I'd be interested to know what actuarial advice was sought because the LIPs 'income protection' scheme sounds a little precarious in the long-term.
It's a great idea that Emirate pilots help fund each other for when they can no longer work but the payment tail on a claim has the potential to be huge.
Forgetting that the payment will increase annually if a 30 year old was to loss their licence they would receive DH300,000 in total a year for the full 30 years until they were 60.
By the time the pilot's policy expires he would have received not only 3x his annual salary as payment from Emirates but also DH9million from LIPS.
That works out as roughly $2.5million from LIPS, plus roughly $500k from Emirates, and then whatever wage they earn from their non-pilot job. Sounds like an absolute steal of a policy!
The advice is the account could absorb 8 claims, the number of pilots on this scheme would have to grow parallel with the tail of the claims otherwise it could eventually make a loss, and who pays for the claims then? The more pilots there are on the scheme the more chance you have of getting a claim.