Understanding the “Why” Behind the Extra Premium
For pilots, the open sky is their office, a place of immense freedom and responsibility. But when it comes to life insurance, that thrilling profession often comes with a slightly higher price tag. If you’re a pilot who’s recently applied for life insurance and seen an additional premium, you’re not alone. Let’s break down why an insurer might approve your application with an extra $10 and what that means for you.
When a pilot applies for life insurance, the underwriting process takes a close look at the inherent risks associated with their occupation. While modern aviation is incredibly safe, the perception of risk, and the statistical data behind it, still play a role in how insurance companies assess policies. That extra $10, often referred to as a “flat extra,” is the insurer’s way of accounting for this perceived elevated risk.
The Underwriting Lens: What Insurers Consider
Life insurance companies are in the business of assessing risk. When you apply, they evaluate numerous factors to determine your insurability and the appropriate premium. For pilots, these factors extend beyond the standard health questions and lifestyle habits. Insurers will typically consider:
- Type of Flying: Are you a commercial airline pilot, a cargo pilot, or a private pilot, or do you fly for recreational purposes? Commercial airline pilots, for instance, often have a more favorable risk assessment due to stringent training, regulations, and maintenance protocols.
- Hours Flown: The total number of hours you’ve spent in the air can be a factor.
- Aircraft Type: Some aircraft are considered riskier than others.
- Route and Location: Flying in certain regions or over specific terrains might carry different risk profiles.
- Accident History: Any past aviation incidents or accidents will be scrutinized.
- Medical History: This is standard for all applicants, but for pilots, specific medical conditions can have a greater impact due to the rigorous health requirements for flying.
The additional $10 premium indicates that, after reviewing your specific profile, the insurer has identified a slightly elevated risk compared to a standard applicant. This doesn’t mean you’re uninsurable or that your profession is deemed overly dangerous; rather, it’s a precise calculation to balance the insurer’s risk exposure.
Decoding the “$10 Flat Extra”
A “flat extra” is a fixed additional charge added to the base premium. Unlike a percentage-based loading that fluctuates with the sum assured, a flat extra remains constant regardless of the policy’s face value. So, whether you apply for a $100,000 policy or a $1,000,000 policy, that additional $10 per thousand of coverage (this is often how flat extras are quoted, i.e., $10 per $1,000 of coverage, meaning an extra $100 for a $10,000 policy or an extra $1,000 for a $100,000 policy) would be applied.
The good news is that receiving an offer with a flat extra means your application was approved! The insurer is willing to provide coverage, simply with a minor adjustment for your unique occupation.
Is It Possible to Get a Better Rate?
While an additional premium for pilots is common, there are strategies you can explore to potentially mitigate this cost in the future or find a more competitive rate.
- Shop Around: Different insurance companies have varying underwriting guidelines and risk appetites. What one insurer considers a higher risk, another might view more favorably. Working with an independent insurance broker who specializes in high-risk occupations can be incredibly beneficial. They have access to multiple carriers and can help you find the one that offers the most competitive terms for pilots.
- Improve Your Health Profile: While your profession is a fixed factor, your personal health is largely within your control. Maintaining a healthy lifestyle, managing any existing medical conditions, and regular check-ups can positively impact your overall risk assessment.
- Consider Group Life Insurance: If you’re employed by an airline, you might have access to group life insurance through your employer. These policies often have more lenient underwriting and may not impose the same occupational surcharges. However, group policies might offer less coverage than you need, so it’s wise to consider it as a supplement rather than a complete replacement for individual coverage.
- Review Your Policy Periodically: As your career progresses and your experience grows, your risk profile might change. It’s a good idea to review your life insurance policy every few years and, if significant changes occur (e.g., a change in aircraft type or a promotion to a less risky flying role), discuss these with your insurer.
The Value of Coverage Outweighs the Cost
Ultimately, an additional $10 (or a flat extra equivalent) for life insurance is a small price to pay for the financial security and peace of mind it provides your loved ones. Life insurance for pilots ensures that, no matter what happens, your family will be protected from financial hardship. It can cover mortgages, education costs, and daily living expenses and provide a vital safety net during a difficult time.
Don’t let a small additional premium deter you from securing this essential protection. Understanding why it’s there allows you to make informed decisions and appreciate the value that a comprehensive life insurance policy brings to your financial plan.