Insurance premiums are set to increase from 21 December 2012 following changes to the EU Gender Directive.
Traditionally, the basic premiums for life cover have been cheaper for women than men, as studies show women tend to live longer. Conversely men have paid less than women for income protection (also known as permanent health insurance).
Gender neutral pricing will mean the standard, pre underwriting rates applied to women for life cover will be increased to match those used for men, and vice versa for income protection. There is, however, a possibility in a reduction in cost to women’s income protection rates.
In order to illustrate the current pricing difference, please see below:
Based upon level life cover, £100,000 sum assured, 20 year term
| Male, age attained 40, non smoker | £10.20 per month |
| Female, age attained 40, non smoker | £ 8.20 per month |
Based upon income protection, £20,000 benefit per annum, to age 65, 6 month deferred period
| Male, age attained 40, Managing Director, non smoker | £34.78 per month |
| Female, age attained 40, Managing Director, non smoker | £59.95 per month |
All contracts effected after 20 December 2012 will use gender neutral pricing.
If you are considering rebroking your existing protection contracts, taking out additional cover or expect to require cover in the near future (e.g. house purchase, marriage, birth of a child, IHT planning) please contact us now.
If you have an existing reviewable contract it is likely the gender neutral pricing will apply at the next review. If you would like to receive quotes on guaranteed rates, do not hesitate to contact us.
Existing contracts with guaranteed rates will not be affected by these changes and will continue at the current premium level until expiry.
In order to benefit from the current gender specific premiums, contracts must be completed by 20 December 2012, submission of an application is not sufficient. It is expected that insurance companies will receive a significant increase in submitted business and we would therefore strongly recommend applications are made at the earliest opportunity.
Please note the above premiums are for illustrative purposes only and cannot be guaranteed. Based upon comparison quotes obtained from Avelo on 9th October 2012