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Life Insurance for Tps on Ops - Good News

#1
There's every chance this is already widely known about, but since I couldn't find an on-line version of this May 13 2007 Sunday Telegraph report, I thought I'd post it here anyway.

Finally, Our Troops Can Take Cover

Six years ago this paper exposed the difficulties faced by armed service personnel in insuring their lives, but now the Ministry of Defence has done the right thing. Paul Farrow reports The Ministry of Defence has finally come to the rescue of the armed forces who are finding it difficult to insure their lives.

Most major insurers balk at offering armed personnel life cover during times of conflict Some close their schemes to new applicants, others increase premiums or exclude benefits for chemica1, biological, radiological or nuclear weapons.

For example, Prudential has refused life insurance to all members of the Armed Forces, regardless of whether or not they are to be deployed overseas. Others, such as Friends Provident, have denied cover to members who may he put on standby at a later date.

But the new cover Service Life Insurance gives life insurance cover for war and terrorism risks including chemical and biological attack. Crucially, it guarantees to accept applications, even when applicants are on operations or under orders to deploy, while "high risk" military trades, including Special Forces and bomb disposal, will not have to pay higher premiums. No medicals are required.

Launching the product, Armed Forces minister Adam Ingram, says: "The Service Life Insurance scheme is designed to complement and reinforce our existing schemes. It gives our personnel the option to take out life insurance cover that is tailor-made to ret led the unique nature of what they do. (over is available to each and every serviceman or woman across every unit, ship or regiment at every stage of their career. Whatever the job, wherever they are." Tory MP and former military officer Patrick Mercer says: "At last we have something that will work.

But why on earth has it taken so long? We are at war on two fronts and these issues should have been addressed years ago." Premiums start at £5 a month for around £60,000 of cover with policies not excluding death as a result of chemical, biological radiological or nuclear attack. The MoD says the premiums have been kept down to similar levels paid by civilians, although this has been disputed by Lifesearch. the life insurance broker.

It says policies will be double the ~ of traditional life cover. For example, a 30- year-old non- smoker insured for £150,000 over 25 years would pay £17.42 a month with the MOD policy compared to £9.80 with a traditional insurer. The same cover for a 30-year- old female would cost £20.48 with Service Life and £10.20 with a conventional policy.

Kevin Carr, head of protection at Lifesearch, says the extra cost is acceptable and that the much-needed new cover fills a gap because mainstream insurers will "flatly decline personnel" about to go to war. Sometimes even mortgage-related cover has been declined, he says.

The only downside is that cover is limited to £200,000 which could provide a problem on mortgage-related business given current house prices." He suggests other service personnel who an not risk would be better 1F with a policy from a traditional life insurer because the premiums will lit' half the price.

The Association of British Insurers (ABI) insists that service personnel have always been able to buy life and protection insurance, and says that "tens of thousands already have policies". However, Nick Starling, director of general insurance and health at the ABI, says: "`There will be difficulties in obtaining cover for the first time when applicants have already been placed under readiness hr operational deployments." The Sunday Telegraph revealed in October2001 that even the MoD's scheme underwritten by PAIS. the Pension Annuity Friendly Society, was rejecting all applications from members of the Armed Forces to its life insurance and personal accident scheme because of the imminence of military action.

In January 2003, we revealed that Norwich Union would no longer sell life insurance to members of the Armed Forces who may be fighting a war in Iraq. Other insurers soon followed suit Today Norwich Union says it will ask applicants if they are about to go into conflict and if so, the decision is "postponed until they return". If the answer is no, it will accept the application which will then be valid even if the policyholder is sent to conflict years down the line. It says 99 per cent of mortgage life insurance applicants will get cover, even if they are being sent to an area of conflict, but it admits its critical illness benefit does have a war-risk exclusion clause. In the overwhelming majority of cases, the war risk exclusion clause will not affect critical illness policy holders.

But if an individual is directly involved in the war against terrorism as a member of the Armed Forces or of the media reporting on the conflict and is harmed while in a recognised war zone or area of conflict, the exclusion clause will apply," says an NU spokesman.

Prudential says forces personnel under orders or serving in areas of conflict would not be considered for life insurance with Prudential.

"We would consider quoting terms for policies linked to mortgages, but this would be dependent on individual circumstances," says a spokesman. "Existing policies would be valid for personnel deployed now, but some policies may have exclusions, which menus claims which resulted from an incident in an area of conflict would not be considered."
 

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