Life insurance for Pilots - What's so different
By Franz Smit
Lets have a look at what affects the insurance cover and premium of a pilot versus the normal man on the street.
The short answer: Size of the market, variables in flying and information gathering, as well as the relative ease of losing your licence, all play a role.
There are quite a few more reasons, but let's have a look at the most prominent differences and discuss them.
• Size of the market:
Because aviation is very unique, specialised, and the privilege of being a pilot is enjoyed by so few, the numbers (Insured lives) are few and far between. The occupation risk of such a small group of people is shared among many insurance companies (like Liberty, Hollard, Discovery, Bright Rock, Momentum etc).
This makes it difficult for one insurance company to look at offering reduced or special rates for pilots as their size of the pie, so to speak, is simply not big enough to justify it.
• Variables - What, when,where, how often - The devil's in the detail:
Where you fly, the type of aircraft you fly, as well as your mission all play a major role in what the decision on risk factors would be on your life insurance. Life cover for pilots very much depends on these details, because the insurance houses need to correctly evaluate the risk they're taking on. That old saying about the devil being in the detail is very true in this case. It's important to not only have the right premium and product that works for you, but to make sure that there are no potential problems that could crop up the day you need to claim.
If the incorrect information is given to the insurance company when you apply for insurance, the insurance might be offered, only for a pay-out to be declined at claim stage due to the incorrect information provided to the insurance house either by yourself or the agent/broker. There are hundreds of examples of non-disclosure and claims being repudiated; please speak to us about ensuring that that never happens to you.
• Increased risk - Loss of Licence:
Being a pilot is one of very few occupations where your ability to perform your occupation is based on passing a strict medical. We all know this, it's not news, but it is very unique.
This drastically increases your odds of claiming under a loss of licence insurance policy and thus the chances of a pilot becoming occupationally disabled is higher than that of the "normal man".
• Understanding of aviation and insurance
There are very few people who truly understand both industries. Aviation has its very own set of rules and many variables, just as insurance. Ensuring you have the best cover that will pay out is absolutely possible if done correctly. There's no going back and trying again. Do it right and if you are in anyway unsure you need to be proactive and contact a specialist. As Eon De Vos says: "You are the pilot in command, it is your responsibility"
• Different types of ways your insurance and premium can be affected:
Depending on your type of flying your insurance can either be declined, loaded, or exclusions can be imposed.
Declined - No insurance company is willing to take on the risk associated with your flying.
Loaded - The insurance company is willing to take on your risk, but the premium is increased.
Exclusions - The insurance company is willing to take on your risk excluding the aviation risk; if an incident arises directly relating to aviation you will have no claim.
This is my attempt at briefly explaining why insurance for a pilot is much more sophisticated and involved, and why your premiums could be loaded and possibly struggle to get fully comprehensive insurance for a pilot.
At PilotInsure we attempt to remove all loadings and exclusion, sometimes it's just not possible as a heightened risk may exist, although that is only in extreme circumstances.
Happy landings!
Franz Smit
CEO: PilotInsure
Insurance specialist for aviators
Mobile: +27 (84) 9798632
Email: franz@pilotinsure.co.za
Web: www.pilotinsure.co.za
The short answer: Size of the market, variables in flying and information gathering, as well as the relative ease of losing your licence, all play a role.
There are quite a few more reasons, but let's have a look at the most prominent differences and discuss them.
• Size of the market:
Because aviation is very unique, specialised, and the privilege of being a pilot is enjoyed by so few, the numbers (Insured lives) are few and far between. The occupation risk of such a small group of people is shared among many insurance companies (like Liberty, Hollard, Discovery, Bright Rock, Momentum etc).
This makes it difficult for one insurance company to look at offering reduced or special rates for pilots as their size of the pie, so to speak, is simply not big enough to justify it.
• Variables - What, when,where, how often - The devil's in the detail:
Where you fly, the type of aircraft you fly, as well as your mission all play a major role in what the decision on risk factors would be on your life insurance. Life cover for pilots very much depends on these details, because the insurance houses need to correctly evaluate the risk they're taking on. That old saying about the devil being in the detail is very true in this case. It's important to not only have the right premium and product that works for you, but to make sure that there are no potential problems that could crop up the day you need to claim.
If the incorrect information is given to the insurance company when you apply for insurance, the insurance might be offered, only for a pay-out to be declined at claim stage due to the incorrect information provided to the insurance house either by yourself or the agent/broker. There are hundreds of examples of non-disclosure and claims being repudiated; please speak to us about ensuring that that never happens to you.
• Increased risk - Loss of Licence:
Being a pilot is one of very few occupations where your ability to perform your occupation is based on passing a strict medical. We all know this, it's not news, but it is very unique.
This drastically increases your odds of claiming under a loss of licence insurance policy and thus the chances of a pilot becoming occupationally disabled is higher than that of the "normal man".
• Understanding of aviation and insurance
There are very few people who truly understand both industries. Aviation has its very own set of rules and many variables, just as insurance. Ensuring you have the best cover that will pay out is absolutely possible if done correctly. There's no going back and trying again. Do it right and if you are in anyway unsure you need to be proactive and contact a specialist. As Eon De Vos says: "You are the pilot in command, it is your responsibility"
• Different types of ways your insurance and premium can be affected:
Depending on your type of flying your insurance can either be declined, loaded, or exclusions can be imposed.
Declined - No insurance company is willing to take on the risk associated with your flying.
Loaded - The insurance company is willing to take on your risk, but the premium is increased.
Exclusions - The insurance company is willing to take on your risk excluding the aviation risk; if an incident arises directly relating to aviation you will have no claim.
This is my attempt at briefly explaining why insurance for a pilot is much more sophisticated and involved, and why your premiums could be loaded and possibly struggle to get fully comprehensive insurance for a pilot.
At PilotInsure we attempt to remove all loadings and exclusion, sometimes it's just not possible as a heightened risk may exist, although that is only in extreme circumstances.
Happy landings!
Franz Smit
CEO: PilotInsure
Insurance specialist for aviators
Mobile: +27 (84) 9798632
Email: franz@pilotinsure.co.za
Web: www.pilotinsure.co.za
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