Posts filed under 'private pilots'
Pru rolled out a 16 page release on their new and improved underwriting guidelines in a number of areas. This comes on the heels of a much ballyhooed rate decrease that didn’t do squat for anyone under 50. Nevertheless there may be some morsels in here that will help someone get better rates.
First is aviation. I shared a few weeks ago that they were going to write home built aircraft owners without a flat extra as long as the private pilot has at least 50 hours in the home built. I still like that one even though it touches a pretty small group. They now say they will go best rate class on business jet pilots. Not that big a deal since several companies will do the same thing and remember these are private company pilots, not rent a jet pilots. They now say best rate class if a pilot is at least 30, has 1000 or more total hours and at least 100 hour in their current aircraft. Again, the same deal is available from other companies at a lower rate and without the strict stipulations.
They really are making a big deal out of the fact that they will go standard plus on stage 1 or 2 Papillary or Papillary-Follicular thyroid cancer upon completion of treatment. I haven’t had a chance to shop that, but my guess is that several companies would go standard and possibly standard plus with the same criteria. And with Pru’s rate “decrease” their standard plus would probably be left sucking wind.
They did gain some significant ground on family history. They have been the historical family history ogres for a long time with their best rate class requiring no parent or sibling deaths prior to age 70 due to cardiovascular, stroke, diabetes or cancer. Their second best rate, preferred, had the same guidelines but age 65 and standard plus finally got to age 60 where virtually every other company would have been preferred plus. Now they are at age 60 for preferred plus and they have dropped diabetes. Preferred they will actually allow one death prior to age 60 and standard plus is at the underwriter’s discretion. They have also changed their family history of cancer away from every kind of cancer to only those that have a high familial risk.
I also like their new written stance on elevated liver functions. They will go preferred plus if one of the three liver functions is no more than 4 times normal, and if 2 or even all 3 functions are no more than 2 times normal. This is assuming all other labs are normal, there aren’t any issues with alcohol abuse and they don’t have a history of liver disease.
They put on a brave face saying that a 67 year old female with type 2 diabetes since age 63, 5’4 and 186# with an A1c of 6.9 could get standard plus. Not a bad offer although with that late onset and good control I’m thinking Banner would also go standard plus and beat Pru decisively.
They did make a bold move on financial underwriting. Now up to age 40 qualifies for 35x annual income, 41-50 is 25x, 51-60 is 20x, and 61-70 is 10x. That definitely means if you can afford it you can get more coverage through Prudential.
They are still one of the best bets around for other than cigarette tobacco users. They will go standard plus non smoker even with positive nicotine in the labs for pipes, cigars, chew, nicotine patch or nicorette gum users and again, anything except cigarettes.
Bottom line. I’ll take every break I can find my customers and some of the things that Pru has thrown out in this release are tasty morsels.
July 9th, 2010
Prudential Life recently took two steps forward and one step back in their underwriting treatment of private pilots.
First they took a bold step forward in their underwriting of owners of experimental and home built aircraft. The pre-change underwriting was very clear cut. If you fly anything that isn’t a certified factory built plane, you get to pay anywhere from $2.50 to $5.00 per thousand per year extra for full coverage. That quickly adds up to real money when you’re considering $millions in coverage.
They have now taken a stand alone position in the industry and will charge the same rate they would for a Cessna 172 owner, for experimental and home built owners as long as the aircraft has more than 50 hours of (obviously incident free) use. While some companies have embraced some experimentals, this is a giant leap for all of those pilots who have found just the right ride outside the overpriced stock brand aircraft.
The other change they made in the right direction was to extend the acceptable annual hours from 200 to 300. With a lot of companies capping annual hours at 150, this move sets them apart especially for the high end commuters.
The for the step in the wrong direction (one step back). Pru has long been the best bet for student pilots, being underwritten at standard plus rates with no flat extra. They will now incur a $2.50 per thousand flat extra. I’m watching to see what company will step in the fill that void.
Bottom line. The news from Pru could have been better but the ground gained is going to make a big difference for private pilots.
June 29th, 2010
Aircraft Owners and Pilots Association (AOPA) has held themselves out as the private pilot’s friend for a long time, the advocate, the go to organization, the one stop shop for all of your needs.
For all I know they may in fact be the shining star they claim to be, except when it comes to life insurance where they stand out as being very limited in scope for the average pilot and amazingly like AARP, my least favorite advocacy group, in their other offerings.
