Is Flight Insurance, Life Insurance?

Is flight accident insurance really life insurance? From time to time that question comes up. Usually it comes from a traveler who is not in the insurance business and who makes the assumption that because the flight accident insurance pays a benefit based on the death of the insured that it’s a form of Life insurance. Every once in awhile it comes from a source that should know better.

The answer is no, flight accident insurance is not Life Insurance! It’s a form of accident insurance that will pay a lump sum benefit (principal sum) to a beneficiary in the event that the insured dies as a direct result of an accident that causes bodily injury while they are riding as a passenger, or boarding or alighting from an licensed, scheduled airline.

While Life insurance will do the same thing it is much broader that Flight accident. It will pay a benefit – the amount insured – to a beneficiary in the event of the insureds death, even if the death were due to a heart attack. The death does not have to be caused by an accident in order for coverage to apply.

Isn’t it all the same thing? No, insurance is a highly regulated form of commerce and there is a distinct difference between the two types of insurance. As a matter of fact the various State Insurance Departments that regulate insurance even require different licenses to sell them; travel accident for the flight insurance and life insurance for the life insurance. States can be very sensitive about the difference and in some cases will hold agents in violation of advertising laws if they call flight insurance, life insurance. This writer knows of several cases where agents were required to pay fines for violating State advertising laws because they made the mistake of calling it Life Insurance.

So is Flight Insurance, Life Insurance? NO!

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