I was working on quotes for pilot life insurance for a client of mine a few days ago when he called and said a pilot co-worker and friend told him that AOPA, Aircraft Owners and Pilots Association, had given him quotes that were lower than what I had quoted. My client and his friend both fly helicopters ferrying passengers and freight to offshore rigs in the Gulf of Mexico. Most of it is scheduled and they avoid messy weather, but they do occasionally have to make emergency runs.
Pilot Life Insurance – Is AOPA Saving You Money?
So, I went to the AOPA website to see what the scoop was. I discovered that part of the problem was there was not an apples to apples comparison going on. My client and his friend both wanted $750k of term pilot life insurance, which is what I had quoted.
AOPA offers a group level 10 or 20 year term product but with a maximum of $499k. AOPA has another product that offers $500k but in the product description mentions that you can get up to $1 million at group rates. If not read carefully, and in my case confirmed with a phone call to AOPA, you might miss that the $1 million is $500k for you and $500k for your spouse.
If you, like me, misread this part of the program, there is nothing to stop you from running quotes for $750k since they just give you a factor for your age to compute your monthly payments. That isn’t done on their website but on your own calculator, so you can run a quote for more than the program allows, which creates a false quote.
Compare Apples to Apples to See if You Are Saving
My client is 52 and I ran pilot life insurance quotes using the factors for the level term products for the maximum of $499k. At his age, $499k of 10 year term would be $120 a month, and a 20 year term would be $190 a month. I ran an apples to apples comparison and with my best company and I could get the same policies for $99.88 and $174.52 a month respectively. That’s several hundred dollars a year in savings, with a policy savings of over $2400 and $3700 over the entire term.
I will be the first to admit that the AOPA prices aren’t horrible given my client’s aviation practices, but they certainly aren’t as good as it gets. That’s a small victory for helicopter pilots flying offshore, but the real crime that AOPA is hiding in these group rates is what they offer for plain old private pilots.
AOPA doesn’t make any underwriting distinction between different aviation activities. AOPA would be at the same prices I quoted above ($120 and $190 a month) for an IFR pilot flying 50 hours a year or a a CFI or CFII instructor. My best company would be at $52 for $499k/10 years and $75.24 for $499k/20 years. This means that AOPA is ripping off the majority of private pilots when it comes to pilot life insurance.
The Bottom Line
I’ve been serving the life insurance needs of every genre of pilot out there, from private to airline, for the last 18 years and have never lost a case to AOPA. I’ve ranted for the last 18 years about several large advocacy groups who aren’t doing their members any favors with their life insurance offerings and AOPA is to pilots what AARP is to older folks. They aren’t your friend and they certainly aren’t earning your life insurance business.
If you have questions or have life insurance through AOPA and would like to know how much better you can do, call or email me directly. My name is Ed Hinerman. Let’s talk.