I was recently working on quotes for pilot life insurance for a client of mine a few days ago when he called and said a pilot co-worker and friend told him that a AOPA, Aircraft Owners and Pilots Association insurance agent, had given him quotes on their group policy that were lower than what I had quoted. They are both AOPA members, so this didn’t surprise me as associations like this should be making accessibility to member benefits like term life insurance plans easier to obtain.
My client and his friend, who are both in good health, fly helicopters ferrying passengers and freight to offshore rigs in the Gulf of Mexico. Most of their aviation activities are scheduled and they avoid messy weather, but they do occasionally have to make emergency runs, which were not listed as general aviation exclusions
Pilot Life Insurance – Is AOPA Saving You Money?
So, I went to the AOPA website to see what the scoop was on their aviation coverage and here is what I found.
AOPA group life insurance and term life insurance are not created equal
Upon my review, I discovered that part of the problem was there was not an apples to apples comparison going on between the insurance coverage I had quoted and what was offered through their association.
- My client and his friend both wanted $750k of term pilot life insurance, which is what I had quoted.
- AOPA insurance policy offers a group level 10 or 20 year term product but with a maximum insurance coverage of $499k.
- AOPA has another product that offers $500k but in the product description mentions that you can get up to $1 million at group rates. If not read carefully, and in my case confirmed with a phone call to AOPA, you might miss that the $1 million is $500k for you and $500k for your spouse.
If you are like me, and misread this part of the program, there is nothing to stop you from running group term life insurance quotes for $750k since they just give you a factor for your age to compute your monthly payments.
That isn’t done on their website but on your own calculator, so you can run a quote for more than the program allows, which creates a false quote.
Compare Apples to Apples to See if You Are Saving
My client is 52 and I ran pilot life insurance quotes using the factors for the level term products for the maximum of $499k.
At his age, $499k of 10 year group term would be $120 a month, and a 20-year term would be $190 a month.
I ran an apples to apples comparison of personal insurance with my best company and I could get the same policies for $99.88 and $174.52 a month respectively.
- $99.88 with Hinerman Group vs. $120 with AOPA
- $174.52 with Hinerman Group vs. $190 with AOPA
That’s several hundred dollars a year in savings, with a policy savings of over $2400 and $3700 over the entire term of the life insurance policy. There doesn’t seem to be a reason to over spend on something that isn’t going to impact the payout for your loved ones and beneficiaries.
I will be the first to admit that the AOPA prices aren’t horrible given my client’s aviation activities, but they certainly aren’t as good as it gets. That’s a small victory for helicopter pilots flying offshore, but the real issue that AOPA is hiding in these group rates is what they offer for plain old private pilots.
- AOPA doesn’t make any underwriting distinction between different aviation activities.
- AOPA would be at the same prices I quoted above ($120 and $190 a month) for an IFR pilot flying 50 hours a year or a CFI or CFII flight instructor.
- My best company would be at $52 for $499k for 10 years and $75.24 for $499k for 20 years. This means that AOPA is ripping off the majority of private pilots when it comes to pilot life insurance.
The Bottom Line
I’ve been serving the life insurance needs of every genre of pilot out there, from student pilots to flight instructors, to private pilots, to commercial airline pilots for the last 18 years and have never lost a case to AOPA.
I’ve ranted for the last 18 years about several large advocacy groups who aren’t doing their members any favors with their life insurance offerings and AOPA is to pilots what AARP is to older folks.
They aren’t your friend and they certainly aren’t earning your life insurance business.
If you have questions or have life insurance through AOPA and would like to know how much better you can do, call or email me directly. My name is Ed Hinerman and would love to speak with you.