Expect a noticeable increase in your insurance premium by the end of 2012. Experts advise that insurance in the UK could go up by as much as 30%. This includes all insurance products: car insurance, life insurance, income protection, disability, and critical illness insurance.
The increase is due to two major changes to legislation that will affect the way insurance companies price their offerings: “The Gender Directive,” and the “I minus E” loophole.
The Gender Directive
Men have generally, in the past, paid higher car insurance – because research showed that that are more likely to have a car accident than women. On the other hand, women have paid more for health insurance – historically, they get sick more often than their male counterparts.
All this is changing now, though. In March 2012 the “Test Achats Judgement” was passed, meaning that as of 21 December 2012, insurers in the UK may no longer use gender as a basis for deciding on the price of insurance products.
“I minus E”
Currently, life insurance companies are allowed to offset the costs of their company operations from the profits of their investments for tax purposes. (“I minus E” refers to Income minus Expenses.)
This ‘loophole’ will be closed by new legislation on 1 January 2013, affecting the profit of insurance companies and therefore insurance premiums paid by their clients. The policies which will most be affected are life insurance and critical illness cover.
Reviewing your policies
The above two changes simply mean that insurance will become more expensive – anywhere between 15% and 30% – depending on the type of insurance policy and the company concerned.
If you are considering taking out insurance or reviewing your existing insurance portfolio, now is the perfect time to do so.
Should you already have life insurance in place, it may be well worth the effort to review your policies and ensure you are making the most of every bit of money you put towards insurance.
For more information, please visit www.sablewealth.com, or call 0845 345 1633 to speak to a consultant.