View Full Version : How much are you willing to risk - life insurance
08-18-2005, 01:58 PM
I didn't want to hijack Ron's thread, but I have a similar question with respect to life insurance.
As I understand my insurance policies (I could be interpreting this wrong, also - if so, please set me straight), if I die while flying in an experimental aircraft, my life insurance company can refuse to pay off my policies. :eek:
In general, the cost of purchasing a gyrocopter, the cost of training, operation, maintenance, etc. are the main reasons I am still a sideline enthusiast instead of a flying enthusiast :) - But, some day I do hope to be able to finance my dream hobby.
However, I am also aware that, if the above is true about my life insurance, I have to ask if I really want to risk that source of income for my family in the event I were to be killed while pursuing a (very enjoyable) hobby.
Have any of you thought about this? Is it really true? What are your opinions and how are you personally and financially dealing with this issue?
Thanks - Dave Bohler
08-18-2005, 02:31 PM
I have no life insurance because I have no body depending on me for more than I have in assets. That is all life insurance is really needed for.
In life insurance, you are betting you will die and the company is betting you will live. They have the statistics that you will probably live. -- and you have to die to collect.
Anytime anyone refers to this risky pastime I have, I simply tell them I have $100 in my pocket that says I can name FIVE people who have died in cars for every ONE that they can name that died in a gyro.
08-18-2005, 02:38 PM
As to whether or not your policy will exclude death in an experimental aircraft, you simply need to get a copy of your policy and carefully read it. Many policies don't exclude such activity automatically.
When you apply for life insurance, besides having your health checked, you may be asked about many of your personal activities (such as flying, sky diving, racing, smoking, etc.). If you answer "yes" to flying, that'll likely trigger a host of detailed questions regarding what you fly, how much, how often, what ratings held, etc. Based on your answers, your policy will very likely be written to exclude your flying activities. If you in fact want these activities covered, you'll have to pay the insurance company a lot more for such a risky behavior. :)
Now if you lie about your risky activities when you apply for a policy and then later die from one of them, the insurance company won't pay out. They always investigate the cause of death to see if they need to pay.
On the other hand, if you're not flying now or don't intend to in the next several year, one suggestion is to buy level term life insurance now while you're still considered a low risk by the insurance companies. Once they issue you a policy (without an aviation exclusion) it'll be good as long as you keep the policy in force. If you later take up flying, you're covered under your current policy (assuming it didn't have an aviation exclusion clause).
In my case, I waited until after I'd been flying gyros for a few years before I felt I needed life insurance (well... my wife felt she needed it). I now pay through the nose for a policy without an aviation exclusion.
Hope that helps,
08-18-2005, 02:52 PM
My wife and kids are covered by a term policy I have that covers my aviation activities should I bite the big one while in my gyro or other flying activity.
My wife wouldn't have it any other way, and I can't blame her.
08-18-2005, 04:54 PM
MOST Life and Accident policies have coverage for commercial flights only.
08-18-2005, 05:03 PM
Now if you lie about your risky activities when you apply for a policy and then later die from one of them, the insurance company won't pay out.
Hope that helps,
Because insurance is regulated by the states, I can't speak to them all. Here in Kalifornia, a life policy can only be contested for the first 2 years. After that, even suicide pays.........
08-18-2005, 07:00 PM
John and Gary, I have no life insurance at all. Would like to know where you got yours and some idea of what it costs. Might like to do this for my boy and the wifeypoo
08-18-2005, 08:11 PM
Ron: Before I got back into gyros...I checked my existing life insurance policy. It had no clauses voiding my policy should I get killed rock climbing...parachuting..gyro flying etc. Like I said.....I would not have considered flying had god forbid I get killed doing so....and Barb would get zero. Every family is different....and I do not want my wife to have to go seek employment to make ends meet.
I have since inquired to other insurance companies ...just out of curiosity....and last year...at my age of 50 then....I could have added $250,000.00 as a supplemental policy.....and stating I will be flying experimental aircraft. The premiums werent too bad....$1200.00 a year.
Had I not already had a much better deal locked in till I am 80....I would have bought this as it is better than nothing.
08-18-2005, 08:31 PM
Thanks Stan, that isn't too bad. Maybe even cheaper for me since I am not as OLD as you? ;)
Also do you get some of that money back if you decide to cancel the insurance after a few years, assuming you are still alive?
