EU Gender Directive – women’s life insurance costs to increase

Do you recall something in the back of your mind about the new EU Gender Directive?

This is where the EU has decided that insurers who charge different prices to females than to males, and vice versa, are discriminating against females………….or males.

Ladies live longer than men, apparently. Thus, actuaries used to give ladies better pricing on their life insurance, as well as car insurance, but not on annuities (because they’ll live longer of course!).

What does this mean for you?

If you are a lady then, from 21st December 2012, the cost of buying new life insurance will increase, possibly by around 15% according to HM Treasury (December 2011). 

In real money, this means that if you were paying £50 per month on a 20 year level term plan, it may go up to £57.50 per month. Over the 20 year term, you’ll pay £1,800 more.

It may also effect those of you ladies who have reviewable premiums and you may find that your premiums increase by more than you thought they would.

So, does this mean that the cost of men’s life insurance is going to reduce then? Unlikely, simply because ladies cannot be priced below men’s prices, doesn’t mean that men should be priced less than they are already.