From the life insurance information page of their website they throw out these offerings:
AOPA Group Term Life Insurance
Most likely you have some life insurance coverage. But is it enough to adequately provide for your loved ones if you’re no longer there to support them? Right now, AOPA members and their spouses under age 65 can apply for $5000 up to $1 million in affordable coverage with no aviation exclusions. Go ahead and get your quotes, but I’m not getting a warm, fuzzy feeling about a group product with face amounts available from $5000 to $1mm. Being group with super small face amounts it almost certainly has to be a simplified issue product and the way companies make it simple to issue is by overcharging or not guaranteeing. And what’s with only offering it up to age 65?
AOPA Level Term Life Insurance
AOPA members and their spouses can lock in affordable rates and benefits from $200,000 up to $1 million for 10 or 20 years. Every year you can trust that your rate won’t increase, making it easy to plan and budget from year to year. This is their Minnesota Life offering which, by the way, can be purchased through any independent agent. And when you go through an independent agent Minnesota Life opens up the offerings to include all the term lengths, 10, 15, 20 or 30 years, and face amounts from $100,000 to $10,000,000.
AOPA Senior Term Life Insurance
Often times obtaining quality, affordable coverage after age 50 is difficult. That’s not the case with AOPA Senior Term Life Insurance. It’s specifically designed for members over age 50. AOPA Members age 50 to under 75 and their spouses age 45-75 can obtain $10,000 to $50,000 in economical life insurance without submitting to a medical exam. This is the product that stinks like they robbed right off an AARP truck. Guaranteed issue whole life. Viciously overpriced permanent coverage that, because of the high cost, will rarely be still in force at the time of your death unless you can manage to die early on as a “senior”, say at age 50. Guaranteed a bad deal even if you’re just looking for a final expense policy.
Bottom line. AOPA is pathetically far down on the list of places that a private pilot should go looking for their best options on life insurance. There are plenty of independent agents out there that can get better deals in almost every circumstance.
February 24th, 2010
There is a tendency for people to just hold on to life insurance once it is in force, even when opportunities to improve on the rate or the term length come up. Most often this happens when their isn’t a servicing agent around to find the better deals and encourage the change.
This week I’ve provided three posts that really shout “out with the old and in the with the new”. These are opportunities that weren’t there two or three years ago so if a person in any of these situations took out a policy more than two years ago, they can likely reapply at this point and either pay less for what they have, get more for the same price, or extend the term length without paying more.
The first opportunity was for private pilots with a VFR rating. Until this past week the best they could find would have been preferred rates or, as I mentioned, ING’s preferred plus and a $.48 flat extra, which in most cases comes out slightly higher than preferred rates. Now a major term insurance player will write up to $10 million of term insurance or universal life at their best rate class if the pilot has 100+ solo hours and flies right side up from 26-150 hours a year. It’s huge.
The second opportunity came in family history underwriting where another major insurance company, in the absence of any other risk factors, will overlook a parent’s cardiovascular related death if the parent at ages 58 or 59. This opportunity may seem rather narrow but I can assure you that it could impact the rates of tens of thousands in a positive way since almost anyone whose parent died of a heart attack or stroke at those ages is currently paying standard plus rates, the third best rate class. For them a jump to the best rate class would be outstanding savings.
The third opportunity is the addition of another major player, ING Reliastar, in aggressive underwriting of sleep apnea. For a lot of years the best case with sleep apnea was a standard rate class. Now with both ING and Prudential allowing best rate underwriting for mild to moderate sleep apnea, another door is open.
Bottom line. A very small percentage of life insurance applicants get the best deal possible right from the get/go. This fact makes it imperative that your agent review annually your situation always with an eye toward improvement of the price, term length or product. Insist on it.
February 5th, 2010
As noted last week a major A+ rated life insurance company has broken into uncharted waters by offering preferred plus (best rate class) rates for private pilots that are not instrument rated.
And that’s just the tip of the good news iceberg. It gets even better when you find out that the company is a heavy hitter in the term insurance wars, showing up in the top 10 rates at preferred plus at most ages and term lengths.
To put this in perspective, for a male age 50 who is a private pilot with a VFR rating, with 100+ total solo hours and flying 26-150 annual hours, before the best they could do on a $2,000,000, 20 year term policy would have been through North American at their preferred rate for just under $4600 a year. With this new underwriting available, given all the same criteria a person could end up spending nearly $1000 less per year.
As I said last week, there is obviously an assumption that aviation aside, all other factors would have to qualify for preferred plus as well. That usually isn’t a huge issue for pilots since, unlike the average population, they get regular physicals and health issues seldom get out of control.
