The way that the cost of life insurance premiums are calculated are set to go through a series of complicated and bewildering changes over the short term and we will try and explain how this could affect your premium. The major changes impacting on the cost of life cover are taxation and the European Gender Directive.
The important change to taxation is referred to as “The I minus E” (that’s income minus expenses) taxation regime currently allows providers to offset the costs of their life insurance business, from the profits made on their investments. For new policies and business written from 1 January 2013, this will no longer be allowed. Whilst closing this ‘loophole’ will raise more revenue for HM Treasury, it’s set to push up life insurance costs for insurers, which inevitably will get passed on to consumers through higher premiums. The increases to premiums will affect both life insurance and critical illness cover (as most critical illness is combined with life cover). The effect of I minus E is likely to wipe out any advantageous changes in premiums resulting from the Gender Directive.
So how will this affect you and the cost of your premium?
The best solution is to contact us at Johnson Gibbs so that we can independently calculate the premium cost specifically for your circumstances. If not you risk overpaying for your cover.
You can email us at firstname.lastname@example.org or call us on 01926 494457 and we will check your premium and see if you can reduce the cost of your cover.