Hi there. I am Missus ProStu. I work in insurance but must give the caveat that I'm not licensed to advise on this professionally!
Right, I shopped around for ours. I found that Norwich Union's Life and Critical Illness policies were reinsured by GE. Basically it works like this. Normal insurance office gives policies, but they lay off their risk to bigger pools of risks run by companies called reassurers. It's the reassurers who take the lions share of the risk and it's them that work out the "statistical risk" and drive the terms/ratings offered? I found out that GE had the philosophy that they didn't feel that rotary aircrew needed rating as there "hadn't been any crashes for years". Not exactly true but I wasn't going to argue with them. Hence we got life and critical cover with just an amendment to the "total permanent disability" part of the cover. If you're aircrew you'll always have that TPD part amended so it looked like a good deal. We did it through Tesco but I think NU have stopped underwriting Tesco's cover. Might be worth getting a broker to speak to NU though to find out if that is still their philosophy if you're a rotary mate.
Aircrew-wise generally though you can indeed claim 90% of any rating you have had applied directly due to your job (only aircrew, divers and bomb disposal though I think, so this doesn't apply to everyone). You would normally stump up the premium up front and once a year (ie in arrears) you apply through your pay office to get 90% of your year's extra premiums back?
Naafi are pretty clued up and I think they have tie ups with the best of the companies out there, plus they're clued up on military matters so they have seemed ok from anecdotal evidence from friends. I would steer clear of the small sum assured death benefit policies that the training establishments offer you on joining up though as they're usually massively more expensive than you can get on the high street. I believe the MOD are looking into this and will review their recommendations.
One thing I would say is use caution if you're going for critical illness cover on a reviewable premium basis? This means you have a fixed premium for 5 years but it can go orbital after that. I would only ever purchase guaranteed rate products as although they're more expensive they will gradually become comparatively less as inflation runs it down over the years and you'll get no surprises over what you're paying.
I was chatting to an aircrew chap the other day and he was only going to cover himself due to cost. I did point out that it was a good idea to cover his spouse as even if people would rally round it's still very useful to have a lump sum there to pay for nannies and stuff if the missus wasn't around any longer. Plus if you pay for life cover only then the cover is as cheap as chips these days. For £15pm you could normally get a nice sum. If you're healthy then it's worth keeping an eye on what you're paying as Term Assurance is the one place in insurance where the prices have been dropping year on year.
I'm not a broker and can't give what the regulators call "best advice" on insurance sales, but I know my stuff and if anyone wants something explained in plain English I'll do my best to help (just PM to ProStu).
(The value of your house may go up as well as down. Your house is at risk if you do not keep up repayments on loans secured against it, bla bla bla) 