Life Insurance (w/ GA coverage)

orange

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Orange
I know this is a topic that most of us don't want to think about but for those of us who have a family who depends on them, it's a necessary evil.

I have a 250k term life insurance policy from AOPA that is supposed to cover my flying. Many policies excludes aviation (GA). I pay $300/year for my AOPA policy.

A friend recently put me in touch with a finnacial planner she works with who is looking over my finances and life insurance came up. He doesn't think my AOPA policy covers GA because the price is too low.

Obviously, I know he wants to sell me his own company's policy. I understand that, that's why I'm really skeptical as to his "advice". He is trying to sell me a 250k policy for almost $1000/year. And also a long-term disability policy for $1300/year.

I think that I will tell him to take a hike because I feel like I'm being taken for a ride.

Any advice? Thoughts?

Thanks.
 
Just call AOPA and double check the language. It either will cover you or it won't.

Why would AOPA be selling coverage that doesn't cover you while flying anyway? That'd be pretty stupid. But I wouldn't put it past AOPA.

I think GA did something like double my rates. But it was still $40 a month (and I'm a healthy 31 year old). I also travel abroad several times a year and that added to it.
 
I just got a 1 million policy no GA exclusion, $985/yr.
 
Run from this guy. A competent financial adviser should just read the policy exclusions rather than guessing because the price is too low. It's possible your price on the new policy may be more because you're older now, or some other reason, but term life is a very competitive business. Shop around. Mine is well below $1,000 with a cancer history and a bit of age.....
 
orange said:
I know this is a topic that most of us don't want to think about but for those of us who have a family who depends on them, it's a necessary evil.

I have a 250k term life insurance policy from AOPA that is supposed to cover my flying. Many policies excludes aviation (GA). I pay $300/year for my AOPA policy.

A friend recently put me in touch with a finnacial planner she works with who is looking over my finances and life insurance came up. He doesn't think my AOPA policy covers GA because the price is too low.

Obviously, I know he wants to sell me his own company's policy. I understand that, that's why I'm really skeptical as to his "advice". He is trying to sell me a 250k policy for almost $1000/year. And also a long-term disability policy for $1300/year.

I think that I will tell him to take a hike because I feel like I'm being taken for a ride.

Any advice? Thoughts?

Thanks.
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yup...read your AOPA policy. what does your AOPA policy state? does it provide a death benefit if you die while engaged in flying? provide the financial planner with a copy and have him show you where flying is an excluded activity.

one branch of conventional wisdom states that you should have a 15-20 year level term policy in place that will replace 10-12 times your current salary. the 250K policy you have seems light to me. I'd be looking to double that, especially if you have a wife and/or children. of course, if you are single with no debt then you likely don't need as much insurance as you currently have. if you're in good health you should be able to find a $500K policy for a bit more than you're paying now.
 
I got mine through PIC life but I let it expire. It wasn't tremendously out of line with the not-necessarily-covered-for-aviation quotes I pulled up from SelectQuote at the same time./
 
My life insurance will pay for perishing in a plane accident, but not from sky diving. I guess no ejection seat for me......
 
Zeldman said:
My life insurance will pay for perishing in a plane accident, but not from sky diving. I guess no ejection seat for me......
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Amusingly, when I got my "covers piloting" policy, they asked if I drove racecars or skydived. I said no, but I might do that someday. He said as long as I didn't kill myself doing that for the next two years, I'd still be covered. I have skydived (once). I was a NASCAR official for over a decade, but I never raced anythying bigger than a gokart.
 
rk911 said:
of course, if you are single with no debt then you likely don't need as much insurance as you currently have.
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Serious question because I may be missing something: if you are single and presumably no kids, why would you need life insurance at all?
 
RudyP said:
Serious question because I may be missing something: if you are single and presumably no kids, why would you need life insurance at all?
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Many business reasons.
 
A lot of times companies take out insurance policies on their key players in case something happens to them.
 
flyingron said:
A lot of times companies take out insurance policies on their key players in case something happens to them.
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But in that case, the recipient is the company and the key player isn't shopping for a policy and paying premiums. Isn't that pretty different from what this thread is about?
 
