Last Updated: August 5th, 2023
Buying a life insurance policy can be a little confusing, and it’s even harder if your hobbies or career are considered “high risk” by the insurer. High-risk candidates often face higher rates and policy limitations that people with other jobs and habits do not.
If you’re a pilot, understanding how your aviation affects your life insurance policy is an important step toward finding the best deal on life insurance.
Life insurance companies look at many different factors when deciding if they are going to accept your application. These factors will directly impact how much you will pay each month in premiums.
If you’re a pilot, you might be worried about being declined or having to pay a fortune every month for your insurance. This article is going to look at the ways you can get the best policy for you and your family.
Limitations on Aviation Life Insurance
Life insurance companies will usually deal with high-risk customers in one of three ways: They will either deny coverage altogether, charge higher premiums, or they will exclude certain losses related to specific high-risk activities.
When an insurance company accepts you as a pilot you have two choices: exclude coverage for any aircraft-related deaths – in which case you won’t pay any additional fees for being a pilot, or include aircraft-related deaths and charge an additional fee called a “Flat Extra” on your policy.
Here are a few options when it comes to purchasing insurance:
Individual Life Insurance
This option provides the most flexibility and control. You can choose to buy a policy with an aviation exclusion, or without an exclusion.
Many times I recommend that people buy 2 policies – one with exclusion and one without an exclusion. This will allow you to have some coverage in place in case you do pass while piloting a plane, and will also reduce your overall cost by having another policy that has an exclusion for aviation and does not charge you a flat extra.
Note that not all pilots will have a flat extra, for example, commercial airline pilots usually do not pay any additional fees for coverage while flying a plane.
Group Life Insurance
Group life insurance does not provide as much control as individual policies. If you leave your employer you usually can’t take the policy with you, and the amount of coverage you can buy is usually limited.
Nonetheless, considering what options you have at work, in addition to buying an individual policy can make sense.
Purchase a group plan made specifically for pilots. If you’re a member of a piloting organization such as the Aircraft Owners and Pilots Association (AOPA), you may qualify for a group policy.
These policies are valuable as they’re inclusive toward pilots. The downside of these policies is that you usually can not lock in a long term rate, as rates increase with age. With an individual term life policy, you can lock in a rate of up to 30 years.
If you choose to buy insurance that will not cover aircraft-related losses, you can save money on your premiums. It’s up to you whether it’s worth the risk to take a policy with an aircraft exclusion.
What Factors Are Taken Into Account When Pricing?
Insurance rates are calculated based on numerous factors including:
- Policy term
- Overall health
- Medical history
- Habits and career choice
Because so many factors influence the cost of life insurance policies, it’s possible for rates to vary substantially between one individual and another. It’s also possible for one pilot to pay more than another pilot based on the following factors:
- How many flight hours you have under your belt
- How much time you spend flying
- The type of flying you do
- The type of airplane you fly
Every insurance company rates these factors differently and our expertise is helping you get the best rates specifically based on your specific situation as a pilot.
Getting Lower Insurance Premiums
As a pilot, your life insurance policy is going to cost more than it would for other applicants. But, that doesn’t mean you have to pay massive premiums. Below are some practical ways for you to lower your life insurance premium costs.
One of the best ways to save money on your life insurance is to cut out the use of any cigarettes or chewing tobacco. If you’re a smoker, you can expect to pay much higher premiums.
In fact, policy premiums for smokers tend to cost more than twice as much compared to what non-smokers pay for similar coverage. So, if you want to save money, you need to kick those bad habits.
It will not only help you live a healthier life, but it will also save you thousands on your life insurance rates every year. So, before you apply for life insurance, quit smoking or use chewing tobacco for at least one year.
Another way you can save money on life insurance premiums is to improve your overall health. We mentioned the health exam, and if you want to save money, then improving your health through diet and exercise will save you 50% or more on your insurance rates.
The best way to ensure you’re getting the lowest rates is to compare dozens and dozens of quotes before you decide which one is best for you. Every insurance company is going to offer different premiums depending on how they view the risk of each pilot.
Some companies are going to give you lower rates, while other companies will automatically decline you, simply because you are a pilot.
To maximize your savings, it’s important to find the company that can save you money and provide exactly the coverage you and your family are looking for.
There are thousands of companies on the market, and all of them have different medical underwriting. Doing the research to find the right company can be extremely time-consuming.
So, instead of wasting your valuable time wading through information and placing dozens of phone calls, let one of our agents do the legwork for you.
We work with the most highly rated companies across the nation and can provide you with the best rates available, all while saving you time and most importantly, money!
Guaranteed Acceptance Life Insurance
One alternative option is to buy a guaranteed acceptance life insurance policy. These policies don’t decline anyone based on occupation, hobbies, health status, or pre-existing conditions.
You will not have to answer detailed health-related questions and will need no medical exam. You only have to answer a few very basic questions and then you’ll be approved for insurance coverage.
But, while this type of policy might sound attractive at first, there are a couple of drawbacks you should be aware of when you’re shopping for insurance as a pilot.
One of the most notable drawbacks to pilot insurance is the coverage limit on how much you can buy with a guaranteed issue plan. Most companies will only sell you around $25,000 worth of coverage.
This is typically not enough coverage for the average household, and not having enough coverage can be a terrible mistake.
Another problem with guaranteed issue policies is the expensive premiums. These policies are going to be drastically more expensive than a traditional plan.
If you want to get the cheapest life insurance, you need to apply for a traditional insurance plan.
Fill out our form on this page to request a customized quote, or call us at 800-712-8519.