Life insurance for serving personnel and service leavers

What you actually have while serving

The Armed Forces Pension Scheme provides a death-in-service lump sum — under AFPS 15 this is four times pensionable pay — alongside dependants' pensions. It is a genuinely valuable benefit and it costs you nothing directly.

It also stops entirely on discharge. There is no conversion right, no continuation option and no grace period. Everything the scheme provided ends with your service, and the family that has been protected for years is suddenly not.

Separately, personal accident schemes available to serving personnel cover injury and death, including in circumstances many civilian policies exclude. These are worth holding but are not a substitute for life insurance: the cover is narrower and it too generally ends when you leave.

Arrange civilian cover before you leave, not after

The best time to put personal life insurance in place is while you are still serving. You are typically younger, you have been medically screened throughout your career, and you have a documented health record — all of which help.

Waiting until after discharge is where problems appear. Resettlement is stressful, budgets are tight, and cover slides down the list. In the meantime, the injuries, hearing loss, joint problems and mental health difficulties that service can leave behind become disclosable conditions on an application. Cover arranged at 28 while serving is priced very differently from the same cover arranged at 34 with a service-related back injury on record.

The exclusions to read carefully

Many insurers will cover serving personnel, but terms vary far more than in civilian occupations. The exclusion to look for is war and civil commotion — sometimes extended to terrorism or to active deployment in a specified theatre. Its effect is that a death arising from those circumstances is not covered.

That is not automatically a reason to reject a policy. For a technician, medic or someone in a trade role who is unlikely to deploy in a combat capacity, an exclusion may cost very little in practice. For infantry or personnel on operational rotation it is a significant limitation, and there are insurers who take a more accommodating view.

Some policies also treat hazardous activity as an exclusion — parachuting, diving, mountaineering — which for certain roles is not a hobby but the job. Occupation and role need declaring properly.

Income protection and the transition to civilian work

Once you are in civilian employment, income protection becomes the more likely claim. Service leavers frequently move into construction, security, logistics, engineering or the emergency services — occupations where physical capability is the income, and where insurers price the risk carefully.

If you are moving into self-employment or contracting, there is no sick pay behind you at all. That is the point at which day-one or short-wait cover earns its keep.