Please do your homework......
The insurance market is littered with failed self-funded income protection schemes, why would the EK one be any different?
You are all clever chaps, open excel and do the sums yourself:
Worldwide average age of claimants = 49 years old. Under LIPS that's an 11 year payout at Dhs 25,000 per month.
For each claimant that is Dhs 300K per year, or a 'liability' for the scheme of Dhs 3.3m.
Premium Dhs 320 per pilot per month.
Average number of annual claims worldwide is 3 pilots in every 1000.
If you have 1000 pilots in the scheme the fund receives Dhs 3,840,000 per year in premium and pays out Dhs 900,000 per year in claims. The same for year two except that the claims are now Dhs 1.8m (it’s cumulative don't you know) and by year 4 the fund is paying out almost as much as it receives. Every year thereafter is the slippery slope into the abyss.
One thing for sure is that when you buy insurance you want the certainty that what you have bought can meet its financial commitments. With the LIPS scheme you don’t have that, if there is money in the pot, you’ll get paid, if not you won’t. Why anyone would place the future protection of themselves and their family into an unregulated and financially unsecured scheme is beyond my ken.
A couple of other things to consider; claims and benefits are submitted to and managed by the EPC committee, if that isn’t open to abuse I don’t know what is.
What deductions are made from the fund by the committee, administrators, trustees, managers? Do we know who is drawing what salaries and how much?
Are audited financial statements for the fund available?
The EPC/LIPS committee are selling an insurance product and managing an investment fund, activities for which they are neither licensed by the Ministry of Economy nor the Central Bank. According to the law of the UAE, they are operating illegally.
Topcover may not be perfect but it is a 1000 times better bet than LIPS. AIU will be around a lot, lot longer paying out claims than the LIPS fund will be.