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In recent months, Infinity has had more and more expats contact us to ask how their life insurance in Asia will be affected by the introduction of gender neutral insurance policies. Many will be happy to know life insurance policies issued in Asia are not going to be affected. However, there are some important things to consider regarding gender neutral insurance and the validity of certain life insurance policies.
What is gender neutral insurance?
Historically, men and woman have paid different premiums for different insurance policies as they statistically have a different risk assessment for various types of insurance. Take for example car insurance; women are statistically less likely to be involved in a motor vehicle accident than men and therefore as a result paid lower premiums. For life insurance the situation was reversed; women live longer than men and therefore they paid a higher rate for their life cover.
However, as of 21st December 2012, insurance companies in Europe will no longer be allowed to sell gender biased insurance. A policy holder’s gender can in no way affect what premiums they pay. The calculations made will be pooled and like for like both sexes will pay the same for insurance of all kinds.
Why has gender neutral insurance been introduced?
The European Court of Justice ruled that price discrimination in terms of gender is to be banned. In its determined quest for equality and fairness for everyone, they have ruled that it is unfair and discriminatory to treat men and women differently over the issue of insurance.
What effect will this have?
Essentially this means that the cost of insurance premiums will be adjusted. In terms of life insurance, women can expect to pay lower premiums compared to what they have been used to paying in the past. This is because the risk will now be pooled with men. Men will pay more for their policies for the same reason. However, most observers of the insurance industry believe that the change in regulations will mean that the overall cost of life insurance subject to gender neutral regulations will increase. If a married couple have equal amounts of life cover, the difference between the cost once gender neutral regulations come into force is likely to be an increase of around 10%.
People that hold life insurance policies issued in Asia will not be affected. Even in cases where the insurance company is based in Europe, companies will not be extending the gender neutral regulations outside the EU block.
What about life insurance policies issued in the EU?
Policies issued in the EU will be subject to this new ruling. A percentage of expats in Asia hold life insurance policies issued in their home countries. These will be affected and it is important to check your policy details. For women holding these policies it may make sense to switch to an Asian based policy in order to avoid the increase. If you want infinity’s help to review this please get in touch.
However all expats, men and women alike, holding life insurance policies issued outside Asia should check the validity of their policies. It is often the case that people move to Asia thinking that their EU issued life insurance covers them in the same way as it did in Europe. Often what people fail to realise is that their policies do not necessarily cover them once they become an expat. This means that there are expats out there with invalid life insurance policies which will be of no help to their family in the event of death. It is important for life insurance policy holders to urgently check if this applies to their policies.
Infinity has contacted all of the life insurance companies who we deal with and they have all stated that at the present time, there are no plans to introduce gender neutral policies in Asia. If in the future this looks set to change, we will post notifications on the website and contact clients individually. If you are an expat in Asia and are unsure about your life insurance policy, or if you would like information on obtaining life insurance in Asia, get in touch to speak with one of our professional advisers.
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