A bit morbid we know, but this tool works out the risk of you passing away based on ONS Life Expectancy Data
Life Insurance for Pilots is something that we often get asked about. Being in a job which is deemed higher risk than others can make putting protection in place more tricky.
But we’ve got you covered. In this guide, we’ll explain everything you need to know about protecting you and your loved ones.
Life Insurance pays out a cash lump sum if you die during the term of the policy. The benefit is paid to your loved ones to help them cover any financial commitments you have. This could include:
You might choose to include Critical Illness Insurance for an extra premium. This will pay out if you suffer a serious condition such as a heart attack, a stroke, or cancer.
You can use Life Insurance in whatever way you see fit, allowing you to choose the best option for your family.
The main thing you will want to know is whether, as a pilot, you can get Life Insurance. The good news is you can. In the past, it wasn’t so easy. This was because many insurers used to see flying a plane as high risk and would decline cover outright.
However, times have changed, flight safety has improved and provider attitudes have changed. Because of this, in most cases pilots can take out life insurance. However, the cover you can get depends on what kind of pilot you are.
Often, insurance providers will assess your individual circumstances. This measures your specific role and any associated risks. If you’ve previously been declined cover or accepted at special terms, speak to an expert advisor.
So, we now know what Life Insurance is, and we know that pilots can put it in place, but what does it cover?
In a nutshell, a policy would pay out in the event of the following:
It’s important to be aware that whilst you can often take out Critical Illness Cover as a pilot, there could be some limitations.
Depending on the provider you choose, there may be limits to the Critical Illness Cover you can have as a pilot. This isn’t the same as an exclusion, it just means that specific definitions will apply for certain conditions.
The first limitation relates to the Total and Permanent Disability (TPD) critical condition. TPD is one of the critical conditions most insurers will provide cover for.
There are a few different definitions of what TPD means. Each definition specifies when the condition will be met in order to meet a valid claim:
Many providers will only insure pilots for total and permanent disability claims based on the work tasks definition. This will probably only affect a small proportion of people. But, it’s important to be aware before you buy life insurance with critical cover as a pilot.
The other limit that can apply is for private pilots who fly recreationally. Some providers will exclude claims for critical conditions gained through flying activities, such as:
Because these hobbies are often seen as high risk, they may be excluded from critical cover. This means that if you develop a critical condition as a result of this activity, you may not be able to claim.
For example, most insurers offer critical condition cover for the loss of a limb. However, if you lost a limb through flying related activities, you may be unable to claim.
This entirely depends on the insurance provider and their specific approach. Most providers will tend to either charge more or add exclusions for higher-risk activities.
Critical Illness protection for pilots may come with certain limitations. However, each provider classifies risk differently.
To get the best coverage possible, speak with a protection expert.
Independent Protection Expert
As mentioned before, there are no across-the-board aviation exclusions when it comes to taking out cover as a pilot. With life protection, you’re typically covered if you die anywhere in the world.
Pilots do need to be aware that the definitions of meeting certain conditions may differ from the norm. Though this often only applies if you take out Critical Illness Cover.
Apart from that, the typical life protection exclusions will apply. These include:
Of course, there are other risk factors which could affect your application. For example, your age, medical history, and smoker status.
Any pre-existing health conditions could result in an exclusion or a ‘loaded’ premium. In other words, you could pay a little extra due to an increased risk relating to your health.
The Life Insurance Cover you receive will also depend on the type of protection you choose. There are several forms of life protection you can consider as a pilot. The type of cover you decide on will often relate to your reason for taking out a policy.
If you take out Level Life Insurance, the sum assured remains at a fixed amount for the whole term of the policy. This means your payout will be the same regardless of whether you die during the first or final year of the policy. It’s often used to protect an interest-only mortgage, or other costs which will remain fixed over time.
With Decreasing Life Insurance, the sum assured falls over the term of the policy, reaching zero by the end of the term. Decreasing cover is used to pay off liabilities such as repayment mortgages. This is because the amount outstanding also falls over time.
Given your liability decreases each year, you need less protection as time goes on. This kind of cover tends to cost less at the outset compared to level cover.
Another option is to have your cover increase in line with the retail price index each year. In other words, your benefit – and the premium you pay – will go up in line with inflation.
Taking out increasing cover prevents the purchasing power of your benefit from eroding over time. You might choose this option if your policy is for a relative’s inheritance.
Depending on the amount of cover you have, your benefit may be subject to inheritance tax.
It’s always best to speak with an advisor such as one of the team at Drewberry. They will be able to talk you through the tax implications and discuss whether using a Life Insurance Trust is a suitable option for you.
