Life Insurance ~ Big Price Rise ?

LIFE INSURANCE - Cost Increases for Women ? Compare Broker                    ~ Life Insurance Deals Online On-line > 15 secs  Article on:

WILL WE NOW GET - SAME COST "GENDER NEUTRAL" INSURANCE PRICING  

Several years ago a Belgian consumer group challenged an opt-out under European law known as the EU European Union Gender Directive, which allows insurance companies to use gender as a rating factor when pricing risk, provided certain conditions were met.

On 1 March 2011, the European Court of Justice ECJ decided to make a landmark ruling that could have far far reaching consequences on the costings & benefits for life insurance, health assurance, pension annuity, motor insurance & general insurance business in both UK & Europe.

The insurance industry uses gender-based pricing across a wide range of contracts. However, many UK Life Insurance Providers believe that for insurance premiums to be fair to consumers they should be based on a statistically proven assessment of risk. Gender is a very important factor in this.

Life Insurance Price Increases ?

• The ruling though, which may not be appealed, means that it is illegal for an Insurance Company to use gender as a factor when assessing their risks thus setting their insurance premiums/benefits. They also ruled their decisions should be applied by 12/2012. Most Brokers had expected there to be a transition period of anything up to 2/3 years not 20 months for unisex insurance.
  
• It is a general known fact that Life expectancy is longer for women than for men. So, for life insurance, premiums are usually lower (better) for women than for men. Conversely, annuity rates are higher (better) for men than for women. Women tend to pay more for health insurance (such as PHI income protection, Critical illness and Private medical assurance PMI ) than men do.
  
• The decision ruled that it is illegal to use gender as a factor when assessing risk and setting premiums. Insurers would have to offer what is known as gender-neutral life insurance, same sex life insurance cover, single price life insurance, unisex life insurance rates. The likely effect of this would be that now Life insurance for example could possibly become more expensive for women by upto 20% & 10% cheaper for men according to the ABI.  Health insurance would become more expensive for men & pension annuity income rates would be poorer for men.
  
• Many Insurers had made representations through their various trade bodies such as the ABI - who were disappointed with the news. Likewise many Brokers & Insurers were taking precautionary steps to ensure that they could move quickly to respond to new permutations and timeframes. 
  
  As the rule changes will not apply apply immediately to new business, many Uk Life Insurance Companies stated that they had aimed to be in a position to operate transitional arrangements if needed - thus offering gender neutral rates within a matter of days & to assess options and decide on future course(s) of action. As the date is now set for December 2012 this will allow 20 months to adjust.
  
  We as brokers will now aim to keep prospective customers informed of any developments and will offer more guidance as early as possible after any rulings are made.

Meantime, as the saying goes, buy now whilst stocks last if the ruling could mean you would be worse off after 2013. Life Cover Quote & Broker help

Let's watch & wait for any more news before 12/2012  !

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