21st December 2012 has been and gone, and contrary to the Mayan calendar the world did not come to an end, unlike gender specific pricing for insurance, which has now been consigned to history. So what does this mean for the cost of life insurance cover going forward?
On the whole, prices have increased, but the size of the increase varies depending on your age, sex, type of cover you are looking for and whether or not you are a smoker. For example £100,000 of cover over 25 years for a 35-year old non-smoking male with no health issues has increased from £8.18 a month from the cheapest provider in November last year to £8.80 a month with the cheapest provider today – that’s an increase of 8%. The increase is much more significant for a 35-year old non-smoking female, rising from £6.54 in November to £8.80 today – a 35% increase.
The silver lining for women, who are bearing the brunt of the rises in most of the areas of gender-neutral insurance pricing changes, is income protection. Whereas historically women’s life insurance was always cheaper than men’s on a like for like basis, by contrast they have always paid more for income protection cover. For a 35-year old woman non-smoker the cost of £1500 a month cover taken to age 65, has dropped from £43.88 in November to £32.35 today, a reduction of 26%. For those women who already have income protection policies, now would be a good time to review cover to see if savings can be made or if the level of cover can be increased for a similar monthly premium. For those without cover, it is now a significantly more affordable option. Rather than pay out a lump sum, income protection provides a regular income in the event of being unable to work as a result of accident or illness. This cover would then continue to pay until either the end of the term or until the policy holder was well enough to return to work.
Despite the fact that the price of life insurance for women has increased, it is still relatively cheap to provide reassurance against unforeseen events, and the younger you are when you buy it, the more affordable it will be. So if you missed the boat to buy before G- day, don’t put off forever as it will only get more expensive.