Life insurance: Women to pay the price for equality
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. Women could end up paying around 20 per cent more for life insurance as a result, says Matthew Lloyd, head of life insurance at “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.

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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.

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