Irish

Thursday 10 July 2014

The cost of income protection for men set to soar by 50pc

Charlie Weston Personal Finance Editor

Published 05/12/2012|05:00

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THE cost of income protection insurance for self-employed men is set to jump by 50pc from the end of this month, experts have warned.

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This is due to new EU rules, banning insurers from pricing policies on the basis of a person's sex.

Now it has emerged that men will pay more for income protection insurance, which is also known as permanent health cover. And women are set to pay less.

This is in contrast to the situation with motor insurance where the new EU gender directive is set to mean much cheaper motor cover for men but higher premiums for women. Women are also facing higher life insurance costs.

Permanent health insurance is a long-term income replacement cover that pays you an ongoing income if you are unable to work for longer than 13 weeks due to any illness or injury.

Redundancy

It usually covers up to 75pc of income in the event that you are unable to work due to illness, accidents, but does not cover redundancy.

Claims can be made for years, right up to normal retirement age if you cannot work. People can get tax relief on the cost of the policies at their 41pc income tax rate.

Insurance experts at Dublin-based Clear Financial said yesterday they expect a massive hike in the cost of cover for men, of between 30pc and 50pc. The higher rates will kick in from December 21, when the new directive comes into force.

Michael Bradley, of Clear Financial, said: "It looks certain that men are going to be paying considerably more for this cover in 2013. The most likely scenario appears to be that female rates may come down by between 10pc and 15pc, and the male rates rise by between 30pc and 35pc to meet them."

He said men would save a huge amount each month by buying now, before new premium rates apply from December 21 next. The total cost difference between the costs for men and women over 20 years could be between €16,000 and €22,000, Mr Bradley said.

At the moment it costs a woman 50pc more for a typical permanent health insurance premium than a woman.

This is based on a income of €50,000, at the age of 39, and a non smoker, who works a shop keeper or a beautician.

The man pays €167 a month, and a women €250.

Irish Independent

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