As a pilot there are a great many things that could prevent you undertaking your normal flight duties given the need for you to be in excellent health. Far more so than would stop your typical office worker doing their job.
Given this, many pilots feel it’s particularly important to take out comprehensive Income Protection Insurance to protect their earnings should they be unable to work due to any illness or injury.
We work with a lot of pilots from a whole range of airlines and many have come to the conclusion that Income Protection could be a more comprehensive option than the Loss of Licence Insurance they tend to be more familiar with.
According to consumer group Which?, Income Protection is the one policy every working adult should consider.
Pilots Income Protection is designed to protect against accidents, sicknesses, illnesses and injuries that medically prevent you from working as a pilot. This could be anything from the extremely serious, such as cardiac issues, to more minor problems such as back pain.
As mentioned, not every medical condition would necessarily disqualify you from flying and require you to forfeit your licence.
Back pain, for example, would not typically be serious enough to warrant your licence being suspended or revoked and so would not likely result in a successful Loss of Licence claim.
However, as long as it medically prevents you from doing your job, you’ll be able to make a claim on an Income Protection policy regardless of the status of your licence.
Given this, Income Protection is typically seen as more comprehensive than Loss of Licence protection.
As with all insurance, there are some general exclusions that Income Protection simply doesn’t cover. These typically include:
Aside from the above, there are no standard exclusions with Income Protection. Your coverage will be based entirely on your pre-existing medical history.
This means if you’ve suffered from a medical condition in the past 5 years it’s likely this condition will be need to be reviewed by the insurer and could potentially be excluded.
You may be able to get coverage for the condition after a set period on the policy where you don’t receive any advice, medication or treatment for that condition, although this is entirely at the insurer’s discretion as to whether they’ll review your policy.
Where we specialise in Income Protection we have direct access to the underwriters at the top UK insurers. This puts us in a great position to negotiate the most favourable terms for your specific circumstances including when there are complications with existing medical conditions.
Loss of Licence Cover
Pays out a single cash lump sum or a monthly income for a set period until a ‘pot’ of funds is exhausted. This may not stretch over the long term if you were off work indefinitely.
Pays out a regular tax-free monthly income. Long-term Income Protection will pay out every month until your policy cease age, typically set to your retirement date.
Pays out in the event your licence is suspended or revoked due to illness or injury.
Pays out for anything that medically prevents you working.
Your licence must be suspended or revoked to claim; your licence may not be for a more minor illness / injury.
No requirement for your licence to be suspended / revoked to claim – you just have to be medically unable to work.
Many Loss of Licence policies cease at the age of 55.
Income Protection can last right up until your airline’s retirement age.
As a pilot, it’s essential you’re fit and well to undertake your usual job role. It’s likely you’ll have regular physicals to sign off your fitness to fly and will probably therefore be aware of all the illnesses or injuries that could prevent you from working.
If you lost your regular income due to illness or injury, could your finances hold up under such strain?
For many people, the answer is simply no, they wouldn’t be able to survive if they had to rely on savings and state benefits alone. That’s where Income Protection can step in.
There are four main policy options to consider when looking for Pilot Sick Pay Insurance, all of which will have a notable impact on the price of cover. These are:
There are three options to choose from when it comes to type of premiums for Executive Income Protection:
Index-linking your Income Protection is a way to ensure that a fixed benefit isn’t eroded over time by inflation.
Think of the cost of a pint of milk today compared to 10 or 20 years ago – it’s gone up considerably! Inflation acts on the cost of all goods and services over time, making them more expensive and therefore harder to afford if your Income Protection benefit remains static.
Indexing your benefit means that it will move in lockstep with inflation to ensure that it will never be eroded in real terms.
Getting the right definition of incapacity is important because it’s how the insurer will determine if you’re fit for work and therefore able to make a claim.
There are three main definitions of incapacity to consider with Income Protection:
Own occupation cover means that you will be entitled to your benefits as long as your injury or illness prevents you from working in your specific job role as a pilot.
Policies that use a suited occupation definition of incapacity mean that in order to claim benefits, you have to be unable to undertake your current job role or any other job where you may have experience or education to perform.
This could mean a pilot who is deemed unfit to work as a pilot may not be able to claim because they would be suited to doing another occupation, such as teaching in a flight simulator for example.
This is a definition of incapacity that means you can only claim if you’re so totally unfit to work that you can’t work in any occupation / perform a set number of tasks required at most basic jobs.
It’s the most difficult to claim on and in general we’d recommend it’s best avoided.
It is important to note very few insurers offer Pilots Income Protection with an own occupation incapacity definition.
Most of those who do offer this definition of incapacity require you to set up cover through a specialist such as ourselves.
If you need any help please don’t hesitate to pop us a call on 02084327333 or email email@example.com.
Independent Protection Expert at Drewberry
If you feel that you’re going to be out of work for longer than your deferred period, the first thing to do is make sure the insurer knows this.
While you won’t be able to claim your benefit until the end of your deferred period, starting the claims process as soon as you take leave from work allows your insurer can keep track of how long it has been since you stopped working and when to start paying a claim.
On claiming, you will need to provide your insurer with a completed claims form and evidence of the health condition preventing you from working, which is usually given in the form of a note from your GP.
Other evidence required might be in the form of notes from specialists / consultants or copies of diagnostic tests / scans. These should all be held within your medical records, which the insurer may write to your GP for permission to see.
Once you’ve been out of work for longer than your deferred period, you’ll begin to receive a tax-free monthly income from the policy until either:
Neil is a client of Drewberry and took out an Accident and Sickness Insurance policy with British Friendly. He was a member for 4 years before he needed to claim.
He became unwell and had pains in his stomach. After consulting his GP and having some further tests Neil was diagnosed with stage 2 Bowel Cancer and needed to make a claim.
The cost of Sickness Insurance for pilots depends on a variety of factors, most of which are policy factors discussed above.
However, there are also some personal factors that also impact the cost of Income Protection, such as:
As you can see there are many influences on the price of Income Protection, but we’ve put together a table with an average figure for three pilots of various different ages.
To come up with these figures, we’ve assumed:
There are only four insurers in the marketplace who offer pilots Income Protection with an own occupation incapacity definition. This is the best definition of incapacity on the marketplace and the one we feel it’s particularly important pilots choose.
British Friendly will cover pilots up to the age of 65 on an own occupation basis with age-banded premiums.
Holloway Friendly will only cover pilots up to the age of 55 with a minimum 26 week deferral period.
Liverpool Victoria will cover pilots on an own occupation basis up to the age of 65. However, it offers pilots guaranteed premiums and, as pilots are considered ‘category 4’ occupation, this makes LV’s premiums typically the most expensive on the market by some margin.
Like Holloway Friendly, Shepherds Friendly will only cover pilots with a minimum 26 week deferral period and up to the age of 55.
Pilots may find it especially tricky to get Income Protection, especially on an own occupation basis. To ensure that you’re getting the right cover for your needs, please don’t hesitate to get in touch.
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
Taking out Own Occupation Income Protection as a pilot can be a bit of a minefield.
We are here to help, please do not hesitate to pop us a call on 02084327333 or email firstname.lastname@example.org.
Director at Drewberry
Sam was very helpful and kept me informed at all times. Brilliant service.