Flight Insurance? A Stiff Drink Might Do Instead

Rushing to catch a plane, you pass a come-on for flight insurance. You flash back to recent airplane crashes and wonder, “Should I bite?”

Probably not.

If you’re insurance-savvy, you already have life insurance that will result in payment to your survivors. If you are on a business trip, you may be covered by your company’s policy.

Or if, like the vast majority of travelers, you charged your ticket on a major credit card, chances are high that the card automatically provides coverage.

Even if you aren’t otherwise covered, paying extra for flight insurance doesn’t make sense, says Joseph Belth, professor emeritus of insurance at Indiana University and a longtime critic of the industry.

“A person should buy life insurance that will pay out no matter what his cause of death,” Belth said. Flight insurance might give a “white-knuckle flier” that extra measure of confidence, “but you could get the same feeling out of drinking some booze on the plane.”

The risk also makes the purchase questionable. Chances of dying in an airline crash are about one in 3 million.

Nevertheless, people continue to buy the policies.

Public interest in insurance is typically heightened after a big crash. Mutual of Omaha has seen a 5% increase in sales since a ValuJet flight crashed May 11 in the Florida Everglades and a TWA jet exploded July 17 off Long Island, said Holly Richmond, an executive at a subsidiary that handles policies sold at airports.

Inquiries by MasterCard cardholders have gone up 15% to 20%, and American Express Corp. has had a 5% increase, spokespersons at those companies said.

Airport sales were nearly killed off as credit card issuers began automatically writing the policies for airline tickets purchased with plastic and travel agents began selling it as part of a policy that covers lost luggage, trip cancellation or illness on the road.

But Mutual of Omaha, the leading provider of accidental death and dismemberment insurance at airports, said there is a small but lively market for the over-the-counter product.

Its Tele-Trip Co. subsidiary writes about 100,000 policies a year at 90 airports throughout the U.S. and seven in Canada.

Competition has driven down the price of flight insurance. Tele-Trip sells $500,000 worth of coverage for $16.65, $200,000 for $6.65 and $100,000 for $3.75.

Modern fliers, of course, board airplanes every day without a thought that they might never land. But for people who worry about it, Marty Salfen, a senior vice president at the International Airline Passengers Assn., recommends flight insurance as cheap peace of mind.

“Just make sure that if you buy flight insurance on a per-flight basis, tell someone,” Salfen said. Insurance companies don’t always contact the beneficiaries to tell them they are due settlements. They “wait for somebody to call them.”