Definition of Loss of License Insurance

Loss of License insurance provides coverage to pilots who can no longer fly.

According to the Air Line Pilots Association, a union for airline pilots, as many as 30 percent of pilots may be grounded for medical reasons at some point during their career. Loss of License insurance provides benefits to pilots if they no longer are medically cleared to fly.

Function

Loss of License coverage will pay benefits if a pilot is no longer able or permitted to fly due to a specified medical condition. For example, a pilot who develops diabetes may no longer be flight-eligible due to the need to take insulin.

Types

Loss of License coverage typically is paid as either a lump some or as a monthly benefit. According to ALPA, a lump sum may be chosen by a pilot who will no longer fly but may wish to enter into some form of business venture. A monthly payment may be the choice of a pilot who believes her condition is only temporary and may be able to fly again at some point.

Benefits

It is possible that a pilot's medical condition might preclude him from flying, but not from performing other types of work. As long as the pilot loses medical certification to fly, he would still receive Loss of License benefits even if he is capable of performing other work.

References

• Air Line Pilots Association: ALPA Insurance