VIPA Loss of License Insurance. Godsend or scam?
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Join Date: Jul 2010
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VIPA Loss of License Insurance. Godsend or scam?
I am unconvinced of the merit of the VIPA loss of license scheme. Reading from the VIPA flyer and the Product Disclosure document (PDS) the following are my observations.
For a VA Cruise FO salary near enough $60,000.
Benefit for Total Disability : 85% of salary = $51,000 per annum for up to 3 years (total $153,000)
A further sum of $102,000 payable after the loss is deemed permanent at the end of the previous 3 year period.
Total payment $255,000.
VA cover the CRFO with a policy that would payout 4 x salary ($240,000) in the above circumstances.
Clause 2.11 of the VIPA PDS states that “any benefits payable” will be reduced by “all income” paid or that the insured is entitled to from various sources including “other policies” and “superannuation trustees”.
Given that a lot of superannuation policies (eg Sunsuper) have a loss of income function, the disabled CRFO could have a payment due from a super policy.
With the $240,000 payment from the company policy and any other payment from super to be deducted from the VIPA payment, there is at best $15,000 total, to be paid to the CRFO from VIPA. If he has an income function on his super, this will be further reduced and probably become a negative figure.
Further I notice that under the definition of “total Disability” clause ii) imposes a requirement that the insured may not be working in ANY undertaking usually performed for wage or profit. Therefore if he has any other job on the side to keep bread on the table during his disability, he will get nothing from VIPA.
In the event that the unfortunate, dies rather than just being disabled, there is no payout, his family will get nothing, the way the PDS is written, as there is no provision for any death benefit.
For a VA FO or Capt. the situation is better, but not by much, as the company is covering him/her for a substantial sum, which must be offset. For VB Capt’s and FO’s the actual VIPA payout will not be reduced by the presence of a company policy and they get reimbursement for the premiums they pay. According to the VIPA brochure, The VB Capt may be paid up to a total of $760,750. For this he will pay the same as the VA CRFO who will be lucky to see any payment from the policy.
For half the VIPA premium, the CRFO could get LOL cover for $550,000 plus an additional $100,000 death cover. (total payout for death $650,000) from another provider.
Would someone from VIPA be inclined to, publicly, explain where I am mistaken in my calculations or interpretations.
Scam Sniffer
For a VA Cruise FO salary near enough $60,000.
Benefit for Total Disability : 85% of salary = $51,000 per annum for up to 3 years (total $153,000)
A further sum of $102,000 payable after the loss is deemed permanent at the end of the previous 3 year period.
Total payment $255,000.
VA cover the CRFO with a policy that would payout 4 x salary ($240,000) in the above circumstances.
Clause 2.11 of the VIPA PDS states that “any benefits payable” will be reduced by “all income” paid or that the insured is entitled to from various sources including “other policies” and “superannuation trustees”.
Given that a lot of superannuation policies (eg Sunsuper) have a loss of income function, the disabled CRFO could have a payment due from a super policy.
With the $240,000 payment from the company policy and any other payment from super to be deducted from the VIPA payment, there is at best $15,000 total, to be paid to the CRFO from VIPA. If he has an income function on his super, this will be further reduced and probably become a negative figure.
Further I notice that under the definition of “total Disability” clause ii) imposes a requirement that the insured may not be working in ANY undertaking usually performed for wage or profit. Therefore if he has any other job on the side to keep bread on the table during his disability, he will get nothing from VIPA.
In the event that the unfortunate, dies rather than just being disabled, there is no payout, his family will get nothing, the way the PDS is written, as there is no provision for any death benefit.
For a VA FO or Capt. the situation is better, but not by much, as the company is covering him/her for a substantial sum, which must be offset. For VB Capt’s and FO’s the actual VIPA payout will not be reduced by the presence of a company policy and they get reimbursement for the premiums they pay. According to the VIPA brochure, The VB Capt may be paid up to a total of $760,750. For this he will pay the same as the VA CRFO who will be lucky to see any payment from the policy.
For half the VIPA premium, the CRFO could get LOL cover for $550,000 plus an additional $100,000 death cover. (total payout for death $650,000) from another provider.
Would someone from VIPA be inclined to, publicly, explain where I am mistaken in my calculations or interpretations.
Scam Sniffer
Join Date: Dec 2004
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yes agree rather then get wrong info by agendas, contact them directly and get an accurate answer. Ohhhoooo thats not the answer you were fishing for was it Newbie!!!
Join Date: Jun 2004
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Couple of points.
The insurance policy was not designed for Va pilots, as they have automatic coverage by the company and at this point do not have the option to opt out. So anyone from VA looking at the VIPA policy needs to look at it in that light.
Secondly, the VIPA policy has an initial offer of having no application form, which means any and all prior or existing medical conditions will not affect your ability to claim.. This is a massive point of difference. Unless you provided full disclosure to the underwriter for the company policy, you will not get paid. If you have existing medical conditions, you may not get paid.
Thirdly, in almost all cases, except for youngish F/O's (from memory) the benefits are significantly better than either of the competing products on offer, and they are underwritten by Lloyds of London.
