Life Insurance for Pilots

If you are a pilot and you’ve never applied for life insurance, you may not be aware that your piloting activities can have a substantial impact on your application for coverage. If you have applied for life insurance for pilots in the past, then you know exactly what I’m talking about.

It’s not whether insurance companies will sell life insurance for pilots, but more that there is an additional series of underwriting considerations that go into the decision. And, in virtually any case where death from your activities as a pilot are included in your policy, your premiums will be higher, perhaps substantially so.

Life insurance for pilots will usually start with a basic life insurance policy, and then adds certain provisions or even exclusions that will have a material impact on your plan.

Let’s take a closer look at what those considerations will be.

Can a Pilot Get Life Insurance?

In the vast majority of cases, the answer is a resounding yes. Insurance companies will write life insurance policies for pilots, but they will require special handling.

You’ll need to provide complete details of your piloting activities, and recognize that the insurance company will adjust your premium (higher) due to the fact that being a pilot is considered a high-risk activity.

The alternative will be to purchase a life insurance policy that specifically excludes death caused by anything related to being a pilot.

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How Insurance Companies View Life Insurance for Pilots

For the most part, life insurance companies view pilots primarily as a high-risk occupation, rather than as a high-risk hobby. For that reason, even if you are a pilot for personal pleasure, the cost of obtaining life insurance will be relatively high.

Companies will generally handle life insurance for pilots in one of three ways:

1. As an occupational classification, or
2. As part of a regular life insurance policy, but with a flat, extra fee added to the premium (this option is typically available only to student pilots and private pilots), or
3. By adding an exclusion rider to a regular policy, which means if you die by any of the usual causes, your death benefit will be paid to your beneficiaries, but specifically won’t be paid if your death is the result of your piloting activities.

Virtually all life insurance applications require that you disclose your occupation. While traditional occupations like teachers, accountants, and administrative assistants will get a standard or preferred rating, certain occupations are deemed hazardous, like police, firefighters, and truck drivers. If being a pilot is in any way part of your occupation, you’ll be classified as having a high-risk occupation.

During the underwriting process, insurance companies focus on any factors that present the risk of early death. That certainly includes health conditions, certain behaviors like smoking and excessive alcohol consumption, as well as age. But, occupation and hobbies are two risk factors most people outside the insurance industry typically don’t view as life-threatening risks.

That doesn’t mean you’ll be turned down for life insurance because you’re a pilot. But there will be an additional evaluation process that will mostly affect the premium you pay.

Specific Considerations with Life Insurance for Pilots

As is the case with all high-risk activities, the insurance company will be interested in determining the degree of your involvement.

For example, some of those considerations include:

• How frequently you fly (the more you do, the higher your premium will be).
• The purpose of your piloting activities — professional or pleasure.
• The type of aircraft you fly — some are considered riskier than others.
• Your level of training, experience, and any licenses you hold.
• The distances you fly, though this may be a relatively minor factor.

Insurance underwriters will evaluate your answers to each of those questions, as well as any others specific to that particular company. They’ll use that information to determine the overall risk your piloting activities present, which will then determine your premium level.

It’s important when completing your life insurance application that you’re completely truthful, first about your pilot status, but also about the details that make up the activity in your life.

Failing to give truthful information could cause the insurance company to refuse to pay a death benefit claim if you were to die participating in a piloting activity that you have not disclosed on your life insurance application. This is especially true during the first two years of the policy, which is known as the contestability period. During that timeframe, if you die of a cause that was not disclosed at the time of application, the company can refuse to pay your death benefit to your beneficiaries. They can even cancel your policy if they become aware of the misrepresentation during that time.

The best strategy with life insurance for pilots is to accept the fact that it is a unique type of coverage, be completely truthful when completing the application, and rely on the insurance broker to get you the best policy for the money.

Why is Life Insurance for Pilots So Expensive?

As is the case with life insurance for all high-risk activities, a premium adjustment can be made to accommodate the risk of death from being a pilot. This is typically done based on a flat dollar rate per thousand dollars of coverage.

For pilots, that additional fee can be between $2 and $5 per $1,000 of coverage. Exactly what your fee will be depends on all the factors discussed earlier. If your activities fall under what is considered lower risk, you’ll pay closer to $2. But if they’re on the high end of the risk scale, you can fully expect to pay closer to $5. Under certain extreme risk factors, the additional premium may be even higher.

Let’s look at an example to see how the extra premium works:

Let’s say you take a 20-year, $500,000 term-life insurance policy, with a base premium rate of $500. Underwriting determines that you are on the lower end of the risk scale as a pilot, and adds an additional fee of $2.50 per $1,000 to your premium.

Since you have $500,000 of coverage, that will be 500 times $2.50, or $1,250. That will give you a total annual premium of $1,750.

That’s an admittedly high premium, especially for someone who is considered a lower-risk pilot. But it illustrates the point that life insurance companies consider piloting to be very high risk.

Once again, you may be able to get around the additional premium by taking a regular policy and adding a policy exclusion for death due to activities related to being a pilot. In that case, your beneficiaries will receive the full amount of your death benefit for any cause of death other than that caused by being a pilot.

Special Rules for Commercial Pilots

There is one possible exception that may enable you to get a standard or preferred life insurance premium if you are pilot. That’s if you are a commercial pilot, flying for major airlines. Since the accident rate for commercial pilots is only about 3% of that of private pilots, and because commercial flying activities are governed by the Federal Aviation Administration, an insurance company may not charge you an additional premium for being a pilot.

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How to Apply for Pilot Life Insurance

If you are a pilot and you need life insurance, you’ll need special handling. Relatively few people are pilots, and life insurance companies have an entire set of guidelines that determines the process. It undoubtedly adds a level of complication to the normal life insurance application process, and that’s why you’ll need help.

That help comes from a licensed insurance broker, which is exactly what we are. We can help you find the companies that will accept pilots, and give the most favorable consideration when it comes to premiums. This is not an endeavor you should undertake on your own, because not nearly all insurance companies welcome pilots.

Whatever you do, don’t make the mistake of applying for coverage through companies that directly advertise the lowest insurance premiums in the industry. Those premiums are designed specifically for low-risk applicants, including those who are young, in excellent health, and don’t have what are considered high-risk behaviors (like smoking), or high-risk occupations or hobbies.

In all likelihood, if you apply to those companies — under the assumption that they’ll offer the lowest premiums even for pilots — you may be unpleasantly surprised by the outcome. That’s likely to be a decline, because the lowest-cost providers don’t accept high-risk applicants. It’s unfortunate, but it’s the way the life insurance industry works.

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