EU Gender Directive : 21st December 2012

October 25, 2012

From the 21st December 2012, insurance companies will no longer be able to use gender to determine the price of a product.  Whilst in principle this should be a good thing, the practical effect of this EU Gender Directive where life assurance companies are concerned is that women will start to pay up to 25% more for life assurance to bring their cost more in line with current premiums for men and men could have to pay up to a staggering 50% extra for their income protection premiums to bring them more in line with what women currently pay.

Unlike car insurance, where you effectively stop and re-start or re-price your policy every year, a protection or life assurance policy is assessed and priced just once – at the start of your policy.  This premium then remains in place for the duration of your policy.

It is important to note that if you have an existing life assurance or protection policy and you fall within either of the above brackets, there will be no change to your premiums.  Premiums for policies already in place before the 21st December will not change going forward.  However, this does mean that if you start a policy after this date, you will be subject to the new, higher premiums for the duration of your policy.

The sensible thing to do would be to act now.  If you are female and were considering taking out some life assurance over the next while, the best advice would be for you to start looking for your policy now to ensure it is in place before 21st December.  If you are male and you were considering taking out an income protection plan or reviewing the amount of cover on your existing plan, then now is the time to do it.  Realistically, you have until the end of November to get your application processed as the medical underwriting requirements for protection products, and in particular income protection, can take some time.  As we all know, trying to get anything done in December can be quite a challenge!

From the 21st of December onwards, all life assurance companies in Ireland will issue us with new pricing arrangements from which to quote.  The expectation is then, that they will all monitor each other to see who is charging what for which product and they will then position themselves according to their own competitive desires, which will result in further price changes, whether up or down.  Different life companies want different segments of the market, which is currently clearly visible in a simple life assurance quote where one company can charge 50% extra than another company for the exact same type of policy.

 

Summary

 

Females – If you think you might have the need for any form of life assurance over the next while, including G.P. partnership insurance or a simple type of life assurance that just pays out a lump sum to your family on your death, then now is the time to look into it.  Remember – if you are self-employed, you could qualify for a type of life assurance where the premiums qualify for tax relief at 41%. On a plus side, you may find that income protection becomes moderately cheaper for you after 21st December.

 

Males – Protecting your income is vital.  Very simply, it is what pays for everything.  If you have cover in place already, make sure it is sufficient.  If you do not have any cover, now is the time to organise it.  What might cost you €100 per month now, could very easily become €150 overnight, without any additional benefits being offered to you.  Remember – premiums for income protection policies qualify for tax relief at 41%. On a plus side, you may find that life assurance becomes moderately cheaper for you after 21st December.

 

Starting to look into your cover from the second week of December onwards might be too late. You are on official warning to act now!

 

Med Protect offer a qualified, independent and advice driven professional service to medical professionals in Ireland.  We have a very simple quote request facility on our website, which we would strongly urge you to use over the next few weeks.