LOSS OF LIVELIHOOD INSURANCE

[Thomas coupling]

I was careful to change it from Loss of Licence Insurance and I was also careful to speak to Senior Pilot about advertising.
I am not advertising, I am doing some research whereupon I may be able to source a suitable product in due course and offline naturally.

So the purpose of this post is to test the water to see what rotorheads (and I am repeating this for the plank wing bretheren elsewhere, too) think about protecting their financial status, if a wheel comes off during their career. [As it did mine, many moons ago].

So the synopsis is this:
Once you have obtained your commercial licence, presumably you want to protect its value going forward. With that, I mean, find a way of insuring yourself against most of the adverse eventualities that may/will curtail your livelihood.

There are numerous products around:

Loss of \Licence Insurance [LoL].
Loss of income / income protection [IP].
Personal accident insurance [PA].
Critical Illness Insurance [CI].

LoL:
Most of you will be aware of LoL. What many of you may not be aware of, is that it rarely, if ever pays out. The product is ill defined but lulls pilots into believing it is a panacea for all ills. Without going into detail at this stage, the CAA decides if you will "Lose your Licence". Currently 95% of all licences falling into this category - are 'suspended' and not 'revoked'. The CAA reason being that your 'predicament/illness' may improve over time and you may be eligible to re-apply for your licence. LoL insurance will QED, not pay out.
IP:
Often difficult to get hold of and when obtained, is not very comprehensive. However, the future is IP because it - at the very least- gives a pilot who is unable to fly - time to recover or make new plans.
PA:
Very useful - you break your back mountain biking - the recovery phase is long and arduous but you will return to flying eventually. IP covers your salary and PA makes a one time large payment which you can use for anything from private medical treatment to physio, to a big recuperative holiday! And NO - not a new mountain bike!!
CI:
There are officially 11 critical illnesses that are registered for the purpose of pilot critical insurance claims. Recovery from a critical illness takes a long time and even though you may have IP, you could well do with a lump sum to aid recovery from the illness (as opposed to an accident - see above).
As I said before, the CAA will not revoke your licence for any PA or CI, they will only suspend it. The exception to the latter (CI) being one where the illness becomes terminal (but only at the latter stages will the CAA revoke licences).

So my question to you fine commercial pilots is:

Would you be interested in IP, PA, CI, either as a package, or individual if the premiums were reasonable (bearing in mind that the older you are, the greater the premium)?
Secondly - would you be even more interested if the policy/package stayed with you for your working life?
This would be "portable" throughout your career, covering you as you move from, say being an AFI, to a corporate pilot, to an offshore pilot, to HEMS for example. It saves having to apply all over again as you move jobs (which in itself can create hurdles).

This product is out there, it is prevalent in the FW world in Asia currently. It is proving to be very successful.
It does away with the CAA having any say whatsoever in any payouts.

Obtaining your CPL /ATPL - is not for the faint hearted. It is very expensive and time consuming. For some, the costs have been borne by the bank of mum and dad, or the house remortgaged.
Have you thought how you would cope financially if you were removed from flying for months, even years?
This product is a way and a means of protecting this commercial investment you made in flying.

Your views - gratefully appreciated.
TC

[HEMS chap]

You read my mind was thinking about this today! Minefield for a pilot going from job to job with a family etc................ love to see the results.

[Sir Niall Dementia]

Back through the 1990's a couple of LOL providers got burned when they paid out the full claim and 18 months later the claiment got his license back (I worked with two of the claiments back then) At that point the LOL providers started insisting on a full revocation of license with no chance of ever getting it back.

In late 1997 my license was suspended for a medical problem that could have stopped me for good, I was asked by the CAA if I wanted to claim my LOL, on the proviso that was it for ever. I stuck with it and got my license back 7 months later with a two crew stipulation which came off a year later. CAA medical department were fantastic, the help, support and advice I got from them was far better than anything from any of the hospital doctors I dealt with at the time.

I use a PHI product (Permanant Health Insurance) that my broker first fixed for me in 2001. If I'm medically grounded it kicks in after 6 months (contract sick leave) pays full salary for a year and then two thirds until retirement. BUT the small print says it pays while I can't work in a job I'm suitably qualified for. That is a definition I've never tested, but possibly leaves them holding all the aces.

SND

[Hughes500]

TC if it doesnt cover my beloved mountain bike I am not interested !!!!

[whatsarunway]

Very keen!

[parabellum]

I have heard of LOL payouts being limited to 20% of the sum insured for psychotic, neurotic and epileptic illness, on the grounds that one might recover from such conditions and return to flying. I doubt there are many epileptic pilots out there flying commercially though.

First question on many application forms, "Have you ever been grounded or refused a licence on medical grounds?" so returning to flying would appear to happen.

[Swiss Cheese]

Having been a LOL insurer in the nineties, I confirm the views above about the underwriting shift and the change in stance by the CAA. There are still Group schemes for larger operators, but I have recently encountered several disputes where insurers seek to rely on medical existing preconditions to deny paying out - some of which have been successfully challenged after lengthy and expensive use of expert medical evidence. Another alternative, pilot run private members schemes - more like a mutual fund than insurance product, are around in the Middle East and Asia, but the point worth researching is how solvent those schemes are - a couple of big claims can threaten the solvency of the fund. Caveat emptor!