British Friendly Income Protection for Pilots

We are seeing more and more enquiries for pilots wanting income protection. There is quite a lot to know about how this type of insurance mixes with pilots. British Friendly are currently the stand out insurer for most pilots that we do arrange cover for, as the quality of their contract and the price are the best.

British Friendly income protection for pilots isn’t available direct to consumers, so you do need to use an adviser like ourselves to set the policy up for you.

The Best Insurer for Pilots Income Protection

There are three insurers in the UK that currently offer income protection for pilots: British Friendly, Holloway Friendly and LV=.  Each insurers offer competitive policies for pilots and it’s impossible to say which one is going to be best for you, without chatting about your personal circumstances. That being said, our recent research has shown that British Friendly usually offers far cheaper premiums than LV=. The British Friendly income protection policy can also last until age 65, and the Holloway Friendly one ends at age 60.

If you are a test pilot or military pilot your options for income protection will be quite different to what we are discussing in this blog. This blog is focused towards commercial pilots.

British Friendly Income Protection for Pilots

British Friendly is a mutual society and that means that you get access to a number of benefits by using them. British Friendly currently offer their policyholders:

• Unlimited digital GP consultations – 24 hours a day, 7 days a week, 365 days of the year, accessible worldwide
• 6 physiotherapy sessions per year
• 6 mental health support services per year
• 2 second medical opinion services per year
• 1 self-administered health check per year
• The chance to win £100 each month in their prize draw

You can access these through an app on your phone, making these services as easy as possible to use.

What will income protection do for pilots?

We know that as a pilot you must be in peak health to be able to do your job. You hold incredible responsibility for the safety of thousands of people each year and it doesn’t take much for your health to change and you be told that you can’t actively fly anymore. 

Here is how income protection gives you peace of mind for your financial future:

• This policy will often pay up to 70% of your gross income if you are unable to work due to ill health
• You can choose to have the claim pay you an income anywhere from 1 year right up to your retirement age
• You can set the policy to end when you intend to retire up to the age of 70

Income protection can be quite flexible with the way that you set up the premiums too.You can often choose between a guaranteed premium or what is known as an age-costed premium. Without going into too much jargon (hopefully), a guaranteed premium stays the same throughout the whole policy, it is usually more expensive at the start but ends up being far cheaper in the long run.

An age-costed premium will be cheaper and more attractive when you look at it, but do be prepared that the premiums will increase each year as you get older. This route might work for you but it will typically be far more expensive over time. When you get your quotation for income protection ask for the total premiums paid over the policy, for both types of premium. The difference in the premiums can be £10,000s!

What things won’t income protection do for pilots?

Income protection is designed to pay out if you are unable to work due to ill health, it is not redundancy cover. Redundancy, or unemployment cover, is a completely different insurance policy and one of our advisers can talk about the difference with you.

It’s also not loss of licence insurance.  Whilst there are similarities, loss of licence cover tends to include a lump sum benefit if your licence is permanently revoked but income protection doesn’t do this. 

Income protection instead provides a monthly payout, but without an overall cap (which often applies to loss of licence cover).  Income protection can also be available with fixed premiums, so you don’t face the inevitability of prices increasing every year – this is one of the main reasons why pilots may prefer income protection.

Extra quirks

Income protection policies are setup with a deferred period. This is the amount of time that you must be ill and unable to work before the financial part of the insurance kicks in to support you.

This can be tricky for pilots.

Let’s say a pilot has full sick pay for 3 months. That works really well with income protection as we can set a 3 month deferred period that compliments the sick pay. The reason that this is good is because you cannot claim on the income protection policy while you receive full sick pay.

But, some pilots get 5 years sick pay. This is a great employment benefit, however it can cause some confusion with income protection. You see the maximum deferred period for income protection policies is 12 months. This means that you will be paying a premium to access the income protection after 12 months, but, you cannot claim on it until your 5 years of sick pay has stopped with your employer.

This is going to sound frustrating, possibly a bit bizarre, but it is the way that the income protection policies work. Even though there is this crossover and you are paying extra for something that you can’t access, the long term financial benefits of having income protection far outweigh not having it. As a pilot you are likely earning a very nice income and the financial shock if you lose this and have no income protection in place can be quite hard to deal with.

A lot of people think that income protection is going to be far more expensive than it is. Our advisers are here to give you a no obligation quotation so that you can make an informed decision about your financial planning.

Get in touch with us today.

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