RudyP said:
But in that case, the recipient is the company and the key player isn't shopping for a policy and paying premiums. Isn't that pretty different from what this thread is about?
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It would still have to be a policy that does not exclude GA, regardless of who the beneficiary is.
 
Why don't you just take that same money and invest it instead ? That way you can build an estate that your loved ones will inherit and you won't always be paying into a Ponzi scheme forever.
 
Art VanDelay said:
Why don't you just take that same money and invest it instead ? That way you can build an estate that your loved ones will inherit and you won't always be paying into a Ponzi scheme forever.
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Because life insurance is for dying long before you were planning to. I pay $360/year for a half million. At 6% it would take about 71 years for my $360 annual investment to hit $500k. That's a wee bit too late.
 
RudyP said:
But in that case, the recipient is the company and the key player isn't shopping for a policy and paying premiums. Isn't that pretty different from what this thread is about?
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And what if you are an owner of the business? Like I am. I have an insurance policy case I go out early and my partner has a policy in case they go out early. It doesn't matter if I pay for or the business pays for it I'm still paying for it. We are each the beneficiary of the others policy.
 
Art VanDelay said:
Why don't you just take that same money and invest it instead ? That way you can build an estate that your loved ones will inherit and you won't always be paying into a Ponzi scheme forever.
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As a guy that got 96000 within 5 days of paying my first Insurance premium ( which was only 400) on my house due to a lightning strike and subsequent fire, you have your head greatly displaced from where it should be if you think insurance is a ponzi scheme. Where can I legally turn 400 into 96000 in 5 days by investing? Oh yeah, you can't.
 
Art VanDelay said:
Why don't you just take that same money and invest it instead ? That way you can build an estate that your loved ones will inherit and you won't always be paying into a Ponzi scheme forever.
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Respectfully, it's a risk management scheme. Term life is meant to cover you until you don't need it anymore. Whole Life, well, that's a different story.
As Mr. Weenie said, if he paid $360/month for 71 years, he'd have half a million dollars, but once the kids are out of the house, and the house is paid off, he doesn't need as much insurance anymore. Even less if he has a fully funded 401(k)/IRA. No house payment, a million or two in retirement, Mrs. Weenie and the kids will be just fine without insurance.

Luckily, my company's life insurance covers me, with the only exclusion on accident insurance is the first 10 hours that an experimental is flown for personal use (Business use is covered). After that, I'm covered.
 
I took out enough money to pay off the mortgage and pay for college for the kids. Once they became adults and we were debt free, it no longer became essential. Great thing about term insurance, it's fairly cheap and you can let it go at any time.
 
Art VanDelay said:
Why don't you just take that same money and invest it instead ? That way you can build an estate that your loved ones will inherit and you won't always be paying into a Ponzi scheme forever.
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Why is it that in every thread about any kind of insurance there is someone who tries to talk the OP out of carrying any instead of answering the question asked. Your life situation and attitude toward risk is probably much different than theirs.
 
No need for me to add a voice to the discussion of the merits of life insurance, but personally I'm not doing business with someone who's biased assessment of a very complicated situation is that a competitiors product is inferior based simply on its lower cost.

Nor do I work with a financial planner who's compensation is through sales...
 
scottfromboston said:
Nor do I work with a financial planner who's compensation is through sales...
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My thoughts exactly. Lacks the objectivity that I'm looking for. I dumped him yesterday and looked into PIClife. They gave me a quote with MetLife for 500k 20-year term for $46/month.
 
orange said:
My thoughts exactly. Lacks the objectivity that I'm looking for. I dumped him yesterday and looked into PIClife. They gave me a quote with MetLife for 500k 20-year term for $46/month.
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Thanks for the data point! Surprisingly this rivals my employers supplemental life that specifically excludes GA.
 
I’ve been in the insurance industry for 25 years, including 10 years in claims and 15 in sales of all variety of insurance. I have the privilege of working with Pilot Insurance Center for the past several years. I would like to answer the questions in this thread as a licensed, insured, experienced aviation insurance advisor.

