LOL and Life Insurance - YOUR benefit or your EMPLOYERS?
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Join Date: Feb 2006
Location: UK
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LOL and Life Insurance - YOUR benefit or your EMPLOYERS?
Having lost a (Bristow/Bond/CHC) career recently due loss of medical, some notes of the experience may be of interest to those still aviating.
The employer at time of LOL had amended the LOL insurance policies without notifying the pilots, with various 'downgradings' over the years, leading to the most 'interesting' - they now insure THEMSELVES against LOL, NOT the pilot. Check the policy document - if you can get one out of your employer - and also your contract of employment to see if it allows such an amendment.
Had I returned to flying, I would have been 'locked into' working for the same employer for life if I wished to retain LOL cover for the ailment/illness already encountered (and most likely to finish my career). The LOL insurers will not cover previously existing ailments/illnesses (and why would they?) when arriving at a new employer. Likewise the life cover that your employer provides.
I chose to withdraw my 'pot' from the company pension, to find that they - quite legally it seems - decided to lop 25% off MY money because the fund was undervalued. Has YOUR employer had a 'pensions holiday' in recent years? A final salary 'promise' is worth nothing if they havent' got the money!
The broad issue arising from this experience is just how much of a 'benefit' these 'perks' provided by your employer are? I suggest giving thought to providing your own LOL/Life cover and/or pension, which would be entirely mobile. Each to their own, but think it over NOW, don't wait for the day you need it.
Good Health and Good Flying!
The employer at time of LOL had amended the LOL insurance policies without notifying the pilots, with various 'downgradings' over the years, leading to the most 'interesting' - they now insure THEMSELVES against LOL, NOT the pilot. Check the policy document - if you can get one out of your employer - and also your contract of employment to see if it allows such an amendment.
Had I returned to flying, I would have been 'locked into' working for the same employer for life if I wished to retain LOL cover for the ailment/illness already encountered (and most likely to finish my career). The LOL insurers will not cover previously existing ailments/illnesses (and why would they?) when arriving at a new employer. Likewise the life cover that your employer provides.
I chose to withdraw my 'pot' from the company pension, to find that they - quite legally it seems - decided to lop 25% off MY money because the fund was undervalued. Has YOUR employer had a 'pensions holiday' in recent years? A final salary 'promise' is worth nothing if they havent' got the money!
The broad issue arising from this experience is just how much of a 'benefit' these 'perks' provided by your employer are? I suggest giving thought to providing your own LOL/Life cover and/or pension, which would be entirely mobile. Each to their own, but think it over NOW, don't wait for the day you need it.
Good Health and Good Flying!
Join Date: Sep 2000
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Well I opted out of the company LOL scheme since I was paying also for the old fogeys and therefore save me £700 plus the pay out would have been taxed but now I pay with taxed income the pay out will not be taxed.
BS
You may be paying for the old fogeys now but you will be one some day and just watch your premiums rocket as you get older.
In our scheme the LOL insurance is taxed as a benefit in kind so it is classed as taxed income. The company council has tried to remove this as it is the company insuring itself, as explained by Notreally, but Brown's Tax Mafia won't budge at the moment.
HF
You may be paying for the old fogeys now but you will be one some day and just watch your premiums rocket as you get older.
In our scheme the LOL insurance is taxed as a benefit in kind so it is classed as taxed income. The company council has tried to remove this as it is the company insuring itself, as explained by Notreally, but Brown's Tax Mafia won't budge at the moment.
HF
Join Date: Dec 2003
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Tax status of LoL
I understand that in the recent Bristow pay round, the revised LoL provision was changed to tax free status, by a simple change of the wording. BHL captains are now eligible to receive £125,000 tax free, with co-pilots on £85,000. And the company have agreed to pay any tax liability, should Gordon try to get his sticky paws on any of it! 
bondu
bondu
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Having lost my licence last year at the grand old age of 41, due to newly diagnosed Type 2 Diabetes I feel eligible to comment. At early middle age I am now looking to have to spend to retrain for a new career having flown for the last 20 years and not being qualified to do anything else.
