American-Amicable Reports Military Allotment Woes

“This good faith gesture has resulted in repeated payouts of death benefits to soldiers who, technically, do not possess life insurance coverage, but are awarded benefits on the basis of a perceived, reasonable intent to obtain coverage,” American-Amicable says.

American-Amicable reports that it already has paid $1.4 million in death benefits to the beneficiaries of 32 service members who have lost their lives in Iraq. Paid military death claims are up more than 60% from the total for the comparable period in 2003, the company says.

Most life insurers exclude coverage for deaths that occur while insureds are in war zones.

American-Amicable notes that it does not include any war clauses in its policies to protect itself against the risk that military personnel will buy coverage before they take war assignments and cancel the coverage once they return safely.