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Arrange life cover now to beat G-day price hikes

Mortgage brokers should submit protection cases now to avoid potential price hikes arising from the European directive banning gender discrimination.

The European Union directive will come into force on December 21 and could see prices rocket.

Women’s life cover is currently cheaper than men’s due to their longer life expectancy while critical illness protection is occasionally cheaper for men.

The directive is being introduced at the same time as the abolition of the income minus expenditure tax regime which will force re-insurance
companies to pay full tax on protection policies on January 1, forcing prices higher again.

One of the UK’s biggest re-insurers, the Re-insurance Group of America, estimates the cumulative impact could see prices rise by 30% while Mortgage Intelligence estimates women’s protection rates could rocket by 25%.

Kevin Carr, chief executive of Protection Review, says submitting an application or getting a quote by December 21 is not enough and a policy needs to be in force by that date.

He says: “The difference for protection is in the underwriting as it may require doctors’ reports or medical checks. It is not an exaggeration to say it can take months.

“If you have thousands of brokers trying to get customers in be fore the deadline, there will be lots of cases being underwritten at the same time.
There is a concern that there could be a bottleneck at the end of the year so advisers need to look at this now.”

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