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Life Insurance

Volume 546: debated on Monday 11 June 2012

The Ministry of Defence provides pensions and compensation for personnel injured due to service, and benefits for the dependants of those whose death is due to service, through the armed forces pension schemes and armed forces compensation scheme. However, we also have a duty of care to ensure that personal accident and life insurance cover is available to those service personnel who consider they require it. This cover is voluntary and separate from the benefits provided by the Government. The Ministry of Defence arranges personal accident and life insurance cover through the PAX and service life insurance schemes provided through Aon Ltd and the Sterling Insurance Group respectively.

I think most military families will not be entirely happy with the Minister’s answer. How much would it cost to provide fully funded—100%—state-funded insurance to all those on the front line, and will he and his Department consider doing that?

In a sense, we already provide cover for those on the front line in the matter I have described—through the armed forces compensation scheme and the armed forces pension schemes—so that anyone who suffers in consequence of their military service is compensated appropriately. The hon. Lady will be aware that, after the previous Government ordered an independent review of the armed forces compensation scheme, the amounts payable were substantially increased. If members of the armed services decide, for personal reasons, that they want to seek cover additional to that, we are determined to ensure that they are not disadvantaged or prevented from doing so on account of their service in the armed forces. That is why we intervened in the market to ensure that the schemes I mentioned are available, but it would not be right for us to go out and procure those policies on behalf of individuals: these are personal decisions that those individuals make. We provide death-in-service and injury-in-service benefits; it is up to—

Order. Minister of State, I think there is extensive scope for an Adjournment debate on the matter.

I will not start an Adjournment debate on the matter, Mr Speaker, but the armed forces compensation scheme, although first class, does not go quite far enough. It was recently reported that as many as 50 soldiers killed on the front line in Afghanistan had no private life insurance at all. Could not the MOD do more both to encourage and to facilitate the provision of private life insurance to everyone on active service in Afghanistan?

We do encourage individuals to take out additional cover, but people’s circumstances will vary enormously in terms of mortgage liabilities, the size of their family or anything else they wish to cover for. We heavily subsidise these schemes while people are on active service in Afghanistan, but it would not be right for the state to assume responsibility for this and take it over completely.