For as long as we can all remember, the price we pay for insurance has had much to do with whether you are male or female, and our gender was also a factor in determining the level of income you could receive when purchasing an Annuity.
From the 21st December 2012, The European Court of Justice (ECJ) has placed a ban on Gender Discrimination, meaning a requirement for unisex insurance premiums and annuities rates.
So what will be affected by this change?
Life Insurance. Men tend to pay more than women because they statistically die earlier than women, meaning there is a greater chance the insurance provider will have to pay a claim. Under the ban, it is likely men will pay less and women will pay more.
Health Insurance. Women tend to pay more than men because they are more likely to suffer from certain chronic diseases. Under the ban, it is likely men will pay more and women will pay less.
Annuities. Women statistically live longer than men, with a life expectancy of 82, compared with 78 for men – which means that women have received lower annuity rates compared with men because the pension fund will have to last longer than for men. In future, it is likely that women will get more for their money and men will get less.
Car insurance. A male driver under 21 is twice as likely to have an accident as a woman of the same age and therefore younger men pay more than younger women. Premiums tend to even out when people reach their 40s and 50s. Moving forward, it is likely men will pay less and women will pay more.
In addition to the ECJ ban on Gender Discrimination, there is another piece of European Legislation being implemented during 2013 which is called Solvency II. This new directive requires insurance providers to boost the amount of capital that they hold in reserve to protect them against any future financial crises. It is expected that this directive will further push up the cost of life insurance premiums or reduce the amount of income available from annuities as insurers will be restricted on the amount of capital that they can deploy to make investment returns.
What is more apparent than ever is that you should get advice and compare the market when looking to buy Life Insurance or Annuities. If you don’t, you could end up with the wrong cover or income or, worse still, have paid too much for it.
At Cullen’s we can compare the market on your behalf for any of your Life Insurance or Annuity needs. Please do not hesitate to contact one of our consultants who will be on hand to help.