UPDATED: Feb 25, 2020
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Private aviation has historically been frowned upon by life insurance companies when evaluating applications for term life insurance. Commercial pilots who log their miles with the major airlines are accepted at better rating classes by life insurance companies. However, the same cannot be said for private pilots.
Life insurance companies consider the following factors when evaluating private pilots:
- Flight experience
- Number of hours flown per year on average
- Motor vehicle and aviation records
- Age and health considerations
Life insurance companies may offer any of the following scenarios to private pilots upon application for coverage:
- Aviation Exclusion – This type of coverage does exactly as the name suggests. The primary insured would have no life insurance coverage while participating in private aviation activities.
- Flat Extra Rating – A flat extra rating means the policy owner would pay an additional sum for the life insurance policy. For example, a flat extra of $2.50 per $1,000 of coverage on a $500,000 policy, would equal an extra $1,250 in premium on top of the base premium of the policy. However, the primary insured would have life insurance coverage during private aviation activities.
- Lower Rating Class – The life insurance company could just assign a lower rating class such as Standard, even though the primary insured may otherwise qualify for a better rating class such as Preferred. This would result in a higher base premium for the policy, but once again, the primary insured would be covered for private aviation activities.
Transamerica Life Insurance Company recently announced relaxed underwriting guidelines for private aviation pilots. With these new guidelines, it’s now possible for pilots to not only avoid aviation exclusions and flat extra ratings, but they may even qualify for a Preferred rating class! This is outstanding news for private aviation pilots, considering Transamerica Life is one of the few remaining A+ rated life insurance companies with a solid history of financial strength, claims-paying ability, and excellent customer service.