Fourth, in most cases, pilots are far more likely to have a LoL claim as they get older, therefore the policy is skewed slightly to provide greater benefit to older pilots, possibly at some expense to the younger guys. But given a choice, i'm sure that's how most people would want it.
We can only hope that post "integration" (whatever that means) VA pilots will enjoy the same ability to choose their insurer as the VB pilots currently do.
The insurance policy was not designed for Va pilots, as they have automatic coverage by the company and at this point do not have the option to opt out. So anyone from VA looking at the VIPA policy needs to look at it in that light.
Secondly, the VIPA policy has an initial offer of having no application form, which means any and all prior or existing medical conditions will not affect your ability to claim.. This is a massive point of difference. Unless you provided full disclosure to the underwriter for the company policy, you will not get paid. If you have existing medical conditions, you may not get paid.
Thirdly, in almost all cases, except for youngish F/O's (from memory) the benefits are significantly better than either of the competing products on offer, and they are underwritten by Lloyds of London.
Fourth, in most cases, pilots are far more likely to have a LoL claim as they get older, therefore the policy is skewed slightly to provide greater benefit to older pilots, possibly at some expense to the younger guys. But given a choice, i'm sure that's how most people would want it.
We can only hope that post "integration" (whatever that means) VA pilots will enjoy the same ability to choose their insurer as the VB pilots currently do.
When comparing this income continuance policy with that of other insurers/funds Income protection calculator, there is stark difference, and it is a concern as to what the fine print is. Most insurance companies have their product disclosure available freely online. What insurance company would put itself in a situation which goes against most common insurance practise of increased cost with increased risk i.e. The older one is, the more one pays? It just does not make sense! Junior F/O’s seem to be subsidising older pilots for a lower benefit??
The comparison chart between funds is almost misleading, as it does not publicly state what the payout is for non 737 Captains is. So if we take the case of two pilots of the same age, joining the VB on the same day, several years later due to the second GFC, one has a command, while the other does not – Why isn’t the benefit the same for both, in the event of a claim as I am sure their financial needs would be similar??
The other problem with this policy is that it is exclusive to VB group pilots. So what happens when one chooses to further their career with another carrier, or when VA/Vb falls over?? You have to start again with a new provider, and pity if one has turned 45 or more.
What number policy is this for viapa again 3rd or 4th??
The comparison chart between funds is almost misleading, as it does not publicly state what the payout is for non 737 Captains is. So if we take the case of two pilots of the same age, joining the VB on the same day, several years later due to the second GFC, one has a command, while the other does not – Why isn’t the benefit the same for both, in the event of a claim as I am sure their financial needs would be similar??
The other problem with this policy is that it is exclusive to VB group pilots. So what happens when one chooses to further their career with another carrier, or when VA/Vb falls over?? You have to start again with a new provider, and pity if one has turned 45 or more.
What number policy is this for viapa again 3rd or 4th??
Join Date: May 2005
Location: Brisbane
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So what exactly have VIPA done to date....Nothing!
The excuse of being only new, give them time just does not cut it anymore.
A lot of lip service and the promise of action and thats about it.
The excuse of being only new, give them time just does not cut it anymore.
A lot of lip service and the promise of action and thats about it.
Join Date: Mar 2000
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Interesting , according to the VBPC July Newsletter , VIPA recently sought access to the MBF whilst still "promoting" their revamped policy!!! What the? Hedging bets maybe!
On a different note , also like to know what VIPA has really done?? on the SYD Carpark issue & Augmented Crew Ops to Xmas Is/Cocos? Anyone?
On a different note , also like to know what VIPA has really done?? on the SYD Carpark issue & Augmented Crew Ops to Xmas Is/Cocos? Anyone?
Join Date: Jun 2004
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I never suggested it was ok for anyone to screw anyone. I was simply trying to point out the facts as i understand them and highlight that there are some areas that need looking at.
If a young guy takes out the policy in full knowledge of what is on offer, and understands that as he gets older, his protection continues to improve, then i don't see how anyone is getting screwed.
The only way you could imply that VIPA was trying to screw someone would be if they have mislead members as to what benefits where available. At the presentation i attended, they explained in full and had clear and direct comparisons with the other options available, and were quite frank and upfront explaining that the VIPA policy was not as good as the others for a young, fit healthy pilot, but far exceeded the others for the older, probably less fit and more prone to illness senior pilots.
If you interpret this as screwing the young guys, then I'm sorry, I can't help you.
If a young guy takes out the policy in full knowledge of what is on offer, and understands that as he gets older, his protection continues to improve, then i don't see how anyone is getting screwed.
The only way you could imply that VIPA was trying to screw someone would be if they have mislead members as to what benefits where available. At the presentation i attended, they explained in full and had clear and direct comparisons with the other options available, and were quite frank and upfront explaining that the VIPA policy was not as good as the others for a young, fit healthy pilot, but far exceeded the others for the older, probably less fit and more prone to illness senior pilots.
If you interpret this as screwing the young guys, then I'm sorry, I can't help you.
