In the Test‐Achats judgement on 1st March 2011, the European Court of Justice ruled that different premiums for men and women constitutes sex discrimination. They banned life insurers from using gender, or related factors, in calculating premiums or benefits for their products from 21st December 2012. This affects all protection products such as Life Insurance, Serious Illness cover and Income Protection cover.

Life Insurers use 3 main rating factors to calculate life insurance premium rates – age, gender, and smoking status. For 80% of applicants, the premium rate will be calculated based on this information only. An individual’s health is only taken into account in a small minority of cases, with a loading on standard rates applied if the underwriter determines the individual has a lower than average life expectancy, due to their medical history, occupation, family history of ill‐health etc.

For smokers, the cost of life insurance can be more than double the cost for non‐smokers, reflecting the fact that smoking shortens average life expectancy by up to 10 years.

For life insurance, females typically pay 25‐30% less than the cost for males. Throughout history, females have tended to live longer than males and currently live on average about 5 years longer. It is not completely clear why, but it may be due primarily to lifestyle and occupation factors – males drink more alcohol than females; have poorer quality diets; have much higher rates of suicide and are much more likely to die as a result of a road traffic accident.

Other evidence suggests that females are genetically more likely to live longer. Females have higher life expectancy in all countries in the world, and longer female life expectancy is also found in most animal species. The gap between female and male life expectancy has been gradually declining in recent years, presumably as a result of female and male occupations, and lifestyles, becoming more similar.

Life insurers found gender to be a very useful proxy for the various risk factors involved, but from 21st December, this approach will no longer be possible and will result in males paying similar rates for life insurance, and females paying between 30% to 50% more, depending on age. So, for females needing life insurance cover, now is the time to buy!