On 21 December 2012, the European Union’s Gender Directive comes into force which whilst aimed at equalising the premiums paid by both men and women for insurance is highly predicted to increase costs across the board.
The UK initially opted out of the directive but following a challenge by the Belgian Consumer Group, “Test Achats” the equivalent of the UK’s Which? the opt out was ruled invalid and all new business contracted from 21 December 2012 must have gender neutral pricing.
In a recent Consultation Document produced by HM Treasury it was estimated that the changes could mean an extra 15% increase for women taking out policies for life and critical illness insurance and could also mean an increase in the cost of men’s income protection policies.
Amazingly, historic claims for testicular cancer will be borne by women, whilst claims for breast cancer will be borne by men.
The changes mean that men and women will now pay the same basic premiums and no account of the life expectancy or conditions suffered by men or women can be taken into account. Women have historically paid lower premiums for life cover and critical illness cover and these will likely increase.
The amount of claims paid on critical illness policies in the UK is pretty significant and this can be demonstrated by just one of the UK insurers, Legal and General which paid £177 million to £2,784. Despite much press regarding non pay-outs of insurers this equated to a 93.2% pay-out.
Interestingly, the average of claimants was 43 and the main areas of claim arose due to cancer, terminal illness, heart attack, Stroke and MS (Multiple Sclerosis)
It is stated that in the Western world, there is now a rule of 3, 4 and 50. That is 50% of all deaths are attributable to 3 behaviours, smoking, diet and exercise, resulting in 4 conditions, cancer, heart attack stroke and diabetes, killing 50% of all of us prematurely.
If we change any 3 of the behaviours our risk of death is significantly minimised.