Independent Protection Expert
A Family Income Benefit differs from the other types of cover. Rather than paying a single lump sum benefit upon death, it pays out a regular income to your loved ones for the rest of the policy. This can make it easier to manage the payout, which can feel overwhelming when it comes as a large lump sum.
The best life insurance for you will meet your individual and financial circumstances. This includes any monetary commitments you have, or family protection you may need.
While it’s not something anyone wants to think about, the reality is that tragedy could strike when you least expect it. Having the right protection can be incredibly valuable should the worst happen.
Life expectancy for healthy individuals is generally high in the UK. Airline pilots need to be in top shape to pass all the physicals required to retain their licence. As such, your mortality rate won’t necessarily be any higher than the average person.
Having said that, the point of most life insurance policies is to protect you in the long run. This could be over the term of a mortgage or until your expected retirement age.
We realise this is a bit morbid to think about, but it’s important to know the risks and plan for the worst-case scenario. So, we’ve put together the below table using data from the Office of National Statistics (ONS). This shows the risks of mortality for a healthy man at various ages.
Risk Of Death In 10 Years
1 in 62
1 in 29
1 in 12
Life protection tends to be one of the least expensive types of insurance on the market. This is especially true if you’re young and healthy.
Given this, it makes sense to take out life insurance as soon as possible. Waiting until you’re older or have unfortunately developed a health condition could push up premiums.
The risk of falling ill during an average lifetime is higher than the risks of passing away young. In fact, according to the Association of British Insurers (ABI), cancer, heart attacks, and strokes make up around 80% of Critical Illness claims.
Being a pilot with the appropriate pilot’s licence requires you to be in very good health. As such, airline pilots don’t often tend to have health-related risks when they take out cover. Critical illness cover is best thought of as a way to safeguard you in the long run.
If you suffer a serious illness down the line, it could result in you being unable to fly again. This could lead to a loss of licence and a loss of income.
While Critical Illness Insurance covers you for serious conditions, it doesn’t cover other, less severe conditions even if they stop you working. Common causes of time off work include mental health conditions and musculoskeletal issues.
As a result, many pilots also consider Pilot’s Income Protection. This protects a portion of your lost income if you’re unable to work due to illness or injury.
To understand the risks you might face, you can use our Life Expectancy Calculator below. This uses the ONS data to assess your mortality risks.
It’s difficult to put a figure on how much Life Insurance costs for pilots. Each individual is different and will have different needs for their Life Insurance. All of these factors will impact the price.
To give you an idea of cost, we’ve provided some example quotes below. These show how the costs can vary depending on your different policy factors.
As mentioned before, each provider has different attitudes when it comes to risk. What some see as high risk, others may not classify in the same way.
To show how costs can vary depending on your provider, we’ve provided some examples below. The quotes are based on:
The type of cover you choose will also impact the cost of your premiums. You can choose from level, decreasing, or increasing cover.
With decreasing cover, the risk of a costly claim reduces. As a a result, it’s usually cheaper. But with level cover, the potential claim will remain at the same amount for the term of the policy.
As a result of this, you can expect to pay more for a policy with level cover than you would for one that is decreasing. Using the same healthy 30-year-old pilot from above, we’ve provided an example of cost from Legal & General.
Level vs Decreasing Benefit
The duration of time you need the cover for will also impact the cost. Long-term Life Insurance will tend to cost more at the outset, because risks to health and mortality increase over time.
We’ve gained quotes for the same 30-year-old pilot, as before. The figures are from Liverpool Victoria, and assume the person is looking for £500,000 of level cover.
The amount of cover you need, or sum assured, will also affect your premium, with higher amounts naturally costing more. We’ve gained some example quotes for the healthy 30-year-old pilot as before.
The figures are from AIG, and show the cost of a level life policy with a 25 year term, but with different benefit amounts.
If you add Critical Illness, you’ll also be protected if you develop a serious condition listed in the policy documents. There’s a greater risk of becoming ill during our lifetimes than there is of passing away younger. As a result, you can expect to pay significantly more in premiums for Critical Illness Cover.
Using the same healthy 30-year-old from above, we’ve provided an example on the same basis as before. However, this time we’ve added a £250,000 critical illness benefit. The figures are from Zurich.
Adding Critical Illness
Life & Critical
The older we are, the higher the risk of passing away. So, premiums will increase based on your age at the start of the policy.
In the table below, we’ve outlined the cost of Life Insurance for a pilot at three different ages. The figures are from Guardian Life Insurance and are based on £500,000 of level cover for 25 years.
Impact of Age on Premiums
Providers will consider any pre-existing medical conditions you have when calculating your premiums. This includes your height and weight, and if you have an upcoming medical procedure.
Pilots have to be in the best shape possible to pass regular physicals to ensure they remain fit to fly. As such, active pilots tend to have minimal pre-existing health issues.
