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IFAs call for centralised cover for armed forces

Front-line soldiers in the Middle East will find out this week they have been refused life insurance by AIG, the Ministry of Defence&#39s appointed prov-ider, prompting IFA calls for centralised underwriting.

The news comes as Britain&#39s leading life insurance companies confirmed they would not take new life business from troops already on a war footing in high-risk locations.

Norwich Union says mortgage-related life cover will continue as before but new life cover applications will be put on hold. Standard Life says its criteria remain unchanged but it will not offer cover to military staff in high-risk areas.

The MoD had been recommending that military personnel take additional life cover through a scheme called Personal Accident Cover underwritten by AIG. But following a flood of applications for life cover by servicemen and women after the attacks on the US on September 11, AIG pulled the plug on the cover on September 21, leaving around 200 applications unaccepted. These troops will be notified by the MoD.

IFAs say they understand no single firm should bear all the risk but the inability of life firms to offer cover to troops will embarrass the industry.

Wentworth Rose managing director Philip Rose, a former army officer, says: “Companies have got to make a commercial decision but what are the services to do? There should be some form of central underwriting of soldiers&#39 life cover as a patriotic act by the industry.”

A spokeswoman for the MoD says: “It is obviously not an ideal situation.”

Plymouth IFA Tim Smale of Jack Lawrence Financial Services, who has advised members of the services, says: “Why the MoD can&#39t arrange some deal with a large insurance company I don&#39t know. These soldiers are doing a bloody hard job and people round here will remember this.”

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