The Equality Bill before the House of Lords will have a specific exception to allow insurance providers to treat people of different ages differently. Given the nature of pricing insurance, if equality in rates were required it would see the young subsidising the old, due to the natural increasing risk with age of claiming on the likes of a permanent health insurance policy or a medical insurance plan.
The Bill aims to put an end to age discrimination in England and Wales. But in aiming to remove age deescrimination, it includes powers to make exceptions, so that justifiable age-based practices can be allowed to continue. As you are probably more than aware when taking out an insurance policy oftern you will be required to go through a process known as underwriting. Many factors determine the cost of your insurance premiums and in some cases a significant proportion of the cost is based on the age of the applicant, where increasing age sees an increase likelihood of claiming on a policy.
As such insurance will have a specific exception to the bill, insurance prices and conditions can still be varied by age, if the variation genuinely reflects risk or costs and is not an arbitrary decision.
Organisations representing the elderly are furious, as they argue that on insurance it is impossible to prove any arbitrary decision, as insurers will always back up arguments with ’statistics’ that only they have access to.
There will always be arguments to both sides of any debate but for the time being many insurance premiums will still have a weighting based on age. This means those who are thinking about insurance for the first time and are in the market for a life or health policy can still lock in guaranteed rates at a very competitive price for a lengthy term when young and healthy.
If you are looking for an insurance policy and need further information, some guidance or a quick quote to get an idea of price then let us know, dealing in insurance day in, day out, we are in a great position to help.
Further details can be found at IFAonline.
