It hasn’t been that long ago that life insurance for private pilots cost just the same as for every other person with their same health. The only downside to those good old days was that life insurance companies excluded aviation life insurance coverage. It didn’t cost anymore. It just didn’t cover you after you left the ground. Thirty years ago aviation underwriting was neatly tucked away in one paragraph in a policy called “Exclusions from Coverage”.
I suspect that began to change about the time someone was named president of a life insurance company and they happened to be a private pilot. The reality of the mortality risk was now calling the shots and probably suggested that, while there might be some increased risk and exposure in private aviation, the risk was not unacceptable at a higher premium. That started a new era of providing pilots a choice between an exclusion or a higher premium. With most companies it wasn’t a pretty choice, but it was a step in the right direction.
Several more years passed before any company became bold enough, or confident enough to offer pilots life insurance without a large extra charge. Then there became two trains of thought in underwriting pilots. One small group of companies conceded that private pilots, especially those with IFR, could be approved as good as preferred rates, the second best rate class, as long as they qualified medically. Other companies jumped on board with the idea of standard rate or better underwriting but all together this wasn’t more than a dozen companies.
The other train of thought was still a way to make pilots pay and that was the beginning of charging a flat extra per thousand if they wanted aviation coverage. For instance a pilot might qualify medically at preferred and medically that policy would say, cost $1000 a year for a $1,000,000 policy. If they wanted to be covered for aviation they had to pay a flat extra of something like $2.50 per thousand dollars worth of death benefit per year extra. On a million the flat extra would be $2500 a year ($2.50×1000), so the total premium for the policy was $3500 per year. Obviously if a pilot was aware that there were options available without the flat extra it meant they could pay lower prices or carry more insurance for the same price.
Then came a short lived period where several agencies were able to talk large companies into allowing them to underwrite private aviation one rate class better than their guidelines called for. So, if an IFR pilot was preferred according to the guidelines, through one of these agencies if they qualified medically they could get preferred plus. They could legitimately advertise that they could offer rates that weren’t available anywhere else, sort of.
The key for those agencies was an IFR pilot in preferred plus health. I couldn’t beat it. No one could unless they agreed to write business through those agencies. But the niche was small with key being as much health as pilot rating. If the IFR pilot had, for instance, treated and well controlled high blood pressure the best they could get was preferred through any pilot friendly company. So health leveled the playing field, a field that was already level when it came to VFR or student pilots.
Then those agencies lost their proprietary deals with the insurance companies they used. The Pilot agencies were now looking to the companies that the rest of the agents in the country had been using for a long time. They had no advantage over any independent agent other than the fact that they had the ears and policies of a lot of pilots from their days of advertising the best rates available for pilots. Now the best rates could be found with any independent agent that knew aviation underwriting.
Now there are preferred plus and preferred rates available from several companies for most pilots. Here is a sample of the best rates available today. These rates are of course subject to health and aviation specific guidelines such as annual hours, total hours as PIC, type of plane, flying upside down, etc. These rates are for $500,000 and $1,000,000 of 20 year term.
45 yr old IFR $660.00, $1205.00
45 yr old VFR $770.00, $1800.00
45 yr old CFI $660.00, $1250.00
55 yr old IFR $1615.00, $2905.00
55 yr old VFR $1800.00, $2905.00
55 yr old CFI $1615.00, $3160.00
Bottom line. Rates and selection of companies are as good as they’ve ever been for private pilots. This is a great time to compare your current policy with what’s available or shop around if you are considering additional coverage.
If the information above has been useful or you have questions, I am a licensed agent in all 50 states and can be reached directly at 866-539-7914 or firstname.lastname@example.org.