Channel Island experts warn to prepare for gender neutralisation legislation
Pan-island businesses advise islanders to act before EU balances gender books
Leaders in the Channel Island insurance and IFA industries are advising anyone considering their life insurance options to act prior to the introduction of gender neutralisation legislation.
The European Court of Justice has ruled that from 21 December this year, insurers won’t be able to use a person’s gender as a factor in calculating the cost of their insurance.
David Steigenberger, a director with Advisa Hepburn Oracle in Jersey said:
“Because women typically live longer than men, the fairer sex has generally enjoyed lower rates for life insurance. This will no longer be the case with premiums increasing by potentially as much as 15% for women, putting them on a par with men’s life insurance rates.”
On the flip side, critical illness cover is usually higher for women than for men and women currently pay 30-40% more than men for income protection. This will also be changing and the potential premium increases could be significant.
Whilst insurance companies will honour the rates already set on any existing contracts, any new policies taken out after 21 December will be subject to the new European ruling and therefore priced at the higher rates.
Pierre Blampied, managing director of SPF Private Clients in Guernsey agreed and said it was advisable for anyone considering taking out life insurance to do so before the legislation comes into force to potentially save themselves a considerable sum on the monthly premiums.
‘Insurance premiums will unfortunately be going up for women rather than down for men, meaning women have until December to enjoy the current rates. Equally, critical illness cover for men will also increase to reflect female rates,’ said Mr Blampied.
‘Many insurance brokers and Financial Advisers are not happy about the new legislation. We feel it is a case of more bureaucracy gone mad and think it will stunt the market with inflated prices. The best we can do is to advise any women considering taking out life insurance to do so before the end of the year,’ he added.
The market will be similarly levelled in motor insurance, where younger women and older men have historically enjoyed lower premiums than younger men and older women. The legislation will also apply to annuities, and as a result could affect women wishing to draw pension income after 21 December of this year.
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