You have a specialist occupation and your Income Protection needs to reflect this.
After so many years of study and hard work to get where you are as a Pilot, one of the most important assets that you have is your income – and it is worth taking the time (and speaking to someone who understands the marketplace) to ensure that you have quality cover and at a good price.
Income Protection provides you with an ongoing income stream in the event of not being able to work due to illness or injury. Due to the precision and immaculate health required for Pilots, only a few companies offer Income Protection to Pilots and Flight Engineers.
There are many possible variations within the policy and it makes sense to choose the options that are relevant to your occupation and lifestyle. We have covered some of the variations for Pilots below:
How much can you insure?
Usually you can insure up to 75% of your current income which can be increased as your income increases. For Pilots, however this is capped at $30,000 per month by some insurance companies. There are insurance companies in Australia that do not cap monthly benefits, however only offer an indemnity policy (based on earnings prior to claim (see below)).
Contract type – Indemnity or Agreed?
Indemnity contracts for Income Protection require you to provide financials at the time of claim to support a benefit amount. This can result in a lower than expected benefit if you have earned less over the 12 months prior to claim. Agreed policies ensure that you are paid based upon your full benefit amount no matter what you are earning at claim time.
There are insurance companies that offer both indemnity and agreed Income Protection amounts for Pilots.
Stepped or Level Premiums?
Stepped premiums are great in the short term, however will cost you much more in the longer term as your premium will increase each year due to your increasing age. If you are expecting to keep your policy in place up to retirement, reviewing the level premium option (which does not increase in cost up to age 65) could save you half of your premiums over your lifetime. This will ensure that your Income Protection premiums remain cost effective and affordable.
Waiting Period / Benefit Period
Choosing the right waiting and benefit period on your policy is paramount. This can be the difference between receiving benefit or not and it makes a large difference to the cost of your policy.
For Pilots, some insurance companies offer benefit periods of 2 years, 5 years and the maximum length of to age 55, however there are policies that will pay up to the age of 60 if you are unable to return to work. The minimum waiting period on Pilot’s policies is usually 30 days.
No offsets for Permanent Loss of License
Some Pilot Income Protection policies will offset any loss of license benefits that you receive due to permanent incapacity. It may be important that your Income Protection policy will pay you a full benefit at these times which is offered by some insurers.
Retraining Benefits
To help you return to work as quickly as possible while you are receiving a disability benefit, some Income Protection policies will provide additional funds for approved rehabilitation and retraining expenses such as occupational therapy and specialised training courses not reimbursed from elsewhere.
Life Shield is a specialist Personal Insurance brokerage business. We understand the marketplace for Pilots and we have the experience and knowledge to provide an efficient and professional service.
Either call us directly or use our online enquiry form to make an enquiry and we look forward to discussing your Income Protection and other Personal Insurance needs shortly.
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Life Shield understand the market for pilots and work in an efficient, professional manner. I have already recommended you to many of my friends and associates and will continue to do so...
David I.
Jetstar Pilot
Perth, Western Australia.
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