100 days left for cheap life insurance
Time is running out if you want to get your hands on cheap life insurance cover.
In 100 days, the world of insurance will change significantly due to new gender equality legislation from the European Court of Justice (ECJ).
On 21st December, new rules will come into play which prohibit insurers from taking gender into account when pricing up an insurance quote. And this will make a big difference.
When you take out a life insurance policy, you are getting cover which will pay out a lump sum to your loved ones should you die within the term of the policy. So a big factor for the insurer to consider when working out your premiums is how likely it is that you will pass away before the term comes to an end.
In other words, how likely it is that they will actually have to pay that lump sum.
There are lots of different factors to consider. Perhaps you drink a lot – that makes it more likely that you will have some sort of organ damage, which could lead to you dying early. Up go the premiums.
Similarly, your physical fitness plays a part. If you’re overweight, you’re more likely to suffer health issues, so naturally you’ll face higher premiums.
One other factor that has been considered up to now is gender. After all, women have a higher life expectancy than men. The average girl born today will live to be 82, compared to the average boy who will live to 78.
If I wanted to take out a 30-year, £200,000 level term policy (meaning my family would get the same lump sum payment whether I died in year one or year thirty of the policy), the cheapest deal I could get would cost me just £10.09 a month from Legal & General.
If I was a woman, that exact same policy would only set me back £7.69 a month from Legal & General. That’s £28.80 a year difference. Over the course of the policy, I’d spend an extra £864 because I’m male.
In March of last year the ECJ ruled that it was unfair that insurers took gender into account in this way, saying it was a form of discrimination and went against European equality principles.
In theory, that should be good news for men. After all, if gender can’t be taken into account, we should be offered the same premiums as a woman with the same age and risk profile, right? In reality, it’s more likely that women will see their premiums jump. And some industry experts reckon that men’s premiums will rise too
Get a move on
So if you’re considering taking out some life insurance, whatever your gender, it pays to get a move on. Life insurance is an incredibly cheap piece of cover – just how cheap it will continue to be remains to be seen.
If you’re not sure whether you even need life insurance, read Who needs life insurance?
And for a great guide to finding the right policy for you – because there’s more to it than price – check out How to pick the right life insurance policy.
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