Pilots Don’t Have To Accept AOPA Life Insurance Rate Increase

The AOPA Rate Hike Letter

In the AOPA letter to group life insurance participants dated July 29, 2020 they note that “The AOPA Life Program in which you currently participate in is a premier plan in the marketplace for those involved in aviation-related activities. There are no aviation exclusions – your aviation activities are covered under this program.”

After describing the 30% across the board rate increase they end the letter with this. “We recognize this increase will result in a meaningful additional cost to your active coverage, however, this is still one of the best products for pilots since it does not have the aviation exclusion. You may choose to reduce your coverage amount in order to counterbalance this premium increase.

We value your loyalty and we believe that the modifications described above, along with the efforts of AOPA Air Safety Institute to improve safety are both part of the long term solution to keeping rates down, help stabilize this program, and allow this valuable insurance to continue to meet the needs of AOPA members for years to come. We are keeping our member’s best interest in mind by providing beneficial insurance coverage. We are all in this together.”

I used bold letters on some of their comments that are particularly important to consider.

Are Aviation Exclusions A Concern Looking For Life Insurance?

When you have a life insurance policy with an aviation exclusion you are covered for all causes of death except while pilot in command of an aircraft. AOPA uses “no aviation exclusions” as a selling point for their group policies, kind of insinuating (at least it seems to me) that if you get your life insurance somewhere else they will exclude aviation from your coverage. Nothing could be further from the truth. Like any life insurance challenge there are plenty of companies that are risk averse (would exclude aviation) and, on the flip side, for almost any underwriting challenge, like aviation, there are plenty of companies that will gladly approve policies without aviation exclusions. From student pilots to airline pilots there are companies that I represent that will provide the life insurance you need without excluding aviation. And when your policy goes in force they can’t raise the rates or change the policy…..ever during the life of your policy.

Should You Consider Offsetting Additional Cost By Reducing Your Coverage?

Sure, but only after you have researched all other avenues to keep the amount of life insurance you have now. Let’s consider some less meaningful examples. If DISH suddenly raised your rates 30%, but offered to keep the price the same by cutting some of your favorite channels, how would that fly? If your Homeowner’s insurance carrier raised your rates 30%, but offered to keep the price the same by not covering loss due to fire, would you just say OK? If your auto insurance carrier raised your rates by 30%, but offered to keep the same price by removing the uninsured motorist coverage, would you be shopping?

If you got $250,000 or $500,000 of group term life insurance from AOPA, did you do that assuming that less would be fine or that a higher cost per thousand would be OK? Did you even know that they could just raise your rates starting September 1, 2020 or whatever date they chose?

Bottom Line – What Should You Do?

Shop it, right? What would you do in the examples above? Would you just roll over and take it or find out who really wants your business at a fair price? I’ve been working with pilots for 20 years and have at least 8 companies that would fall into the “pilot friendly” category. I’ve been able to find better rates and offer higher amounts of coverage than AOPA for most of the last 20 years.

If AOPA really had your best interests in mind they would be providing you a list of agents and agencies that they know provide the service, products and prices you need and can count on. If you have questions or would like to look at what we can do for you, again all the way from students to airline pilots, call, text or email me directly. My name Ed Hinerman. Let’s talk.