Home Insurance for Pilots

[Skipper]

Hey folks,

I'm about to become a new homeowner and I'm looking into death and disability insurance that will cover the mortgage if one of us makes an early exit. Does anyone know of any good insurance companies that don't try as hard to cash in on the myth of aviation being a dangerous field of employment?

Thanks!

[pointyertoes]

Hey there, My wife and I bought a house last year and got life insurance from State Farm. They did care that I was a pilot but it made no difference on the premium, (I had to specify that I was a professional pilot and state approxiamately how much I flew per year, that seemed to satisfy them that I was low risk). If you are a low time private pilot who has just taken up aerobatics, there may be some challenges.
They took the health stuff way more seriously. They sent a private nurse to the house to do an exam and draw blood.
..so now were covered if one of us checks out early.

[husky]

Unless you fly for AC or Westjet, I'd hardly say it's a myth that being a pilot is unsafe.

[TG]

Just go with: Professional Pilot Insurance Plan

http://www.ppip.ca/

I took a simple life insurance of 100,000$ with the idea that it will cover my mortgage "in case of"
Much cheaper than any mortgage life insurance offered by banks

[bohica]

I opted outta the house insurance cuz its bullshit. You pay the same rate even as your mortgage decreases.

Instead, I have lots of personal death insurance for wife and I through PPIP.ca. Go and get life insurance from some insurer other than the bank and make sure it pays your mortgage should one of you die and then some.

Just the way i see it thru these Kokanee glazed eyes.

[bohica]

TG, good timing on post, it looks like we are plugging Bruce and PPIP. I guess we are but in that respect I'd like to challenge anyone to find a better rate and if Bruce can't match it then I'll move.

I suspect PPIP will be taking my minimal monthly payment for a long while as it is very VERY competitive.

Now if Kokanee had a life insurance policy for every beer you bought........

[RatherBeFlying]

Insurance sold by lenders is extremely profitable. You will get much better rates from a life insurance company. Some insure pilots at standard rates; so, look around.

If you have kids you will need considerably more insurance than just enough to cover the mortgage.

Take out a term policy to when the kids are 25 with enough for the kids' post-secondary education.

Insure the wife too. Childcare is expensive. A mother of teenagers was lost in a glider acident last year and a few more were lost driving while talking on a cellphone.

[Jaques Strappe]

I have never had a problem with insurance because being a pilot was deemed dangerous. I would say they would have a hard time holding to that in court when flying has been proven to be statistically safer than driving. The clause you may want to pay attention to is the one regarding how long you can leave your house unattended before the coverage becomes void. Some are as low as 48 hours. If you will be on the road at all, look closely at this.

Another issue to look at if buying disability or mortgage insurance ( which is a crock ) is the fact that many companies require that you work a minimum of a 40 hour work week. Anything less than that is considered a part time job by some and changes your policy completely. I had issues with several companies when I tried to explain that I have a full time job but do not work a 40 hour work week. They did not get this concept at all and I did not buy their policy.

My advice, read the fine print and like others have said, get a life insurance policy to cover your mortgage.

[Dash-Ate]

Who can afford a home!?

[TG]

The wife

[bohica]

My kids

[Crackberry]

SunLife standard rating don't accept anything less. May take more effort but you can get it. SunLife seems to be most aviation friendly of the bunch. I too had problems getting it London Life was trying to rob me with a non standard rating 2.5 times the normal.

CB

[FastFlyBy]

The reason the rate on your mortgage insurance does not decrease as your mortgage itself decreases is because it's a "level rate policy" which means that you pay less in the beginning and more at the end than you would with a "decreasing rate policy".

I totally agree, however, that mortgage insurance is wrong. Watch this if you don't understand why http://www.cbc.ca/mrl3/8752/marketplace/in_denial.wmv.

Much better to have a life insurance policy big enough that it covers everything. Your mortgage and any other debts, plus funeral cost and any other expenses like probate fees. Its also good to have enough to cover your lost income to help your surviving spouse and dependents.

$100,000 is better than nothing though.

