Do You Fly Naked?
Don't laugh. Surprisingly, there are more and more pilots flying naked every day. Not bare-skin naked, of course, but naked in a more serious way: flying without a life insurance policy that covers general aviation activities. Seth Legatowicz of Pilot Insurance Center explains what you can do to make certain you're covered.
At the insurance agency where I work, we talk with hundreds of fellow pilots every week about aviation and insurance. I am amazed at the number of pilots that do not know whether or not their life insurance covers them if they die in a general aviation accident. Do you?
For example, many employers provide group term life insurance coverage as an employee benefit. Unfortunately, it seems as if employees seldom read the fine print in these policies. In my experience, the majority of employer-provided plans exclude general aviation in death claims.
Make sure that you are covered
You need to review your current policy or call your agent to find out if you are covered while flying. If your policy has an "Aviation Exclusion Rider" or other aviation-oriented restrictions, you should seriously consider obtaining coverage that will provide for your family in all circumstances of death. If you do not have any coverage at all, you need to evaluate if your family will be financially stable without you.
Even if you do have coverage with no aviation exclusions, you may be paying too much for your policy. Although many life insurance policies penalize those of us who fly general aviation aircraft, there are now insurance companies that actually offer preferred rates to pilots!
Why do insurance companies have aviation exclusions?
Most underwriters consider aviation activities to be an added risk to the other possible risks that could result in a claim. They also tend to group all types of aviation together in determining risk. Thus, the well-trained and experienced instrument-rated pilot flying a certificated airplane may end up being treated the same as an airshow pilot flying an experimental aircraft while performing low-level aerobatics.
But wait Aren't pilots healthier and more safety-conscious than the general public?
We certainly think so, but until recently insurance companies have not taken this into consideration. Most insurance companies do not give credit to pilots for having regular medical exams, which can catch life-threatening problems early. Ironically, better rates often go to the vast population of non-pilot insureds, many of whom never visit a doctor unless serious symptoms develop.
On average, pilots are also better educated and have a higher income than the non-pilots. Both are positive life expectancy factors, yet pilots often do not benefit from these facts when it comes to life insurance.
Are there companies that focus on the life insurance needs of pilots?
Yes, there are! There are now several insurance agencies — including the one I work for (Pilot Insurance Center in Dallas) — that specialize in providing pilots with the best life insurance coverage at the lowest rates. My agency is staffed by pilots with over five decades of aviation experience.
Life insurance rates in general have come down sharply in just the last couple of years. In addition, an increasing number of insurance companies are beginning to realize that most pilots are actually excellent insurance risks. So if you haven't shopped for comparative quotes lately, there's a high likelihood that you're paying too much in premiums, and a real possibility that you won't be covered if you die in a general aviation accident.
Make sure that you choose a company that understands aviation
Such companies can differentiate themselves from the competition in many ways. Choose companies that are aviation-knowledgeable to ensure the quote you receive is accurate by basing your rate on normal underwriting procedures and taking into account the type of flying that you do. This way, you can eliminate those ghastly rate hike surprises at the end of an underwriting process. We frequently hear stories from pilots who jumped through hoops to get an attractive rate they were quoted, only to wind up being offered a policy at twice the initially-quoted rate after their flying activities were factored in by the underwriter.
Work with an aviation-oriented insurance agent who has a close relationship with the insurance underwriters
This helps ensure favorable consideration for pilots, and can help minimize the turnaround time and surprises between the time you make application and the time your policy is issued. Just as it's usually a real plus for your Aviation Medical Examiner to be a pilot, it also can be extraordinarily helpful if your insurance agent is a pilot, too.
Whatever you do, please review your current policy or consult your agent to ensure that you are not flying without coverage. Remember that you are not buying the coverage for you but for the ones you leave behind.