There are likely to be significant changes in premiums charged by UK Life Companies as a result of gender pricing, taxation and solvency.
Up until now, Life cover for women has been less expensive than for men with the reverse position being the case for Income Protection policies. Serious Illness (Critical Illness) tends to have pricing which is similar providing a further difficulty in predicting the level of price changes.
It is understood that this will not affect existing plans or where there is an automated increase e.g. indexation. However, should a plan require a non contractual increase or added benefit then the increase will be based on the new gender pricing regime.
Additionally, the tax regime for Life Companies is due to change. The existing system allows companies to obtain tax relief on their acquisition expenses, which in turn allows for cheaper premiums. From 2013 this will no longer be allowed for Protection business.
Finally, there are requirements for insurers to maintain higher levels of solvency which will again increase costs.
The result of all this is that premiums for new policies are likely to increase by 10% to 25% in 2013.
If you are considering taking out life assurance or protection cover then you should do so before the end of 2012 and you should also review all existing plans.
For further information and advice please contact Lycetts Financial Services on 0191 232 1151 or by email on info@lycetts.co.uk.