I am not a licensed pilot, however I’ve been around the world in my father’s rotor aircraft (his TT 18,000+) and the military, and am intimately familiar with most aircraft and the aviation industry. I know if you fly Part 91 you probably should pay nothing extra because you fly. Zero extra, you should pay what your landlubber friend next door would pay for someone your age, height/weight, etc., if you have sufficient total time and currency. And even with low currency, you can often get the best rates without any extra charges.

AOPA policies are through ING/ReliaStar (Voya) and cover aviation because IT ISN’T EXCLUDED. If it’s not excluded in a life policy, then it should be covered pending contestability. (I sell the same company as an individual policy. Good company). I believe their ultralight coverage is only half. Their service may be slow, but they should give you a correct answer. With an AOPA policy, you are a member of a group plan. Individual policies where you are the owner/insured and have advantages over a group policy.

If someone tells you your policy doesn’t cover GA because the price is too low, they have no idea what they are talking about. Most of the pilots I insure, about 20 a month, pay nothing, zero extra because they fly. Some individual companies will give you their absolute best rates, bar none.

(Personal philosophy: Run from financial planners that sell what they recommend. These days all these financial areas are specialized, too fast-evolving and technical to execute properly as a part-time endeavor.)

There are several financial situations where life insurance can be a cost-effective solution to business and personal situations. Most sales, however, go to married couples with or without kids, but lots of singles are insuring their student loans. For businesses, key person, buy/sell agreements, collateral assignments and other contracts are easily resolved with term and permanent insurance policies.

We are brokers, so we have access to most all the insurance companies with an appetite for aviation, professional and personal GA, including Prudential, MetLife and dozens of others. We scan dozens of companies for you.

You do not have to pay more, even if you’ve enough hours in a homebuilt/experimental. Ultralights always cost more, as does skydiving. Scuba may or may not impact your ability to get the best rates. Part 135 in aircraft smaller than 10-seats will bring extra charges usually.

Yup. Everyone’s risk tolerance is different, so the face amount and term length of your policy should be tailored to your circumstances.

Most but certainly not all group policies will not coverage GA, even within aviation companies. Ask your HR department to confirm in writing if it does. If it does, it may have a sub-limit or may not. Group polices are unique. If you’re covered, is it enough?

Calls me any time 214 276 1128 Dave Woods also on LinkedIn near Dallas, Texas .. office on the Addison Airport
 
scottfromboston said:
Thanks for the data point! Surprisingly this rivals my employers supplemental life that specifically excludes GA.
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I once got that clause removed from a company's employee life policy simply by asking about it.

Probably helped that the company's head counsel's husband flew Eclipse jets and was probably covered by the add-on plans for spouses. Haha.

And that... Is how I got to know both the head in-house company counsel and her husband. People I would have never otherwise met. Ha. ;)

(The email in the inbox from the head counsel was a little ominous since it took her a couple of months to fix it. So I'm sitting there one day and the email system says I have a new email from the top dog lawyer in a really big company. I almost didn't open it. Haha. Figured it wasn't going to be good news coming from her. LOL!)
 
Dave - here's a question for you:

I have skydived twice, both were tandem jumps -- once in 2004, and once in 2007. No plans to do it again or take it up as a sport. I know it may be company-specific, but in general, would that prior activity ding me on a term policy? (at least one of the applications asks if I have ever skydived)
 
My AOPA policy which is supposed to cover GA is around $900/yr for $1M in coverage for me and/or my wife.
 
pburger said:
Dave - here's a question for you:

I have skydived twice, both were tandem jumps -- once in 2004, and once in 2007. No plans to do it again or take it up as a sport. I know it may be company-specific, but in general, would that prior activity ding me on a term policy? (at least one of the applications asks if I have ever skydived)
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In my experience, if one of those "have you ever done...?" questions dings you on price, you can often work with the underwriter to sign paperwork essentially saying you won't be doing it again and if you do, THAT activity is exempted from the policy right up front.

It's a manual process for the broker/agent and some aren't willing to spend the time asking the underwriters or doing it. Eats up some hours and their commission is the same a policy sold where they don't have to mess with it.

They thought my behavior as a former male gigolo was too risky ... ;) ;) ;)
 
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