Plenty has been written about car insurance and the EU ruling that bans setting premiums based on gender – which comes into effect in December.
But much less has been written about how this law change will affect life insurance premiums.
Unfortunately, the ruling has similar consequences for the cost of life insurance for women as it does the cost of car insurance – premiums will rise.
So women are being called upon to ensure that they take out cover before prices are invariably forced up.
Why will prices rise?
At the moment, the cost of life insurance for women is lower than for men.
This is because women live longer so life insurance policies are less likely to have to pay out.
So, breaking this down, because women are at a less risk of dying during the term of the policy – typically 20-25 years – the policy is cheaper than it is for men.
But this is all set to change later this year.
Thanks to the EU ruling, insurers are likely to raise the cost of life insurance for women, up to the level of that for men.
Women to pay 20% more
Women could end up paying around 20 per cent more for life insurance as a result, says Matthew Lloyd, head of life insurance at Confused.com.
“Our life insurance quotes show that women pay an average of £28 a month for a life insurance policy that will pay out £130,000 in the event of death.
“So a 20 per cent price rise could see premiums rise to £33.60 a month - that’s an extra £67.20 a year.
“Now, this might not sound a lot, but over the 25-year term of the policy that’s an extra £1,680.”
Women are being encouraged to take advantage of the eight months before the price rises kick in to take out life cover.
Lloyd adds: “If cover is taken out prior to the price rises then the policyholder will continue to enjoy that pre-ruling price for the remainder of the policy.
“This is because life insurance is a long-term insurance contract and not an annually renewing policy, like car insurance for example.
Scottish Provident is one of many raising awareness of the effect of the EU gender ruling will have on female finances.
To promote the campaign, Scottish Provident took to the streets of Edinburgh and asked women whether they had life cover, and if not, what the reasons were behind this.
Of those questioned, by far the main response was that it was perceived as being too expensive – with many surprised at just how low current costs could be.
For example, a female, non-smoker who is 30 next birthday, on a 25-year life cover policy with a lump sum of £200,000 pays just £8.60 per month at present with Scottish Provident.
Jennifer Gilchrist of Scottish Provident says the cost of life insurance has “been falling for many years due to the market becoming increasingly competitive”.
She adds: “Yet the gender directive, which has serious implications on all insurance products, is set to bring the costs of protection for women up to the same level that men pay, despite life expectancy being so different.
“Scottish Provident’s gender directive campaign urges women to act now, to ensure they are getting themselves life insurance at much lower costs than those who wait until next year.”
On our EU gender ruling micro-site you can find out more and - if you're female - check how long you have to take advantage of better premiums with our countdown clock.
What do you think?
Were you aware of the effect of EU gender ruling would have on your car insurance premiums? What about life insurance?
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