Troops 'face injury insurance hike'

The Sunday Times said premiums for the Pax scheme run by insurance giant AIG could reach nearly £1,000 because of higher-than-expected payouts resulting from action in Iraq and Afghanistan.

It said a leaked Ministry of Defence letter showed the cost to some troops could rise 160% and that the maximum premium for soldiers with family plans would reach £972 a year.

Nearly 58,000 members of the armed forces, a third of Britain's troops, have taken out the insurance amid controversy over the levels of MoD compensation.

Following heavy criticism over a series of cases, Defence Secretary Des Browne announced recently that forces personnel will be awarded cash for all the injuries they receive in a single incident - rather than just the three most serious.

The compensation will also be backdated, meaning that soldiers such as Lance Bombardier Ben Parkinson - who was paralysed after being blown up in Afghanistan and received just £152,150 - will benefit.

But his mother said the move was "cheap" and called for the £285,000 maximum limit for lump sum payouts to be raised.

An MoD source confirmed that it was in discussions over the premium levels but pointed out that any rise would be the first since 2003.

Military personnel had a choice of at least four different schemes, the source said, and were under no obligation to take out private cover but were encouraged by the MoD to consider whether the existing cover was enough to meet their and their family's needs.

Shadow defence secretary Liam Fox hit out at the expected rise and said it was a breach of the "covenant" between troops and the state. "They are being asked to put their lives at risk, to ask them to pay to do it is an insult," he said.