Insurers are closing their books to Armed Forces
Members of the Armed Forces are finding it difficult to get life cover as more insurers close their book to new business in the wake of growing military action in Afghanistan.
AIG, one of the life offices previously recommended by the Ministry of Defence (MoD) for military cover, is now refusing new applications from the Armed Forces. Other insurers such as Legal & General (L&G) and Norwich Union (NU) are also turning away new applications.
MoD spokesperson Paul Sykes said the move meant that soldiers no longer held the right to choose extra cover. 'MoD schemes cover members of the Armed Forces if they are killed or injured while on duty, but many people decide to get extra cover and this is something we have been trying to facilitate. With more insurers such as AIG refusing new cover, they no longer get that choice.'
Russ Whitworth, chief underwriter at L&G, said that no promises could be made about lifting the ban on new applications. 'The risk is still very difficult to quantify. If we move towards long-term deployment of Armed Forces in Afghanistan, we may be able to offer rated terms, but it is impossible to say at the moment.'
NU is also refusing new cover from soldiers under orders, unless the policy is tied to a mortgage. Tony Jupp, chief underwriter at Norwich Union, said. 'We are trying to be as fair as possible and not have a knee jerk reaction, but it is an abstract risk. We will consider the situation as it develops and take appropriate action as we feel the need.'
Scottish Provident is one of the few providers that is still offering new policies disconnected with a mortgage, but cover is capped at £1,500. 'If they are in a war zone, or under orders to go to one, we view it in the same way as other riskier occupations, so the premium may be higher, but we will provide cover,' said Claire Williams, product manager a Scottish Provident.
Scottish Widows is, however, accepting new applications with normal terms. Paula Hunter, spokesperson for Scottish Widows, said: 'Our position remains unchanged, we are providing the same terms and accepting new policies as we always have for members of the Armed Forces.'