[groundtoflightdeck]

If you put down less than 25 or 30% of your home equity (can't remember which) then you are required to purchase default insurance from CMHC or GE. This insurance package protects the bank in the event you default and the bank can't recoup all the money owed. It also pays out the mortgage in the event of the death of one of the people on the mortgage- so you might already have it!

Cheers.

[sarg]

If you put down less than 25 or 30% of your home equity (can't remember which) then you are required to purchase default insurance from CMHC or GE. This insurance package protects the bank in the event you default and the bank can't recoup all the money owed. It also pays out the mortgage in the event of the death of one of the people on the mortgage- so you might already have it!

Cheers.

Not true I put 5% down on the previous house and 20% on the current house. I opted not to take life insurance offered on either thru the bank, cheaper to get elsewere. The insurance you are required to get with a low equity mortgage is just that mortgage insurance, to cover the costs if you default on your payments and the bank has to foreclose on your house.

Bruce offers a great product at a great price. Last I looked though it was limited to pilots with ATPL's and limited to $300K. Depending on your circumstances that may not be enough to proved for your family unless you spouse is well payed in their job. If you used half the life insurance to pay of the house and invest the rest at 7% your gross is $12,250/yr. After tax that might cover daycare for 2 kids for a 9-5 job. The rest of cost of living to be covered by the remaining wage earner. And do not cheap out on the issurance for your non-flying spouse if they are the low income earner. Think of the changes you need to make to keep your flying career on track if they die. Most pilots do not work a 9-5 job so daycare is expensive, if you can get it. Most likely your looking for a nanny $24K +/yr.

I have extra life insurance with RBC, underwriter is some one else, at a competive rate. Expect to fill out some extra paper work on the type of flying that you do and be honest about, the last think you want is payment refused because you misrepresented yourself to the insurance company. My policy places no premimum on being a pilot due to type of flying. If you fly for Conair or VAL in the Sudan expect to pay extra for the coverage. Contact a couple of insurance brokers to get you quotes. Before for signing ask to see the policies or at least the exclusions before paying. Consider your term as well, flying for VAL in the Sudan but planning on moving to AC or WJ in the next few years. Ask if new rates can be worked out if the type of flying changes or consider a shorter term like 5 years then renew. The lower "risk" flying likely more than cover the cost of being older when you re-apply.

[groundtoflightdeck]

Yeah its not attached to the RBC Insurance that deals with some other situations but if you put down 5% you most certainly got your default insurance from CMHC and they will pay your mortgage out if one of the mortgage owners dies. Lets hope not to use that feature, but goo to know its there!

Cheers

[lilfssister]

I think you should research CMHC insurance a bit more. From their website http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_010.cfm

What is CMHC Mortgage Loan Insurance?
Mortgage loan insurance is typically required by lenders when homebuyers make a downpayment of less than 20% of the purchase price. Mortgage loan insurance helps protects lenders against mortgage default, and enables consumers to purchase homes with little or no downpayment — with interest rates comparable to those with a 20% downpayment.

As with any insurance, there are insurance premiums to be paid. The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan.

Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

[flyinggirl]

My husband and I both hold ATPL's, and we got the max from PPIP. No medical required, based on your aviation medical. I die, he gets 300k, he dies, I get 300k, monthly payments $30 each, cheaper than bank mortgage insurance - yet can cover the mortgage for each other.
If you watched the video link from a few posts above, you will learn - as I did - that bank mortgage insurance is NOT what we all assume it is. Term insurance seems the way to go.
my .02

[sarg]

groundtoflightdeck you seem to be confused as to what the CHMC or GE insurance is. You should look at the link that lilfssister provided as I was to lazy to post it, needless to say if you or your family is using the insurance provided by CHMC it is a sad day because you're getting kicked out of your house.

I know that both RBC Insurance and Sunlife have free life insurance calculators on their websites and I'm sure most others do as well. Anyone considering life insurance should go use one of them. You can enter your circumstances in and they will recommend a dollar figure for your insurance requirements, you might be suprised at the number. Young couple both working good paying jobs, no kids, good life insurance through work, you might require little or no extra insurance. Couple in thier mid 30's, 2 young kids, need replacement income and a college fund you could need in excess of $1 million in total life insurance.