Sources in the insurance industry and the Army said many servicemen and women are buying policies to boost Ministry of Defence compensation pay-outs.

Firms are advertising policies on the internet, and one, Abacus, offers a special online application form for servicemen and women.

Conservative MP Keith Simpson, who represents Mid Norfolk, said many people would be surprised.

"I think they would be," he said. "It reinforces the impression that many people have that a duty of care is not being given."

He added: "The question you have to ask is this because soldiers feel that Government compensation offered is not enough. You also wonder what the premiums must be."

In November, a report leaked to a newspaper said soldiers could pay nearly £1,000 a year for policies.

Abacus offers kit, accident and life policies to soldiers and said it has started to offer a "free Armed Forces will".

Army sources said there were a number of cases where injured soldiers are in dispute with insurance firms over pay-outs.

One, Private Simon Peacock, 22, of Basildon, Essex, is arguing for more after being hit by shrapnel while serving in Afghanistan with the Royal Anglian Regiment.