If you are employed in the armed forces you will no doubt benefit from the Personal Accident (PAX) cover provided for you by the Ministry of Defence (MOD) which is underwritten by AIG. The cover provided under this policy is second to none; primarily because due to the nature of the job you do, most ‘mainstream’ insurance providers will not insure you for this cover as you are deemed as ‘too high a risk’.
In addition to the PAX cover that you will have, you can also take ‘optional additional units’ to give you an element of life and critical illness cover. These forms of cover, unlike the PAX cover, are not particularly comprehensive. As a firm we have looked in detail at the cover amount and definitions provided for in the cover provided by the MOD and have found these our very limited. For example even with the maximum amount of cover available on these policies you cannot have more than £150,000 of life assurance and £60,000 of critical illness cover. In other words, even in the best case scenario, if you have a mortgage of more than £150,000 you are going to have a shortfall in cover.
Mortgage and Protection Adviser Kelly Brunt, who has been carefully scrutinizing the level of cover provided by the MOD for a client recently, says; “As the daughter of a former Royal Marine who had firsthand experience of trying to claim on the family cover element of the critical illness cover provided by the MOD I sadly know how limited their policies are. There is much more comprehensive cover available privately, even to armed forces personnel, at a similar cost to what it will cost them through work.”
In the majority of cases we believe that forces personnel best course of action is to take the PAX cover on offer through work, but then look into additional private cover for life assurance and critical illness cover by means of a multi-benefit policy rather than taking the cover on offer from the MOD. This even applies if you have ‘specific duties’, such as bomb disposal or if you are classed as Special Forces.
Best of all; a little known fact is that if you are in the armed forces and take private life and/or critical illness cover and have your premium ‘loaded’ as a result of your occupation, the MOD will pay 90% of the loading value. We are able to advise you on the relevant documentation that you need to complete in order to take advantage of this scheme which is then paid to you as a part of your salary.
At One 77 Mortgages we offer a fee free ‘Protection Review Service’ to anyone who would like advice on Protection. We are able to review any existing arrangements a client may have to discover if these are right for them, whether there is a better level of cover out there, and whether any additional cover is advisable which can be done using a multi-benefit policy; a policy that encompasses not just life assurance but additional elements which could include Critical Illness Cover, Family Income Benefit or Income Protection Cover.