Loss of Licence Insurance covers the unexpected. We all have medicals once or twice a year and normally pass them without any problems. But ANYONE can be diagnosed with something totally unexpected and suddenly everything changes in your life. A Doctor friend has just been diagnosed with non-operable lung cancer which has already spread into his bones. He is 33, never smoked and is/was a marathon runner. He knows he will be lucky to see 3-4 months.
You have got to think whether you have the finances to continue to pay your bills if you lost your licence tomorrow. Most of us couldn't. You young guys that have borrowed huge sums to get into this game - Where would you be?
Loss of Licence Insurance is as it says - an Insurance. It is covered by insurance premium tax, the same as your car, house, pet or Life insurances, currently at 5% of premium. Therefore there is no tax penalty if they have to pay out (incidently only after you have lost your ticket for 6 months. Do you have a salary that will pay for that period?).
For those of you with company LoL schemes, check your contract to see what you are insured for. If you feel you need more to cover your mortgage/bills in the event, either speak directly to your insurance company
or your HR department and arrange to top-up. Check the policy annually to make sure it is being increased in line with pay rises. Be honest on the proposal forms - if there is any chance of getting out of paying, the insurance companies will find it.
For those of you without company schemes - get insured. The BALPA scheme is regarded as one of the best in terms of cost & simplicity.
Stay healthy
Jon
Loss of Licence Insurance covers the unexpected. We all have medicals once or twice a year and normally pass them without any problems. But ANYONE can be diagnosed with something totally unexpected and suddenly everything changes in your life. A Doctor friend has just been diagnosed with non-operable lung cancer which has already spread into his bones. He is 33, never smoked and is/was a marathon runner. He knows he will be lucky to see 3-4 months.
You have got to think whether you have the finances to continue to pay your bills if you lost your licence tomorrow. Most of us couldn't. You young guys that have borrowed huge sums to get into this game - Where would you be?
Loss of Licence Insurance is as it says - an Insurance. It is covered by insurance premium tax, the same as your car, house, pet or Life insurances, currently at 5% of premium. Therefore there is no tax penalty if they have to pay out (incidently only after you have lost your ticket for 6 months. Do you have a salary that will pay for that period?).
For those of you with company LoL schemes, check your contract to see what you are insured for. If you feel you need more to cover your mortgage/bills in the event, either speak directly to your insurance company
or your HR department and arrange to top-up. Check the policy annually to make sure it is being increased in line with pay rises. Be honest on the proposal forms - if there is any chance of getting out of paying, the insurance companies will find it.
For those of you without company schemes - get insured. The BALPA scheme is regarded as one of the best in terms of cost & simplicity.
Stay healthy
Jon
902Jon: agree wholeheartedly and wise words to boot.
But............
I have just discovered (as a result of the Bristow fiasco) that the insurance is taxed either on the premium or the payout. Common sense would dictate that 40% on say a £1700/annum premium is better than 40% on a £200,000 pay out!
But paying tax on £1700/yr is always going to bite hard, if you think you may never have to claim. Rock and a hard place I suppose.
Out employer (police) has just realised that they might have to pay back tax on these premiums for the last 6 yrs! But from now on...it's down to the employee as a company perk.
Still waiting for the final word from the Inland revenue..........
But............
I have just discovered (as a result of the Bristow fiasco) that the insurance is taxed either on the premium or the payout. Common sense would dictate that 40% on say a £1700/annum premium is better than 40% on a £200,000 pay out!
But paying tax on £1700/yr is always going to bite hard, if you think you may never have to claim. Rock and a hard place I suppose.
Out employer (police) has just realised that they might have to pay back tax on these premiums for the last 6 yrs! But from now on...it's down to the employee as a company perk.
Still waiting for the final word from the Inland revenue..........
