The scenarios that will help premiums to soar

THE ban on quoting men and women different insurance prices on the basis of their gender is not the only measure that is set to send premiums soaring.

A little-known tax change expected in January should add around 10 per cent to life insurance costs.

The government’s move means insurers will no longer be allowed to offset life insurance policy costs against the profits of the business, which means they’ll have to pay more tax.

That increase in costs will be passed on to customers, to the extent of wiping out the savings men would have made from gender-neutral pricing and increasing the hit that women are set to take.

Many insurers are incorporating the estimated cost of the new tax rule into their gender price changes. Actuaries estimate that life insurance premiums will rise by up to 10 per cent under the new tax regime, regardless of gender, with the price of income protection and critical illness policies also affected.

The result is a bad one for consumers. While there will still be winners and losers from the coming ban on ­
gender-specific pricing, the tax change means the cost of the average life insurance policy will go up.