Insurance limits 'slap in face' for NZ military

By Mathew Dearrnaley

defence reporter

New Zealand troops, including those in East Timor, have had a cap imposed on life insurance, but the Defence Force insists that any bereaved families will be well provided for.

The force has decided to put a ceiling of $200,000 on an underwriting liability it accepts for private life policies that might fall foul of insurance company exclusion clauses for active military service.

Cables to troops and naval crews involved in the Timor force have also advised them that mortgage insurance repayments will be capped at a maximum of $150,000.

One such cable sent to the tanker HMNZS Endeavour was relayed to the New Zealand Herald yesterday by an anonymous source, who wrote that the caps were a "great slap in the face."

Defence Force personnel chief Air Commodore Bruce Ferguson confirmed last night that there had been no underwriting limit before the Timor crisis but listed a range of other benefits for troops in the field.

These included full work accident insurance cover, superannuation payouts to families of anyone killed on service of $100,000 or four years' salary, whichever was greater, and weekly pension payments to surviving spouses.

Air Commodore Ferguson acknowledged that the decision to limit the Defence Force's insurance liability was made because of the large number of personnel to be committed to Timor.

But he said it was a major step forward for the Government to have extended eligibility for war pensions, without prompting, to troops who might be disabled in a peacemaking operation as opposed to war.

To call the insurance decision a slap in the face was unfair and unfounded, he said.

Word of the insurance caps comes as the Government considers Defence Force recommendations for increasing operational allowances, which are lagging well behind those paid to Australian troops in East Timor.

The force announced a review of allowances after discovering a wide gap between a daily semi-taxed $41.60c paid to New Zealand armed forces in Timor and a tax-free $A125 ($158) for Australians.

A spokesman for Defence Minister Max Bradford said the minister referred recommendations to the cabinet on Monday but the matter remained under review.

New Zealand First MP and former peacekeeping soldier Ron Mark said he had yet to study details of the insurance caps, but such developments highlighted a need for an association to protect the interests of members of the armed services.