The insurance industry, not surprisingly, offers different rates to different types of people.
On the face of it, this seems logical. Statistics prove conclusively, for instance, that young female drivers are less likely to have a wreck than male drivers of the same age. Therefore their car insurance premiums are lower.
By the same token, women live longer than men – four years longer, on average. As a result, their annuity rates are lower than men’s when they come to take their pension benefits, because the payments will have to be spread out over a longer period.
Men also pay more than women for term life assurance cover, other things being equal. And there are other instances of such differentials.
But all this may be about to change. These decisions may be ruled “gender discrimination” by the European Court of Justice, which is due to deliver a verdict on this issue on 1 March. ECJ decisions cannot be appealed, and the impact could be felt almost immediately.
No one knows exactly what the results will be if the ECJ rules against setting premiums on gender. But the likelihood is that men’s annuity rates would fall, while women’s rates would only rise slightly. Similarly, unisex pricing for life assurance would probably mean that women will pay more than they do currently. Some insurers may simply use the male rate for everyone, which could result in fewer women buying life cover.
As we said, the jury is still out – for the next few days, at least. However, the prevailing opinion in the financial services industry is that the ECJ is indeed going to ban “gender discrimination”.
We’ll update you of the ruling, and the implications it carries. As always though, it makes sense to sit down with experts, listen to their advice, and take action – sooner rather than later.
As financial planning experts and wealth management specialists , we’re well placed to help you make the most of any new situations like this. If everyone is indeed to be treated “equally”, we’ll help ensure that you don’t suffer as a result.
To arrange a meeting, talk to us today.