So, where does this fit into your life insurance planning? It’s huge so I don’t throw this out fliply. If you are a VFR pilot in good health and meet the criteria above and you currently have life insurance in force, you need a comparative quote. If you can potentially lower your life insurance bill by 25%, it’s not a review you want to pass up. If you don’t have life insurance in force and have been avoiding it because you can’t stand the rates you’ve been quoted, it’s time to act.
Bottom line. It’s rare when a road block to the best rates is removed. We’ve seen it with a few companies that will allow their best rate with treated blood pressure. We’ve even seen it in the past year, albeit with a very limited window, for people with type 2 diabetes. But, absent a flat extra charge, this is a first for the average private pilot.
February 1st, 2010
So many life insurance companies have come so close, but none have ever stepped off the edge and done it. Preferred plus rates with no extra charge for private pilots who don’t have an instrument rating.
ING Reliastar came out with their preferred plus and a $.48 flat extra per thousand and got everyone’s attention for a while until it kind of blended in with the fact that several other companies were offering preferred rates. When you did the math the premiums were often lower at preferred than ING’s lure with preferred plus. But now……
An A+ rated carrier announced yesterday that they will now underwrite VFR pilots with 100+ solo hours and 26-150 hours annually at what are arguably the most competitive preferred plus rates on the table today. The underwriting applies to term insurance and universal life and can go up to $10,000,000.
Just to put that in perspective I have a client who has $4,000,000 of term insurance in force. He fits all of the criteria above and currently has his policy with North American at preferred paying about $4800 annually. We just discussed this and ran rates with this just announced underwriting and it would reduce his premium to $3700 annually.
This really can’t be overstated. VFR pilots simply haven’t been offered these kind of rates before. Obviously you would have to qualify for preferred plus rates in all other aspects, but generally speaking health issues are not a big factor with pilots, some of the most annually examined folks there are.
Bottom line. If you are a private pilot with life insurance you shouldn’t pass up this opportunity to shop your coverage and jump on the savings. If you don’t have insurance and have always been envious of those best rates you see advertised, here’s your chance.
January 28th, 2010
Airline pilots have been given a free pass by life insurance companies for a long time. The companies have assumed that if you are good enough to fly one of those big things for a real airline company, aviation won’t be an underwriting issue.
New question on those applications should go something like, “Have you ever played cards, read a magazine or used your personal computer while flying?” When those Northwest pilots overshot their destination by 150 miles while using their laptops to “check crew schedules” (Right!!), they put a whole new face on the folks on the other side of that door at the end of the aisle.
Life insurance companies may need to rethink this whole thing. While there is one other class of pilots that qualify for the best rate class, those that are instrument rated, have substantial life time hours and fly enough annually to remain proficient, other private pilots either get bumped a rate class or may have to pay a small flat extra for full aviation coverage.
Of course those guys won’t have to worry about whether their life insurance covers aviation anymore. No license. No flying. No exposure.
Ironic though. Life insurance companies have put so much stock in whether a pilot has the training, ratings and proficiency and then we find out that those who fly the highest and fastest are doing the grown up version of “Look Ma, no hands”, only worse. It’s “Look Ma, no hands, not even looking or caring where I’m going”.
Well, in spite of it, airline pilots will likely continue to get the best deal from just about any company they want to go with. Private pilots may not get to choose their company, but all of them from students, to VFR and IFR have enough companies that they should be able to put together an insurance portfolio at a reasonable rate.
Bottom line. This highlights the fallacy of life insurance companies assuming a certain class of people are above underwriting.
November 9th, 2009
Behind every good man is a good woman the saying goes. That’s certainly true in my life. Also, behind every successful impaired risk life insurance agent is a talented, well connected General Agent.
Impaired risk is an industry term that covers the full spectrum of those clients who, because of some physical or mental impairment, have a hard time getting life insurance at affordable rates and often have a hard time getting life insurance at all. It is this end of the business where I have hung my hat and where I found the perfect partner in Rich Fuller with CPS/Special Risk Services in Denver.
Rich has, when all of my bullets have been shot, gone to bat and to battle over cases where we know that the facts and logic are on our side (things that somehow escape underwriters who are lovers of their sacred underwriting manuals). Because of his connections and because of the connections he has helped me make, we are able to able to present trial quote requests to the right people with the right information, a key to success.
He has successfully ferreted out life insurance rates for private pilots that are second to no other agency in the country. He has helped me carve out niches where very few agents want, or even have a clue how, to go. We have been able to consistently beat some of the largest agencies in the country for clients with heart disease, aortic valve replacements, type 1 diabetes and type 2 diabetes, bipolar disorder and depression.
