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Insurance costs switch to ‘gender neutral’

Insurance costs switch to ‘gender neutral’

Category: Insurance

Updated: 27/12/2012
First Published: 21/12/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Millions of women are bracing themselves for higher car insurance costs as new EU rules come into effect today.

Under changes ordered by the European Court of Justice, financial companies such as insurance firms must price all products the same, regardless of the policyholder's gender.

Previously, women have typically had an 'easy ride' with car insurance premiums, owing to men being seen as more likely to have a car accident, and so have encountered higher premiums.

In terms of life insurance, men are expecting to see a change in their premiums.

At the moment, men typically receive a higher income with annuity policies compared with women, due to them having a lower life expectancy.

Pricing annuities the same for both men and women is expected to spell problems for male pensioners, who could face significant falls in their annuity incomes. In contrast, women's annuity incomes are expected to rise.

Phil Brown, head of retirement propositions at LV=, urged customers to search the market thoroughly to find the best annuity policy for them.

"Clients who qualify for an enhanced annuity could see the rate they receive increase by as much as 30%," he said.

"Health has much more of a significant impact on the income a client can receive, than the switch to gender neutral rates has made.

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