I know I’ve talked quite a bit lately about those aviation life insurance needs that are hard or expensive to insure through traditional life insurance companies. I just wanted to take a few minutes to clarify that for the majority of private pilots life insurance is not complicated and easily covered through traditional policies at very affordable rates.
Because of the success we’ve had with placing harder cases using a combination of traditional life insurance with an aviation exclusion in conjunction with AD&D, I wanted to make sure I haven’t left the impression that all pilots need AD&D. Now, if you’re landing your plane on the backs of grizzly bears feeding on salmon or if you’re pulling banners behind your airplane there’s a good chance the combination with supplemental AD&D could work better for you.
For our average private pilots from students to vfr, IFR, CFI, CFII and many of the commercial pilots who aren’t engaged in things like tour flights around the glacier fields of Alaska, preferred and preferred plus rates are available.
Let’s do a quick review of what the best rates are. For this we’ll assume a 50 year old male in Colorado in normal Colorado health, preferred plus. He needs $500,000 of 20 year term. If he’s a student pilot there is only one company that offers policies without a flat extra charge. Right off we have a problem because that one company writes minimum face amount term policies of $750,000. So, if he bumps it up to $750,000 the cost would be $3047.50. This is one of those cases where a combination of polciies might work. A $500,000 20 year term with an aviation exclusion would be a little over $900 a year and a $500,000 AD&D policy would run $600-$700 a year. The combination in this case is about half the price of full coverage in a traditional life insurance policy.
For $500,000 of 20 year term a VFR pilot whose logging 4 hours a month the cost would be $1180 annually while an ifr pilot flying the same hours could get the coverage for $1050.00. Instructors, as long as they aren’t teaching people to fly upside down should be able to get that same $1050.00. Keep in mind that a full aviation questionnaire is required and meeting the above criteria goes back to the drawing board if you say, instruct for a living but also fly search and rescue when called.
There are also great rates for those who aren’t flying 50 hours annually, but more than 25 and some exceptional rates when a pilot needs over $1,000,000 in coverage.
Bottom line. Most pilots out there don’t really have a need for accidental death insurance. Adding it on as a feel good measure may be worth looking at, but full coverage life insurance may be available for the same amount or less.