Many of us think Pilots have dream jobs: flying aircraft high in the skies way above us other mere mortals. However, even Pilots can fall sick or become injured. There are no guarantees for anyone – each and every one of us may one day have to cope with the unexpected.
What Pilots Should Know About Income Protection Insurance?
When a pilot is unable to work in the capacity for which his/her license is held, Loss of License Cover (LLC) provides protection for illness and injury. However, an Income Protection Policy (IPP) provides a longer protection period, at a higher rate of cover, and usually continues up until the age of 60.
An IPP may not be tax-deductible but, if premiums are paid on time, it cannot be cancelled like LLC.
To be eligible for an IPP, there are specific criteria designed for each particular applicant that must be met, and an IPP does not provide protection for aircraft.
Why Pilots Should Get Income Protection Insurance?
Statistics from the Institute of Actuaries of Australia (2000) show that every working Australian has about a 30% chance of becoming disabled for up to three months before turning 65.
Without an IPP, illness or injury can leave you and/or your family, with burgeoning financial burdens relating to debts, rent or mortgage, medical costs, children’s expenses, and monthly bills for utilities, food, transport, and clothing.
On the other hand, an IPP can shield you from financial disaster by providing a monthly benefit and payment of up to 75% of your regular monthly income.
So, Why Would You Risk Not Investing in Ipp?
When Would Pilots Make an Income Protection Insurance Claim?
Although you and your insurance company hope you never need to make a claim, there are three main occasions when you can.
A claim for partial disability is possible in the event of an illness or injury that impacts you in a way that means you can only work at a reduced capacity, or work for a reduced number of hours.
Should you be totally and temporarily disabled so that you cannot work, you can claim a Total Disability benefit.
In the event of your death, your loved ones can claim the lump sum benefit for which you took out your IPP.