Members of Australia's defence forces often have difficulty getting insurance. Find out what cover options are available.
Members of the Australian Defence Force (ADF) need insurance just like everyone else. The difficulty is that many insurers won’t cover serving defence personnel, even if they only work in an office.
Luckily, there are a number of insurance policies that do not exclude defence personnel and some that have been designed specifically for them.
Why do members of the ADF need insurance?
The Australian government provides compensation and support to ill or injured service members through the Military Rehabilitation and Compensation Act (2014). Forms of compensation under this act include the following:
- Permanent impairment compensation
- Incapacity payments
- Special Rate Disability Pension
- Compensation following death
Despite this compensation, Australian defence personnel should still consider some form of insurance, especially if they have dependent family members, since government compensation is not always sufficient to support a deceased or injured service member’s family. The ADF Financial Services Consumer Centre advises defence personnel that “Insurance should be considered as part of your life’s financial planning, and not just at deployment time.”
What types of life insurance are available for defence personnel?
While there are many life insurance products on the market, they are not all available to serving defence personnel.
Policies available for armed services personnel
- Life insurance. While most life insurance policies contain exclusions for injuries or death in acts of war or terrorism, there are several that don’t include this automatically. Defence employees who don’t have combat roles or any chance of deployment may not need to worry about this exclusion anyway.
- Trauma insurance. Less common for military personnel, trauma insurance covers specific injuries or illnesses. It can cover serious injuries that are more likely to occur during armed service, such as loss of hearing or limbs, burns and disablement.
Policies not available for armed services personnel
- Income protection insurance. This type of insurance is generally not available to service personnel, but if your job is purely office-based you may be eligible.
- Accident cover. Most insurers don’t provide accident cover for defence personnel, although AIG offers a specific accident policy for them.
Which life insurance brands offer specific cover for defence personnel?
Do my cover options depend on my job within the ADF?
There are many different jobs within the ADF and insurers often categorise them differently.
- Navy diver. This is a high-risk position, and few insurers will cover this profession.
- Bomb disposal. This is a high-risk position, and few insurers will cover this profession.
- Armed services, office duties only. Defence members in purely administrative roles may be eligible for more life insurance policies, but again some insurers still class any military job as uninsurable.
- Volunteer reserve. Reservists still face difficulties getting insured and are often not eligible for TPD insurance.
Insurance premiums and high-risk jobs
Some insurers provide cover for the most high-risk defence jobs, such as navy diver or bomb disposal technician, but they charge higher premiums. The ADF will reimburse additional risk insurance costs for defence personnel in high-risk positions up to the value of $2,386 per year.
What risks and injuries do defence personnel face?
It goes without saying that working in the ADF is more dangerous than most jobs. Soldiers on deployment face the serious possibility of death, severe injuries and physical or mental trauma as a result of their experiences.
Due to the nature of their jobs, service personnel face risks of accident and injury even if they never deploy overseas. This includes accidents involving physical training or vehicle-related incidents.
You need to notify your insurer if you are an armed service member and you are being deployed overseas. This can affect your insurance cover. A general rule for any defence personnel is to take out a life insurance policy early in their defence career and well before they are likely to be deployed. This makes it easier to get cover and lock in more affordable premiums.
How can I find the right life insurance policy for me?
To find a life insurance policy that fits your needs, you should consider your personal circumstances, including the following:
- The nature of your job within the armed services
- The amount of compensation you are eligible to receive through the Military Rehabilitation and Compensation Act
- The likelihood of deployment overseas
- Whether you are married and how many dependants you have
- Your family’s financial ability to support itself in the event of your death or disablement
When shopping around for life insurance policies, you should look out for the following features or benefits:
- Family protection. Some policies include benefit payments if your child is diagnosed with a serious illness. You may also be able to extend cover to your spouse.
- Premium options. Life insurance premiums can be either level or stepped. Level premiums are fixed until you reach 65 (unless you increase your sum insured amount). Stepped premiums start out cheaper but rise over time.
- Guaranteed insurability. Check to see if a policy requires medical exams later in life or whether your coverage is guaranteed without one.