Gender Directive: how your life insurance application will be handled
With a month to go until the Gender Directive outlaws using gender when pricing life insurance, we look at how the different insurers are preparing for the change.
The clock is ticking. On the 21st December new legislation kicks in - the Gender Directive - barring insurers from using gender when underwriting products.
There are three main areas which will be affected: life insurance, car insurance and annuities. For more on annuities, check out Buying an annuity? You need to act now!
However, today I want to look at life insurance.
Why is life insurance affected?
Gender has, up until now, played a significant role in the pricing of life insurance. It all comes down to life expectancy; men have a lower life expectancy, and therefore are more likely to die during the term of the cover. As a result, their policies are more expensive, to cover for the fact that an insurer is more likely to have to pay out on a claim.
But from next month, insurers can’t take gender into account anymore.
Different insurers are handing the changes in different ways. They all have different dates when they plan to implement the changes, and different ways to handle ‘pipeline’ business – the life insurance applications they receive before the deadline, but which aren’t approved and sorted by the 21st December.
So with the help of life insurance expert LifeSearch we’ve looked at what you can expect from the different insurers.
Aegon
When will rates change?
17th December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
Start date must be within 30 days of terms issued.
Ageas
When will rates change?
21st December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
All plans must start by the end of March.
Aviva
When will rates change?
17th December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
Standard life insurance deals must start within 120 days of acceptance. For non-mortgage-related simplified cover must start within 30 days, 90 days for mortgage-related simplified cover.
Beagle Street
When will rates change?
17th December.
Can you have a start date after 20th December and still get gender specific rates?
No.
Bright Grey
When will rates change?
21st December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
You can get 'intial cover' while Bright Grey decide exactly what terms are appropriate for you. You can get initial cover of up to £300,000 for life insurance, £125,000 for critical illness and £15,000 per year for income protection.
Initial cover will be offered until 19th January (or when the cover applied for starts) for cases where terms have been offered before 21st December.
For cases after that date, initial cover will stop when the first of the following events occurs:
- 22nd March 2013
- When the benefit applied for begins
- Your application is declined or postponed
- If the lives assured or cover changes
- 30 days from the date the decision to offer was made (for cases where the terms offered have not been accepted)
Friends Life
When will rates change?
21st December.
Can you have a start date after 20th December and still get gender specific rates?
No.
Legal & General
When will rates change?
21st November.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
Start date must be confirmed before 21st December. Start date must be within 90 days of the quote date.
LV=
When will rates change?
10th December.
Can you have a start date after 20th December and still get gender specific rates?
No.
Pru Protect
When will rates change?
21st December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
Start date does not have to be confirmed before 21st December. But start date for cover must fall within 90 days of acceptance.
Scottish Provident
When will rates change?
21st December.
Can you have a start date after 20th December and still get gender specific rates?
Yes.
What are the rules?
Introduction of initial cover of up to £500,000 for life insurance, £350,000 for critical illness and £15,000 per year for income protection.
Initial cover will be offered until 19th January (or when the cover applied for starts) for cases where terms have been offered before 21st December.
For cases after that date, initial cover will stop when the first of the following events occurs.
- 22nd March 2013
- When the benefit applied for begins
- Your application is declined or postponed
- If the lives assured or cover changes
- 30 days from the date the decision to offer was made (for cases where the terms offered have not been accepted)
Zurich
When will rates change?
10th December for whole of life cover and income protection, 17th December for all other plans.
Can you have a start date after 20th December and still get gender specific rates?
Yes
What are the rules?
Still to be confirmed.
Does it matter?
If you need life insurance, and get a move on, chances are you won’t be affected at all. But the longer you leave it, the more these various approaches may come into play. There are all sorts of different things to consider when taking out life insurance beyond price. You can find out more in How to pick the right life insurance policy.
And for a month, the way the insurer plans to handle pipeline cases is another one to consider.
More on life insurance:
What happens to your money after you die?
When you should review your life insurance cover
When life insurance doesn’t pay out
How to pick the right life insurance policy
You’re never too young for life insurance
Save 50%+ on your life insurance
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature