Life insurance question

TexasAviation

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TexasAviation
I know I need to talk to my insurance guy to get the exact answer on my policy ... but I'm curious what you guys know about this.

I bought a 10-year term life insurance policy more than four years ago. At the time, I had no intention of ever getting my pilot's license, so I answered honestly "no" to the aviation question on the application.

Fast forward to today, when I'm a student pilot, and I'm wondering if my policy would cover me if I crashed and died piloting a GA aircraft. The policy itself doesn't mention anything about aviation being excluded (the only exemption I could find was suicide).

Just want to make sure my wife and kids are taken care of if the worst happened.

Any insights would be appreciated.
 
Care to name the carrier?
 
In every policy I've ever seen, once you're insured for two years, the policy isn't contestable for any reason other than fraud. Assuming you bought it yourself and gave them your real name, you should be covered.
 
I have northwestern mutual and if you buy the policy before becoming a pilot then you are grandfathered in....if you buy after then they put a rider on you and am pretty sure increase your rates to compensate.
 
Read the policy. That is where the answer is. USUALLY, if it is not excluded, it's covered.
 
From talking to agents, if you answer the question at the time of the application truthfully and they don't write something into the policy limiting aviation coverage you are fine. There's also a presumption that after two years any information you gave at the time you took out the policy was valid.

Even PIC life when I got my no-pilot exclusion asked questions about Skydiving, Scuba Diving, and driving Racecars. I said no but I might someday, but the agent says it only matters what I'm doing today. I've done the first two subsequently. I was actually a NASCAR official at the time I took out the policy so I figured the third was a possibility though I've moved away from that over time.
 
I had policies from Mutual of Omaha ---> same deal (grandfathered in)
 
Same situation...I just asked my agent last week. He said it has been over 2 years, so there is no issue. I have State Farm.
 
My underwriter when I said I was a pilot, asked a few questions on a form they already had available... Time flown per year, ratings, etc. The agent later said the answers made zero difference in the price.
 
Great question. I have always wondered about this. Now that I am actively flying again, it applies to me. Glad to hear that unless it is excluded, it is probably covered.
 
As others have stated, you are covered. But one thing to be very careful of is to not let the policy lapse. I have had a term policy in place for over 10 years, but about 5 years ago I changed banks and never got the auto pay set up properly. I paid the premium by check for a year or so, and then missed a payment. By the time I realized it, it was one day too late to make a catch up payment, so I had to request a reinstatement. For that I had to reaffirm all of the same things that I did when the policy was new, including the part about not being involved with GA. Fortunately, at that time I had not begun flight training, so I answered in the negative and the policy was reinstated for the same premium. But if that were to happen again today, I would probably not be able to reinstate the policy without a big premium increase.
 
In every policy I've ever seen, once you're insured for two years, the policy isn't contestable for any reason other than fraud. Assuming you bought it yourself and gave them your real name, you should be covered.

This is what my insurance company told me when I ask. I had the policy in force for more than two years when I called. They told me I was fine.
 
I know I need to talk to my insurance guy to get the exact answer on my policy ... but I'm curious what you guys know about this.

I bought a 10-year term life insurance policy more than four years ago. At the time, I had no intention of ever getting my pilot's license, so I answered honestly "no" to the aviation question on the application.

Fast forward to today, when I'm a student pilot, and I'm wondering if my policy would cover me if I crashed and died piloting a GA aircraft. The policy itself doesn't mention anything about aviation being excluded (the only exemption I could find was suicide).

Just want to make sure my wife and kids are taken care of if the worst happened.

Any insights would be appreciated.

I am a life/disability insurance broker located in Southern California, who also deals within all 50 states. I can tell you that you are covered, so long as you were truthful on your application, and that you weren't piloting at the time, or didn't plan on piloting at the time you took out your policy.

As others have mentioned, there is a 2 year suicide clause, as well as a 2 year contestability period, where the insurance carrier can rescind the death claim, if they can prove that you clearly misrepresented facts on your application. This means that within those 2 years, the insurance carrier can rescind your claim for whatever reason and that the misrepresentation doesn't even have to be tied to the cause-of-death (ie: stating that you don't use tobacco on your application and getting it past the insurance carrier, but they find out after you passed away in a plane crash that you lied about your tobacco use).

Although this is highly unlikely and not something that we see too often, it technically can happen. That's why it's always best to be upfront and truthful when applying for life insurance, as it would be worse to think that you're covered, only to find out after the fact that your family isn't taken care of.

Lastly, if you are piloting, or plan to become a pilot at the time you're applying for life insurance, the insurance carrier will either charge you a flat extra (ie: extra charge on top of your rate), or you can typically just ask for an aviation exclusion, which doesn't cover you when piloting. The flat extra charge can be rather expensive, but at least you have both options.

Hope this helps!
 
Ha, if they successfully deny the claim does the beneficiary get the premiums back?
(they seem unearned to me)
 
I bought a policy just a few months before I started flying, when I inquired about it, I had to provide a statement to the fact that I hadn't started training before. I provided a photocopy of the first page of my logbook and my medical application as proof. I was covered to begin with, but because it was so soon and I asked, they wanted proof, I understood that.
 
Ha, if they successfully deny the claim does the beneficiary get the premiums back?
(they seem unearned to me)

Yes, if they find out that there was misrepresentation, then the insurance carrier will deny the claim, and refund all unearned premiums to your beneficiary(ies).
 
IMO insurance is a straight scam, you'd be better off taking those premiums and putting them in a savings account.

Time and time again, when it comes time that the insurance company needs to hold up to their end of the deal, they squirm out of it.
 
IMO insurance is a straight scam, you'd be better off taking those premiums and putting them in a savings account.

Time and time again, when it comes time that the insurance company needs to hold up to their end of the deal, they squirm out of it.

no joke - i watched a segment on 60 minutes tonight about how they (insurance companies and FEMA) are screwing thousands of Hurricane Sandy victims out of paying claims...they point blank altered the engineers reports that the houses had structural damage so they wouldn't have to pay.

Insurance companies make money not paying you...and they have really good legal help...oh, and lobbyists. :rolleyes:

That said, I'll roll the dice and hope that God forbid something happens to me that my family gets paid out. I'd say stick with the bigger names and you should be OK, hopefully.
 
It's a good thing nobody is relying on insurance when I die. 1 since I dont have any, and 2 because based on all the things you guys mention them asking I would have to answer yes to damn near everything and would probably never get insurance. Planes, motorcycles, racecars, boats, no skydiving yet but hell why not?
 
I have a policy that covers my flying,much more expensive,than a normal non smoking person. Hope to outlive it.
 
Sounds like you will still be covered as others have said.

I took out a 10 year term policy and excluded 'aviation related activities' to keep the cost reasonable. So if I die skydiving or as PIC the policy does not cover. My wife was ok with this since she is the affected party.

Oddly, when I got the policy and read it, it excluded 'commercial skydiving'. Since I am an instructor, I read that as if I die on a 'fun' jump, the policy will still pay. Not that I make too many 'fun' jumps anymore...
 
Read the policy. That is where the answer is. USUALLY, if it is not excluded, it's covered.

Yes, and most policies will have a clause that will detail what they consider to be reckless / dangerous activity such as flying, skydiving, scuba diving race cars, etc... along with suicide.

Funny, the odds are stacked up against me more just getting in my car and driving the Los Angeles freeways...
 
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I took out a 10 year term policy and excluded 'aviation related activities' to keep the cost reasonable.

I took out a pretty dang big policy about 5 years ago ... we joke I'm more valuable dead than alive. I was flying an experimental at the time. I shopped around quite a bit and a policy from American General that includes coverage for piloting experimental aircraft was only a few percent more than my other insurance quotes. If you shop around, this is not a problem - at least it wasn't for me.
 
Life insurance is protection for your survivors from your debt. Pay off your debt. Cancel your life insurance.
 
I took out a pretty dang big policy about 5 years ago ... we joke I'm more valuable dead than alive. I was flying an experimental at the time. I shopped around quite a bit and a policy from American General that includes coverage for piloting experimental aircraft was only a few percent more than my other insurance quotes. If you shop around, this is not a problem - at least it wasn't for me.

Wow, you must have not gotten charged a flat extra, which is great news. The insurance carrier will typically base their decision on experience, hours, etc.

The important thing to remember is that not all carriers have the same underwriting guidelines, so per usual, it's always best to shop around. Although most of the carriers are pretty similar, you can still obtain a better rate class by shopping it around and knowing the specifics.
 
Life insurance is protection for your survivors from your debt. Pay off your debt. Cancel your life insurance.

Agreed. Unless of course you're one of the very few fortunate people whose net worth exceeds the federal estate tax exemption (currently $5.43MM per spouse as of 2015), and are going to be facing a very large estate tax liability, upon passing. Not a very common problem, but life insurance held outside of your estate in an ILIT (Irrevocable Life Insurance Trust), is one of the best solutions, as it can provide estate liquidity for pennies on the dollar.
 
Life insurance is protection for your survivors from your debt. Pay off your debt. Cancel your life insurance.

I disagree. I am totally debt free including my house. However if I die my wife loses my income. She doesn't necessarily need it of course since we're out of debt, but why wouldn't I want to avail her of 10 years worth of my income if I can do it reasonably inexpensively?
 
Sounds like you will still be covered as others have said.

I took out a 10 year term policy and excluded 'aviation related activities' to keep the cost reasonable. So if I die skydiving or as PIC the policy does not cover. My wife was ok with this since she is the affected party.

Oddly, when I got the policy and read it, it excluded 'commercial skydiving'. Since I am an instructor, I read that as if I die on a 'fun' jump, the policy will still pay. Not that I make too many 'fun' jumps anymore...

Yeah right!

They'd say you were somehow doing it for money, I'd wager if you jump with a camera they would say you were shooting video for profit, heck probably say you were on a "training jump" for work ether way.

Better to make yourself a small radar target, best insurance you can get, secure your assets, use cash money, don't finance.
 
That's why it's always best to be upfront and truthful when applying for life insurance, as it would be worse to think that you're covered, only to find out after the fact that your family isn't taken care of.

I am quite sure the nature of life insurance payouts is such, that you will not "find out after the fact that your family isn't taken care of":
 
IMO insurance is a straight scam, you'd be better off taking those premiums and putting them in a savings account.

Time and time again, when it comes time that the insurance company needs to hold up to their end of the deal, they squirm out of it.

Insurance is shared risk, not a scam. Many insurance companies run their underwriting at a loss. What they care about is float.

It is a scam for people who don't understand what they are buying.
 
IMO insurance is a straight scam, you'd be better off taking those premiums and putting them in a savings account.

Time and time again, when it comes time that the insurance company needs to hold up to their end of the deal, they squirm out of it.

1. If only people did things like that (put money in savings for a rainy day). Most people just don't.

2. You're always better off not buying insurance. Until you need it. Then it seems like a bargain.

3. A policy is a contract, so there is no squirming out of it. And bad faith judgements (from a company not paying claims they should) can result in massive payouts to the insured. This is something good companies don't risk. Yes, less reputable companies will - which is why you DON'T shop based solely on price.

4. Don't change companies every time your policy comes up for renewal, trying to save $. Every company's policy is different. Some changes may be subtle, others substantial - but even small differences can make a difference between whether a claim is covered or not.

You'll never be able to 100% understand your policy, but you should be able to understand most of it. When you change companies every year you'll never know what you have at any specific time.

READ YOUR POLICY. And if you have questions, email your agent/broker. Don't call - get the answer in writing.
 
You'll never be able to 100% understand your policy, but you should be able to understand most of it. When you change companies every year you'll never know what you have at any specific time.

READ YOUR POLICY. And if you have questions, email your agent/broker. Don't call - get the answer in writing.

That right there is one of the many reasons I straight call it for what it is, a scam.

Example

In the EMS industry many folks complain about their bills, how dare that aircraft who picked me up of the side of a embankment at 0300 in the rain, who saved my bacon, charge that much.

When the real issue is why their deadbeat insurance company doesn't step up and handle their end of the bargain.

The amount of regulation the aviation industry has, the amount of oversight and cut and dry no BSing around, it's night and day from the turkey shoot the insurance industry enjoys.

And they will continue to get away with it, because folks like you stand up for them, even though in the same breath you say things like "You'll never be able to 100% understand your policy".


Houston, we have a problem :yes:
 
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That right there is one of the many reasons I straight call it for what it is, a scam.

Example

In the EMS industry many folks complain about their bills, now dare the aircraft who picked me up of the side of a embankment at 0300 in the rain, who saved my bacon, charge that much.

When the real issue is why their deadbeat insurance company doesn't step up and handle their end of the bargain.

The amount of regulation the aviation industry has, the amount of oversight and cut and dry no BSing around, it's night and day from the turkey shoot the insurance industry enjoys.

And they will continue to get away with it, because folks like you stand up for them, even though in the same breath you say things like "You'll never be able to 100% understand your policy".


Houston, we have a problem :yes:

To be fair, health "insurance" isn't really insurance, so the comparison is not a great fit.
 
Out of curiosity, if you stop flying (but still have your license) would you be able to get life insurance at normal premiums?
 
On the same note, I'm dealing with a friend right now who (long story) had collision and liability insurance on a car that they had no interest in (their name was no where on the loan, title, etc). Scum bag insurance co still was happy to take their premium, even with no insurable interest :goofy:

Now the car got smashed, for a valid reason the insurance company won't pay out for collision, ALSO they won't pay the state minimum property damage to the cars actual owner.


But yes, please continue to tell me how insurance is anything other then a expensive joke :rolleyes:
 
Out of curiosity, if you stop flying (but still have your license) would you be able to get life insurance at normal premiums?

It really depends.. If you're not planning on flying anytime in the future and can answer the question truthfully, then it won't be a problem, regardless of whether or not you currently hold a pilots license.

On the application, most carriers will ask whether you currently hold a pilots license, or if you have ever piloted before. These wouldn't be a problem, so long as you answer the question on the application truthfully. Some carriers will ask you if you're planning on piloting within the next 2-5 years, or ever. It really depends on the carrier, and also helps to have an agent/broker who is familiar with each carriers underwriting guidelines. If you've stopped piloting entirely, you should not have a problem obtaining normal rates.

To be honest, it's a bit of a slippery slope and really hard for the insurance carrier to gauge, as you could change your mind 4 years later and decide that you want to pilot again, in which, at that time you'd be past the 2 year contestability period, and wouldn't have any problem. That's why it's always best to be truthful on the application - It's a contract, and you just answer the questions truthfully, as they're written.
 
no joke - i watched a segment on 60 minutes tonight about how they (insurance companies and FEMA) are screwing thousands of Hurricane Sandy victims out of paying claims...they point blank altered the engineers reports that the houses had structural damage so they wouldn't have to pay.

Insurance companies make money not paying you...and they have really good legal help...oh, and lobbyists. :rolleyes:

That said, I'll roll the dice and hope that God forbid something happens to me that my family gets paid out. I'd say stick with the bigger names and you should be OK, hopefully.

yeah,,,But....

I will stick up for the big , bad Insurance companies on this one.... Alot of policies excluded damage from" HURRICANES"...

So, to buy votes in the next election, the guv ( current administration)purposely called the event a "Superstorm" and not a hurricane to get insurance companies to have to pay claims....:mad::mad::mad::mad2:...

Now the insurance companies are getting even....:rolleyes::rolleyes:;)
 
Life insurance is protection for your survivors from your debt. Pay off your debt. Cancel your life insurance.

No, it's designed to replace your income for x number of years if you're not around to produce any.
 
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