Advice need PA/Life Insurance

minimanic

Hi,

I am reviewing cover I currently have with forces financial because of spiralling renewal costs.

The policy covers me for all the normal Personal accident items and includes optional life cover so it pays out on death by accident and natural causes. It is a family policy and also covers me for being in the armed forces should I be deployed and subsequently killed or injured.

Initially i took out the policy due to impending deployment.

Whilst the personal accident cover is useful I am more interested in the life insurance cover and want it to cover me and my family should I be deployed in the future.

I am confused by the multitude of policies available and therefore seeking the advice of the forum members here as to my best approach.

Thanks very much.

stephenni1971

Life cover for the Armed Forces is relatively easy to get, but there can be large differences between individual companies.

Some will offer standard rates if you are not under orders and in 'safe' trade - others will add additional premiums.

Please, please do not use high street banks & building societies and the like for this. I only say it as I have seen some horrific assumptions made and policies that would not pay out for a number of issues because they were written by people with little knowledge of the military.

Allowing for PERSEC, can you say what arm, trade, unit you are?

minimanic

Thanks for your reply, I am in the Army - musician is my trade.

ACG

I can probably guess who your cover is with depending on when you took the policy out. I used to work with their account manager at one life office.

Forces financial thought hard to get a good deal and service from the life offices they used.

As Stephenni has said its not difficult to get life cover if your in the armed forces. A lot depends whether your under orders or not. But it can vary between the insurers on what terms you get offered.

I dont always advise speaking to an Mortgage/Financial advisor but they usually have account managers and can find out what terms you would get offered by a number of companies usually in the same day. It might be best speaking to someone qualified as they will be able to point you in the right direction and save you a lot of time.

weighty1_2

Hi Minimanic,

I initially presumed that you had PAX insurance from the way that you described it, however, after checking out the FF website it looks like they have a similar arrangement but with slightly different benefits. I think it's probably a bespoke plan which is provided through a Lloyds of London syndicate, but that's a bit of a guess.

I deal with a lot of armed forces client and the biggest problem you have is being covered if seriously injured whilst in an active theatre. Life insurance can be arranged without any loadings on the premium (provided you're not currently under orders or on standby) and would still cover you if you died whilst on active operations, however, every single company on the market (barr one) will exclude your occupation from the critical illness cover or already has a War risks exclusion written into the plan, so if you step on an IED and blow your legs off you wouldn't get a payout!

The only company who doesn't do this is Friends Life, however, the premium for a life/critical illness plan would go through the roof. For example say £100,000 life or earlier critical illness cover was costing £25 then this would increase to £125/month! The increase is based on what is called a "per mille" loading. With Friends Life the loading is only for the first 12-months though. After this it would revert to the standard premium.

PAX insurance is difficult to beat for armed forces clients, especially when you add on the optional "natural causes" life cover. The fact that some big payouts can be made for quadraplegia and paraplegia, plus it covering less serious injuries such as shrapnel wounds, burns and broken bones means I often tell my clients to either get some, or leave it in place is they already have it.

disclaimer - obviously, it is all dependent on your personal cricumstances yada yada yada

minimanic

weighty1 wrote: »

Hi Minimanic,

I initially presumed that you had PAX insurance from the way that you described it, however, after checking out the FF website it looks like they have a similar arrangement but with slightly different benefits. I think it's probably a bespoke plan which is provided through a Lloyds of London syndicate, but that's a bit of a guess.

I deal with a lot of armed forces client and the biggest problem you have is being covered if seriously injured whilst in an active theatre. Life insurance can be arranged without any loadings on the premium (provided you're not currently under orders or on standby) and would still cover you if you died whilst on active operations, however, every single company on the market (barr one) will exclude your occupation from the critical illness cover or already has a War risks exclusion written into the plan, so if you step on an IED and blow your legs off you wouldn't get a payout!

The only company who doesn't do this is Friends Life, however, the premium for a life/critical illness plan would go through the roof. For example say £100,000 life or earlier critical illness cover was costing £25 then this would increase to £125/month! The increase is based on what is called a "per mille" loading. With Friends Life the loading is only for the first 12-months though. After this it would revert to the standard premium.

PAX insurance is difficult to beat for armed forces clients, especially when you add on the optional "natural causes" life cover. The fact that some big payouts can be made for quadraplegia and paraplegia, plus it covering less serious injuries such as shrapnel wounds, burns and broken bones means I often tell my clients to either get some, or leave it in place is they already have it.

disclaimer - obviously, it is all dependent on your personal cricumstances yada yada yada

Thanks, the policy I have with FF currently covers the same things PAX does and costs me £96 per month for a payout of 117k on death and various levels for all other injuries.

I was wondering if it would be cheaper to be covered separately for life - say for 200k until say 65-70 years old (currently 38) and then cover personal accident for the day to day - essentially I want to be in a position to help my family if i pop my clogs for whatever reason.

stephenni1971

minimanic wrote: »

Thanks, the policy I have with FF currently covers the same things PAX does and costs me £96 per month for a payout of 117k on death and various levels for all other injuries.

I was wondering if it would be cheaper to be covered separately for life - say for 200k until say 65-70 years old (currently 38) and then cover personal accident for the day to day - essentially I want to be in a position to help my family if i pop my clogs for whatever reason.

The policy you have with FF will absolutely not cover the same things as PAX!

It's easy to get confused!

FF accident cover has much lower payouts based on max cover. I understand what weighty was saying re CIC policies but to be honest CIC is not the right product to use if you are looking personal accident cover.

Life cover - pays on death of insured only

Personal accident - pays out on occurrence one of the specified injuries

CIC - pays out on diagnosis of one of a number of illnesses. A few conditions ( burns , head injury, loss of limbs ) used to be covered for soldiers but as weighty said most have excluded that for new policies.

weighty1_2

Stephenni1971 is absolutely right. If you look at the benefits on a PAX plan they are far higher than with FF. In fact it almost begs the question "why not change to PAX"? I think Stephenni may have misinterpretted what I was saying RE: cic plans, they are not the right type of plans for those looking for personal accident cover, but do cover some catastophic injuries. However, most personal accident plans will payout for things that would NEVER warrant a critical illness claim, such as loss of fingers/toes, less severe burns, gun shots and shrapnel wounds etc.

As per my final statement in my initial response. It's very hard to beat a PAX policy due to the risks faced by armed forces personnel and when comparing PAX and FF, even without looking in any great depth it appears the PAX plan is far better. For example the max Total Permanent Disability payout is £150,000 with FF. If you have 15 units of PAX (which would cost £97.50 on a family plan, including the optional life insurance) you could get a potential payout of £750,000 for quadraplegia or £400,000 for paraplegia...it's a pretty big difference

stephenni1971

Also Forces Financial only pay out 20% of the sum insured if the claim is work related!

minimanic

stephenni1971 wrote: »

Also Forces Financial only pay out 20% of the sum insured if the claim is work related!

I think this is why my policy has more than doubled in the time I have had it. The policy I took out was originally with NAAFI and was underwritten by Norwich Union - there are a number of things that pay out far higher on mine than I can see on the current policies offered by FF - although the max payout on death is lower the individual payouts for certain accidents are a fair bit different - I think it is a policy they would like me to leave.

Saying that - if a policy with PAX can pay out the sums you suggest for £1 more for certain items I think I am crazy to stay on the current policy!

Add that to the fact that when I have requested someone call me to talk through current policies to swap too they have failed to call me 3 times now.

Many thanks everyone for you advice.