We have "loss of licence" which pays a fixed amount assuming you can never fly again, i.e had your legs chopped off.. this amount appears to be tax free as the policy is paid for by the employee, deducted at source from the wages, on the other hand, we also have " income protection" which covers the monthly fixed salary until you get your medical privileges restored ( limited to 2 years) .This income is taxed as it is a benefit provided by the company for the employee .. It seems reasonable in terms of the tax regime. The term " loss of licence " seems to be freely applied to all scenarios, perhaps not quite correctly in some cases.