As with most things in life, the sooner you start paying into something, the better it is and the faster you’ll reap the rewards. This is especially true of life insurance and particularly at this time of the year, as on December 21 2012, there is a new European directive that rules pricing discrimination based on gender will be banned and life insurance premiums will have to be the same. So whereas historically women, who tend to live longer than their male counterparts and are deemed to be healthier than males, have enjoyed cheaper life insurance cover, this will no longer hold true. They will be required to pay exactly the same amount in premiums as men. This new EU directive has prompted many pricing comparison websites to begin targeting potential female customers in an effort to get them to either take out life insurance or renew an existing policy. Roger Edwards, proposition director for Scottish Provident, has said: “As much as the EU ruling caused us consternation, the countdown to 21 December is a fantastic opportunity for advisers to engage with their female clients and promote the need for life insurance. It’s a simple message to get across: buy now or pay more later, as prices won’t be this cheap again.”
Whilst Andrew Stocks, Director at comparethemarket.com said: “The new EU regulations on gender-neutral pricing are likely to impact women, driving up the average price of life insurance. For those wanting to beat the price rises, they should visit comparethemarket.com to compare the current life insurance offers available on the market. We can help our customers find the right policy to suit their needs at a great price.” And as life insurance premium prices have been falling for the last 10 years and are at an all-time low, if you take out a policy now, before December, you could end up saving yourself a massive 49% in premiums. Most life insurance companies agree that life insurance prices are likely to rise when new EU legislation comes into effect at the end of the year so ladies, if you haven’t got life insurance, now is the time to think about it. And, the earlier you take out life insurance then, generally speaking, the cheaper it will be over the lifetime of the policy. In other words, start young to get the best savings.
Jim Poptani, IFA for Hertfordshire-based Poptani Financial Solutions, has already started writing to female clients warning them of the effects the gender-neutral pricing directive will have on life insurance premiums. He said: “I started writing to my female clients months ago because the directive would affect premiums dramatically.” The problem that insurers are facing is that during a recession, many clients either cut down on their premiums or cancel policies altogether, and the new EU ruling will possibly make the situation worse, with the added pricing hike. Poptani added: “Even people who can afford cover are looking to cut back. Ultimately it all comes down to what people perceive to be their priorities.” Moreover, in addition to the new EU directives on gender rules, insurers will now have to boost the amount of capital they hold in reserve to protect them against any future financial crises as part of the EU’s Solvency II regime, thus adding even more to the premiums. However, all is not lost as when questioned, many people’s ideas of how much life insurance actually cost was more than anticipated. Scottish Provident went out onto the streets to conduct a survey into why people had not got life insurance and why and Mr Edwards said: “Of those questioned, the main response was protection products were perceived as being too expensive. Many women were surprised at how low current costs could be.”
You can review life insurance costs at any of the major comparison sites.