For both of us this is all about the clients we can help. We have gone above and beyond what an average agency would given the small amount of money to be made on some cases. There are a lot of agencies that will just blow off smaller cases, a rather self centered point of view. We have also hit major home runs on huge estate cases where we were able to save clients tens of thousands in premium per year.
Bottom line. I just needed to say these things for two reasons. First, there are a lot of agents who follow this blog and I wanted them to know where they can find the best help for their clients. Second, it’s important for those looking for life insurance to know that there is a professional team out there who will make their life insurance challenge a personal mission. We want to get the job done the way it should be.
June 23rd, 2009
The cost of being a private pilot can be staggering anyway you go about it. One area that you can keep the cost down in is your life insurance, if you do your homework and pick the right agent.
Student pilots face their first gut check when they find out, on average, that it will take $6000 to $8000 to complete the training for a private pilot’s license. That’s a serious cash commitment added to the time commitment it takes to complete the training. Another gut check can come from your spouse at this time when they ask to increase the amount of life insurance you have and to make sure that aviation is covered.
Good news on that front comes for those who are already adequately insured and had the insurance in force prior to making a decision to take up flying. It’s certainly prudent to check with your life insurance agent, but if the policy was purchased prior to aviation flying into your life, then in all likelihood it will be fully covered without making any changes. One of the great features of life insurance is that you don’t have to repurchase it any time something changes in your life. Again, a review by an agent will help you know the status on aviation. In you can’t find an agent, call your life insurance company directly and explain the situation to them and they will be able to guide you. If you do find that you need to purchase new coverage or additional coverage, the good news is that it can be done affordably through a few companies. Make sure you seek out an independent agent that knows where to take your business.
Once you have earned your ticket and are now a private pilot, well, this is when many find out if they were more fascinated than serious. This is when the cost of renting or owning a plane whacks you in the wallet and determines if that license will be a wall hanging or something that you seriously integrate into your life. This is also the next time that your spouse is going to broach the life insurance question.
Let me just interject some common sense at this point. If your spouse asks you to increase the amount of your insurance you really need to consider that question carefully. If you were adequately insured before, say with $500,000, you’re still adequately insured at $500,000. Just because you’re a pilot and have added that to the portfolio of possible ways to die, doesn’t mean that your death is somehow more monetarily challenging than it was before. But, as I said, consider the question carefully. It is possible that what your wife is saying is that she was willing for you to be under insured before, but with this new perceived danger in your life it’s time to bring your coverage up to where it should be.
This can actually be a useful tool for husbands. If you want to know if your wife is truly comfortable with the amount of life insurance you have in force, ask her if she would be comfortable with your current coverage if you took up flying. The good news is that as a VFR pilot with 100+ total hours in command and at least 26 in the last year, rates are going to be very good and competitive with those than you would pay even if you didn’t fly.
As you work your way up the next step is often an instrument rating and with 250+ total hours and again, at least 26+ hours annually to maintain proficiency, you are eligible for preferred plus rates with several companies. Again, a good independent agent is helpful here. Not all companies see eye to eye on this.
Bottom line. Private aviation is not a cheap hobby or avocation, but with some forethought and planning there isn’t any reason that your life insurance should make that any more of an issue.
June 5th, 2009
While the words CEO and flying may cause a little angst among some, the truth is that CEO’s are flying privately more often and whether that is on a corporately owned aircraft, a chartered jet, or their personally owned airplane, it is generally more efficient and cost effective to the company.
Life insurance underwriting for the pilot in all three of those scenarios is all over the board, but really that’s true of almost any underwriting topic other than the common cold. But private aviation and how different companies view it is about as diverse as you can get. While one company might give a private pilot preferred plus rates, another company will have them pay a flat extra fee for aviation coverage. Corporate pilots and charter pilots get the same wide variance in offers from best rate class to companies that really don’t want to cover them at all.
With the exception of airline pilots, underwriting of pilots really comes down to five primary questions.
1. Age of the pilot
2. Pilot rating – Commercial, private (IFR/VFR), or student
3. Total hours as pilot in command
4. Hours flown annually
5. Type of aircraft
Optimally the best rate class would go to someone over 26, IFR, 250+ total hours, 26-250 hours annually flying a proven, certified plane.
The truth is that private, student and commercial pilots can get very competitive rates and in most cases have the tough part of life insurance already whipped because they fall into that rare category of people who get regular physicals, so they actually know what their health is and it’s almost always good.
Bottom line. With good health being a given, even pilots that don’t meet the optimal criteria above can still get life insurance without paying a flat extra charge.
May 28th, 2009
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