Word of caution for older Wannabes
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Word of caution for older Wannabes
When weighing up the pros and cons of giving up a well-paid career to go into aviation, one "con" to consider is the cost of life insurance and loss of licence insurance, particularly for the older pilot.
I am in my mid-forties, fly for a reputable business jet operator, and have been looking into term life cover and loss of licence insurance. With no loading for health problems and having completed an aviation questionnaire from the insurance company, I have had my premium increased by 300%!
This morning I received the Loss of Licence rates from BALPA (members get an 8% discount) and the basic rate for £10,000 of cover at age 45 is £120.00per annum. This policy pays out nothing for 1 year after which it pays out £200.00 per month of the total sum assured until that sum is used up whereupon it ceases to pay. By age 50 the monthly premium for the same cover rises to £205.00 per month. For a reasonable level of cover increase premiums pro rata.
I know 2 pilots who recently went for their routine medicals and walked away without their licences (and their jobs). My company pays the legal minimum SSP and so I have no illusions about what would happen to me in the same scenario.
I think this is something that older wannabes should take seriously when considering whether or not to take the plunge. On the pro side, the job and lifestyle (at least in bizjets) is as good as it gets!
I am in my mid-forties, fly for a reputable business jet operator, and have been looking into term life cover and loss of licence insurance. With no loading for health problems and having completed an aviation questionnaire from the insurance company, I have had my premium increased by 300%!
This morning I received the Loss of Licence rates from BALPA (members get an 8% discount) and the basic rate for £10,000 of cover at age 45 is £120.00per annum. This policy pays out nothing for 1 year after which it pays out £200.00 per month of the total sum assured until that sum is used up whereupon it ceases to pay. By age 50 the monthly premium for the same cover rises to £205.00 per month. For a reasonable level of cover increase premiums pro rata.
I know 2 pilots who recently went for their routine medicals and walked away without their licences (and their jobs). My company pays the legal minimum SSP and so I have no illusions about what would happen to me in the same scenario.
I think this is something that older wannabes should take seriously when considering whether or not to take the plunge. On the pro side, the job and lifestyle (at least in bizjets) is as good as it gets!
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Good point and not one I considered until I was quoted £900/yr for 3 x salary by Hiscox. But at least that allows me to stay on my feet until I sort something else out, shoudl the worst come to the worst.
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In my case, private flying for 10 years or so, modular cpl/ir/mcc, flying instructor, air taxi to 1500 hours then being in the right place at the right time - easy, really!
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Well I'm a younger wannabe, but this has always worried me. If you have all the insurance and what not and lose your licence, what % of your salary are you likely to receive and for how long?
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roll over
From the information I have in front of me, the sum assured is set by you. At your age, the maximum sum assured would be £300,000 OR 7 times your salary if under 30 years of age and 5 times salary if over 30 years of age. £300,000 would cost you £627.00 pa. until age 25 when the premiums would start to increase until at my age the premium would be £3,609.00 pa for the same level of cover and rising fast thereafter! (and these numbers are net of the 8% BALPA discount).
The payments would begin after 1 year of loss of licence and represent 2% of the total fund until the fund was gone. As I have already said, this and the massive increase in cost of life cover (mortgages, anyone?) is something that older Wannabes in particular should consider, in my opinion. It's certainly opened my eyes!
From the information I have in front of me, the sum assured is set by you. At your age, the maximum sum assured would be £300,000 OR 7 times your salary if under 30 years of age and 5 times salary if over 30 years of age. £300,000 would cost you £627.00 pa. until age 25 when the premiums would start to increase until at my age the premium would be £3,609.00 pa for the same level of cover and rising fast thereafter! (and these numbers are net of the 8% BALPA discount).
The payments would begin after 1 year of loss of licence and represent 2% of the total fund until the fund was gone. As I have already said, this and the massive increase in cost of life cover (mortgages, anyone?) is something that older Wannabes in particular should consider, in my opinion. It's certainly opened my eyes!
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Apruneuk,
The info in your first post is only partially correct. Here are two quotes from the key fact document:
* It’s an insurance policy that pays out a lump sum if you permanently lose your flying licence due to ill health.
* If you lose your flying licence temporarily due to ill health, it will pay out temporary benefits, after expiry of the deferred period.
So the income replacement bit kicks in after 12 months with a temporary suspension of your class 1. You can pay higher premiums and get the deferral down to 6 or 3 months. The lump sum is payable to full policy value upon permanent loss of the Class 1.
You are correct though that older wannabes don't usually think of this cost difference. Here is the link for more info: Balpa
The info in your first post is only partially correct. Here are two quotes from the key fact document:
* It’s an insurance policy that pays out a lump sum if you permanently lose your flying licence due to ill health.
* If you lose your flying licence temporarily due to ill health, it will pay out temporary benefits, after expiry of the deferred period.
So the income replacement bit kicks in after 12 months with a temporary suspension of your class 1. You can pay higher premiums and get the deferral down to 6 or 3 months. The lump sum is payable to full policy value upon permanent loss of the Class 1.
You are correct though that older wannabes don't usually think of this cost difference. Here is the link for more info: Balpa
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Adios
I didn't want to go into too much policy wording detail in my post but the lump sum is only payable when the licence is lost due to ill health and [I]in the opinion of the insurance company[I] it will not be regained for 5 years.
Having been an insurance broker in a past life I can tell you that that little phrase means that it is highly unlikely that many people would receive anything until at least a year had elapsed.
I didn't want to go into too much policy wording detail in my post but the lump sum is only payable when the licence is lost due to ill health and [I]in the opinion of the insurance company[I] it will not be regained for 5 years.
Having been an insurance broker in a past life I can tell you that that little phrase means that it is highly unlikely that many people would receive anything until at least a year had elapsed.
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Apruneuk,
I see where you are coming from now. Having seen non-pilot family members have to fight insurance companies to get paid, a good dose of skepticism is in order.
On the other hand, I've known six people lose their medicals. Three were pretty clear cases they'd never get them back. Two got them back within 3 and 12 months respectively and the sixth is still suspended but will most likely get his back in less than a year. Perhaps a year wait is justifiable, though five would not be. Does the policy have that five year figure in it, or is that your opinion of how they might act based on your experience from inside the industry?
By the way, I didn't wish to throw salt in the wound by asking any of them if they were insured. I only know that one of the above was insured. He volunteered this info and told me that due to his age being past 50, he was not insurable.
I see where you are coming from now. Having seen non-pilot family members have to fight insurance companies to get paid, a good dose of skepticism is in order.
On the other hand, I've known six people lose their medicals. Three were pretty clear cases they'd never get them back. Two got them back within 3 and 12 months respectively and the sixth is still suspended but will most likely get his back in less than a year. Perhaps a year wait is justifiable, though five would not be. Does the policy have that five year figure in it, or is that your opinion of how they might act based on your experience from inside the industry?
By the way, I didn't wish to throw salt in the wound by asking any of them if they were insured. I only know that one of the above was insured. He volunteered this info and told me that due to his age being past 50, he was not insurable.
