EU Changes Could Result in Higher Costs for Female Life Policies

Numerous women will find themselves paying significantly more for their life assurance if the European Court of the European Union successfully eliminates the previous stipulation that the experience of claims affects insurance premiums.

It is believed that passing this ruling will lower the amount that women pay for motor coverage and will provide them also with an elevated pension income. However, experts are also saying that the equalisation of premiums will lead to women paying for other types of insurance. For example, because men do not live as long, they typically pay around 25% more than women for their life assurance policies.

Because of this, the ruling could potentially cost women thousands of pounds more than they originally paid. In fact, there is also some worry that the ruling will be retroactive. This would mean a rewriting of previous policies which the policyholders were initially assured had fixed premiums.

Many men and women acquire life coverage in order to ensure that their mortgage is paid in full if they pass away before the amount is paid off completely. ABI or the Association of British Insurers estimates that there are about 15 million life assurance term policies, 10 million whole life assurance policies, and 7 million endowment policies.

There are many disagreements in the industry regarding this ruling. Some believe that the EU does not have the right to instruct insurance companies as to how to conduct their business. They believe that health, age, occupation, and gender should remain essential factors in determining risk.

Although life premiums for women are less expensive, income protection premiums are typically less expensive for men. The elimination of this will likely increase prices as they take the additional risk into consideration. Currently, the pricing of insurance is based on facts and statistics and not on the whim of the company.