4 Reasons to Buy Life Insurance now
There have been a lot of changes announced in the last few months and weeks that will have an impact on the cost of life insurance over the next year or so, and none of the changes are positive. That’s why we’ve put together a list of four key reasons why you should buy life insurance now, or if you already have life insurance, make sure you’ve got the cheapest life insurance policy you can get, with all the cover you’ll need for the next few years.
1- More expensive for women
New changes due to come into effect in December will affect the amount women pay for all their insurance policies. At the moment life insurance companies charge men more than they charge an equivalent women of the same age, because men are statistically more likely to die. The EU have decided they aren’t happy with what they perceive to be sexual discrimination and have passed a ruling to put an end to that, so the cost for women will rise from December.
The deadline for the changes is 21st December this year, but it is expected that many companies will adjust their premiums before that date so they are compliant when the new laws come into affect.
2- Changes to Tax rules
At the moment insurance providers are able to offset the costs of their life insurance business against the profits they make on investments with customers premiums, but the new budget has closed the loophole and will take effect from January next year. Critical illness cover with life insurance attached will also increase in price as part of the changes.
3- Changes to selling regulations
Another change taking place in January next year is the new Retail Distribution Review which will see a huge change to the way financial advisors are able to sell products, and is set to cost the industry nearly £4billion. Any increase in costs usually ends up in the hands of the consumers eventually.
4- Solvency 2 Ruling
Another ruling from the EU is the solvency 2 ruling which will force insurers to put more money aside in the bank for a rainy day, meaning that they can invest less and make less money from their investments. If they make less money, we have to pay them more money.
Changes for this one are in January 2014.