08-18-2005, 08:33 PM
Ron, you're younger then most of us, so you should be able to do better on the premium for a term policy, even as a smoker.
When I was going through my divorce, I was aware that I might be required to carry a policy protecting my ex-wife as part of the settlement. I got $100,000 in coverage, level term for 10 years, for $500/year, and no aviation exclusion, including experimental gyroplanes. She decided she'd clean me out up front, with no further financial obligations after the divorce, so I'm not sure I'll renew my policy.
I was age 50 when I started. At 38, I'd expect you could get it for half what I paid.
Beware the EAA and AOPA plans. I tried them first, and both excluded experimental rotorcraft at the time. I was really surprised at that from EAA. Check, though, they may have changed conditions by now. No matter who you go with, read the fine print. The only thing worse than leaving your widow penniless, is making her go to court to get what she's owed.
08-18-2005, 08:36 PM
Ron: I was going to mention that your age should reduce your premium. There wasnt any money back...its strictly peace of mind knowing everyone will be taken care of. That to me is worth it and I do not plan on her cashing in on it due to flying.
BTW....I just plain and simply lucked out by not being into flying when I took my policy out. There was a questionaire that had I filled out that I was flying....it would have caused a clause cancelling any payout due to aviation.
But, like I said....State Farm would have written me last year knowing full well I am flying experimental aircraft.
08-19-2005, 09:30 AM
I bought a 15 year level term $100,000 policy through USAA and it's $651 per year.
I'm 44, good health, non-smoker, blah, blah, blah.
08-19-2005, 10:42 AM
I donít have life insurance. I donít need it.
My business makes me money when I am at work and asleep if I am sick and on vacation.
It will even make me money when I am dead. I feel very blessed to have such a great job.
I am a crabby old landlord.
08-19-2005, 11:00 AM
Thanks to everyone who replied to this thread.
I personally have several whole life policies which I took out too many years ago to even think about. I certainly I took them out long before I even gave any thought at all about flying experimental aircraft. But after paying on them for a long time, they have reached the point which the dividends more than pay for the premiums, a very good financial situation for us. The value is not that much - about $20,000 total (probably about $60,000 accidental death), but they are enough to get me in the ground and give my wife something left over, along with retirement income, (Our retirement goal is to spend everything we have and then die - no inheritance tax problems for the kids :) ). I now need to actually read the policies to see if there are any flying exclusions - from the comments above I don't expect to find any, though.
It is very interesting to me that all the people on this forum (of which I think I have actually met only one) are so willing to share information not only about their hobby, but also even about their personal affairs with total strangers. I also have noticed that most everyone is extremely tolerant, supportive and encouraging of even us flying novices, It says a lot about the character of the people who use the forum, and lets us (novices) feel confident that if we ask silly questions that we will be taken seriously and not be laughed at. Even we have valuable information to offer, from our own backgrounds,
Thanks again - for the answers and for the group support - Dave Bohler
08-19-2005, 11:28 AM
I currently have a a 10-year term policy through American General out of Houston Texas.
08-21-2005, 06:07 PM
As a financial advisor and a life insurance agent for 33 years, I never stop being amazed at the various thoughts about life insurance. Let me make it real simple for you. If you want to buy life insurance go to a broker who offers many companies as each may have a different set of underwriting rules. Find the one that meets your criteria such as occupation, hobbies and health. Instead of spectulating, just ask you local life insurance agent professional.
There are many types of policies from whole life to universal life with term and variable life and universal variable life. Each, or a combination of different types should meet your families needs. One person said he didn't need life insurance. He is so right. When you die it is to late and you can't take it with you. Who needs life insurance is your dependants.
Ron, none of my business but I think you have a young family. If you have money for airplanes and gyro's, you have money for a term policy on your life for them.Who will help your kids finish their education or how will your spouse come up with the income she depended on you to bring home?
Policies are rated for your aviation advocation, but not that much. Also if you have a policy that is over 2 years old, you do not need to tell the insurance company you are now piloting a n aircraft.
Otherwise just don't tell them and hope you live 2 years. (contestable period for 2 years in most states). Not a good idea to not tell the truth, and everyone has a checkin date. We don't know your checkout date. Life insurance is PEACE OF MIND FOR YOUR FAMILY.
hope this helps.
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