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Legal & General makes the switch to gender neutral protection rates

Legal & General has today made the switch to gender neutral pricing for new customers, with female life premiums increasing by an average of 23 per cent.

Male life premiums have fallen by 3 per cent, on average.

On average, female life and critical illness premiums have gone up 9 per cent while male Life and CIC premiums have fallen by 4 per cent.

The provider says today’s prices could change when the rest of the market makes the switch to gender neutral pricing.

L&G actuarial director for individual protection Stuart Welch says: “As the leader in the protection market we are moving to gender neutral pricing early to provide the certainty we believe advisers and their customers need.

“The new quotes come with a 90 day guarantee so advisers can begin to think about next year’s pipeline with that clarity. It is likely that the market will see some volatility in the aftermath of all the different moves to gender-neutral rates and this will continue into 2013.”

In March 2011, the European Court of Justice ruled that from 21 December 2012 insurers can no longer charge different premiums for men and women.

Over the past few months, providers have announced how they will deal with pipeline applications and when they will switch to gender neutral rates.

Last week, Money Marketing revealed PruProtect will switch to gender neutral pricing on 21 December for all products except its whole-of-life plan, which would switch on 3 November. The provider says all of the underwriting must be completed by 21 December to secure gender-specific rates.

Last month, Aegon announced that protection customers must accept terms on completed contracts before 21 December in order to secure gender specific rates and it would set up a gender team to help with the application process. L&G and Aviva adopted the same approach.

Zurich will switch to gender-neutral rates on its whole-of-life plan and income protection plan on 10 December and its level protection and decreasing mortgage plan on 17 December. All applications still in the underwriting process after 20 December will be offered gender-neutral rates.

Bright Grey and Scottish Provident, on the other hand, will give limited “initial” cover to customers with applications in the pipeline until the underwriting has been completed. Cases in the pipeline have until 22 March to complete to secure gender specific rates.

Ageas Protect will enter into a contract with the customer before the underwriting stage, although the customer will only be covered for accidental death cover until the underwriting is complete.

Money Marketing revealed LV= will switch to gender-neutral rates on 1 December, but will offer gender-specific rates to customers who submit applications before that date. The provider has since pushed back the switch to gender neutral pricing to 10 December.

Friends Life says protection applications must be fully underwritten and on risk by 21 December for customers to obtain gender-specific prices.

Skandia started quoting gender neutral rates on 5 November. Customers who had a quote from Skandia before 5 November have to submit an application before 3 December to secure a gender specific rate.

The table below shows how L&G’s rates have changed as a result of gender neutral pricing:

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