life insurance carriers. Working with an independent agent allows you to find the company or companies who will offer the best rates for pilots looking for term life insurance coverage. The life insurance rating will also be based on any other medical conditions that you may have.
Certain companies are better at working with certain conditions, which is why it is important to have access to multiple companies. It could take hours or days to do all the work yourself, but with a few clicks, an independent agent can do the work for you, while saving you money. If you already have a life insurance policy, and think you may be overpaying it may be a good idea to shop your policy out to see if you can save any money. If you have been declined because of being a pilot, it was most likely because you applied with the wrong company. It is worth taking a second look to see if a term life insurance policy is still an option.
Regardless of whether you are a commercial, private, or recreational pilot many insurance companies will consider you to be much riskier than a typical application. This is because many insurance companies consider flying to still be an activity that is risky. There are many companies who will flat our reject your application for life insurance because you are a pilot, without any other considerations.
Other companies will give you a higher rating than you would have received if you were not a pilot, such as they would if someone had adverse medical conditions. Many pilots who are healthy feel it isn’t fair to be lumped into paying premiums which an unhealthy person would have to pay, just because they fly a plane.
One thing to be careful about when purchasing a life insurance policy for a pilot is to be sure to make sure the policy does not contain any exclusions. Some insurance companies may issue the policy at a rating as if the applicant is not a pilot, but will put an exclusion in the policy. An exclusion may state if the insured dies in any plane related incident than the insurance company reserves the right to not pay the death benefit to the beneficiaries.
In the next post of this two part series about the importance of life insurance for pilots I will discuss: