IN March 2011 the European Court of Justice set out the principle of equal treatment between men and women.
It ruled that a person’s gender can no longer be used as a factor when calculating the price of insurance contracts.
The new legislation came into effect on December 21 2012.
This directive prevents insurance companies from using gender as a factor when calculating insurance premiums.
This will result in men and women paying the same premiums for their life insurance cover.
This is obviously a significant change as currently life insurance policies for women are less than they are for men, as statistically women live longer.
It is estimated that the cost of insurance for women will increase by 15 per cent.
So you may need to take action now if this will affect you.
As a result, men reviewing their insurance in 2013 may get a pleasant surprise.
Now the good news for women! The same ruling applies when looking to take benefits from a pension policy and buy an annuity.
Men have traditionally benefitted from better annuity rates than women of the same age and health.
Therefore men have received a higher income in retirement, because their income was expected to be paid out for a shorter period. Now the rates applied will be based on a ‘gender neutral basis’.
The message here is very much to look at this now, especially if you have insurance policies and pension plans.
If you are looking at retiring in the near future it is likely this change will affect you one way or another.
It’s important to take advice from a suitably qualified firm of Independent Financial Adviser as there is huge choice available and these areas are complex.
Don’t try to DIY as the potential pitfalls are just not worth the risk.
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