But, if you’re a little older and apply for a high benefit, the insurer may request further medical evidence. This could take the form of a GP report, a nurse’s screening or a full medical with a doctor. It depends on what comes up in your life insurance application.
If there are any current or previous health issues, underwriters might see insuring you as a greater risk. As a result, you may pay higher life insurance premiums.
Smoking shortens lifespans and raises the risk of deadly illnesses. As a result, smokers pay higher premiums — sometimes double — than those who don’t smoke.
The below example shows the difference between smoker rates and non-smoker rates. These figures are from Vitality, and are for the same cover basis as before; a £500,000 level benefit over 25 years for a 35-year-old pilot.
Smoker VS Non-Smoker
It’s not just occupation that insurers will look at. They also assess whether you partake in hazardous hobbies which could put you at a higher risk. These include:
Again, if any increased risk factors are found, you may be subject to loaded premiums or exclusions.
You can have guaranteed or reviewable premiums when it comes to Life Insurance. Reviewable premiums may be cheaper at the outset, but they can go up over the term of the policy as the insurer sees fit. In general, guaranteed premiums work out cheaper over the full policy term, as they won’t increase over time.
Whether they are guaranteed or reviewable, you may be subject to loaded premiums if you have higher risk factors.
EXPERT TIP! 🤓
Most online quote tools only show an initial premium without considering any additional risks. For people with riskier hobbies, roles, or health, the initial quotes may not be accurate. If you’re concerned about your risk factors, it’s always best to speak with a financial adviser.
There are some differences between Private Pilots Life Insurance and Commercial Pilots Life Cover. These relate to the risks involved in each role. For instance, the equipment, hours flown, and licence required will all differ. A private pilot will probably fly a light aircraft, whereas a commercial pilot might fly a large airliner.
These differences may not have a huge impact, but the final cost of cover could vary depending on what kind of pilot you are. Due to the regulations airline pilots are subject to, cover may be cheaper for a commercial pilot. However, both commercial pilots and private pilots can find life insurance without too much trouble. You should be aware that pilots’ critical illness cover may be subject to some limitations.
There is no industry-wide exclusion for aviation activities. As a result, most pilots can find a suitable life insurance policy regardless of what they fly. However, when it comes to flying a helicopter, it will depend what kind of flying you do.
If you fly a helicopter as a hobby, your provider will need to know:
Many insurers view this in a similar way to flying a light aircraft as a hobby.
If you pilot a helicopter professionally, insurers will need to know if your flying activities are high-risk. For instance, whether you fly to and from oil rigs or fly helicopters in the military. If there’s a low risk, it’s likely your application will be treated similarly to a private pilot’s Life Insurance application.
Typically, yes. Airline pilots and commercial pilots are often thought of as interchangeable terms.
The risk of cover for airline pilots can vary depending on which airline and which countries you fly to. As a result, your provider will probably need to know which airline employs you. But in general, airline pilots are not rated as having hazardous occupations. So, they shouldn’t have any major barriers to taking out a Life Insurance policy.
Income Protection pays a portion of your monthly salary if you’re signed off work due to an illness or injury. The payout can be used to pay the mortgage on the family home, or meet other bills and expenses.
Pilots Income Protection is different from Pilot’s Loss of Licence Protection. Income Protection covers you for any illness or injury which stops you from working. It will pay out a regular income for as long as you need it. Meanwhile, Licence Protection only pays out for a certain time, making it an ineffective long-term solution.
Income Protection can sometimes be more comprehensive than Critical Illness Insurance. This is because it pays out for anything that medically prevents you from working, rather than an illness of a specified severity.
Here at Drewberry, we’re a whole-of-market consultancy. This means we work with all the best Life Insurance providers in the UK. Many of the leading providers are suitable for pilots in most cases.
When carrying out a market review, our life insurance experts will source quotes from:
As we have access to the whole UK market, we can also use more niche providers if necessary. This means you can be assured of ending up with the best deal on life insurance for your own personal needs.
As well as paying out in the event of death or terminal illness, most providers will offer some extra benefits. So, it’s good to be aware of the additional features when you take out your life insurance policy.
Some of the extra services on offer include:
When deciding on the right life insurance company, it’s important to think about which features you’d value most. This will all play a part in choosing the best cover possible for your needs.
Our expert advisers arrange cover to protect clients and their loved ones every day. Over the years, we’ve placed cover for commercial pilots and private pilots alike.
Not only can we ensure you have the best cover for all your financial commitments, but we can also advise on inheritance tax implications. We’ll also use our negotiating power to get you the best coverage at the best price.
If you’re a pilot who’s thinking of buying life insurance, speak to one of our friendly consultants today. You can pop us a call on 02084327333 or email email@example.com.
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