Life Insurance Premiums To Rise In 2013Posted by Steven Keogh
The ongoing cost of both health and life insurance could rise by up to 30% in 2013 as a set of newly created tax rules are fully expecting to hit insurance profits.
For the first time in over an estimated 10 years, the cost of life insurance is expected to rise significantly.
Because of this, many financial advisors and insurance brokers are advising people that if they need cover then they should buy it before the prices rise.
It has been widely reported that new European legislation which is due to come into force at the end of this year will make it compulsory for all insurers to offer unisex rates on all types of insurance including critical illness cover. This is expected to significantly increase the cost of insurance for women as their premiums are usually less as they are more likely to not die early and therefore make a claim on their insurance policy.
What a lot of people won’t realise is that new tax rules will be rolled out and implemented at the same time which will force up the cost of insurance right across the board and any gains which men might see from potentially cheaper unisex rates will effectively be wiped out by the new tax.
At the moment, UK insurance providers are permitted to offset any costs of their life insurance business against any profits which they have made on their investments. However, during the last budget it was announced that a new legislation was to be introduced which will effectively close down this loophole.
Whilst this may provide more tax for the treasury, it is likely to increase insurance costs for life insurance providers which in turn is expected to be passed on to the consumer.