Policy jeopardy: British soldiers fighting in Iraq or military news Afghanistan tend to take out the maximum possible cover
British soldiers have expressed alarm that a scheme to insure them on the battlefield could have been put in serious jeopardy if the US insurance giant AIG had collapsed last week.
Most members of the armed forces top up inadequate Government compensation by joining the recommended private scheme PAX, which is underwritten by AIG.
Soldiers fighting in Iraq or Afghanistan tend to take out the maximum cover possible to double the money that will be paid out to them if they are wounded, or to their families if they are killed.
With high casualty rates – almost 200 servicemen or women have been killed in the two conflicts – many millions of pounds have already been claimed.
The British arm of AIG that operates PAX insisted yesterday it would have been able to meet its obligations if its troubled parent company had folded.
But at the height of the crisis, servicemen and women were expressing their fears on unofficial websites.
One anonymous posting on the British Army Rumour Service website was headed Are Our PAX Policies In Safe Hands?
It read: ‘PAX is underwritten by AIG. Looking at this, I’m not sure they have much of a future. Just have to keep breathing then.’
The Ministry of Defence admitted yesterday that it had been so concerned about the situation it had sought assurances the scheme would continue if AIG collapsed.
PAX is not the only policy available, but it is used by the overwhelming majority of personnel because it has MoD approval.
Soldiers can buy up to 15 units of insurance at £2.75 a month each – and most about to be deployed to combat zones buy all 15.
This would pay about £150,000 to their dependants if they were killed and as much as £750,000 if they were wounded and needed lifelong care.