As someone who feels passionate about women having financial protection and owns a practice that specialises in advising women, I wrote a lot of protection business before G-Day.
I spoke to a lot of women in the run up and ensured they understood the urgency of getting the cover in place quickly to avoid the hikes in their critical illness premiums. So, in the wake of gender neutralisation, what was the true impact of G-Day and I-E tax changes on premiums?
I compared three different clients with varying amounts of income protection and life and critical illness cover. One client I had quoted for on 12 December and the other two I had done quotes for back in October. None of them had passed birthdays since doing the quotes. One is a smoker and the others are non-smokers. I re-ran identical quotes on 4 January to see the difference.
What I discovered was that the 20% to 25% increase, that I had told my clients they could expect in their CI premiums if they waited until after 21 December to get cover, was in fact quite a long way out and women have been hit much harder than that.
For my December client, the average increase was a shade under 30%. Bright Grey came in with a 38.5% increase and Scottish Provident was the lowest at a 9% increase (this in itself is strange considering that they are effectively the same company).
Friends Life posted a 23% increase and LV= had already re-priced, with the remainder posting increases of around 34%. By any stretch of the imagination these were whopping increases.
However, strangely the client whose original quotes I did back in October had less marked increases of an average of 24.6%.
Moving on to income protection, the story was much more positive for women with some significant price decreases. For the client I saw in December, the average drop in price was 33.5% with Aegon posting the biggest reduction at a staggering 52%, Bright Grey at 43% and Ageas with just 20%. The October client had an average reduction of 30% with Ageas having the biggest drop of 40%.
So what can we deduce from all of these figures? There have been some huge changes in premiums; positive in terms of the decrease in IP premiums and negative in terms of the increase of CI premiums.
The net effect of giving my clients advice on protecting both their incomes and providing them with CI cover for debts and other expenses, is about the same cost to them now post G-Day as it was pre G-Day - obviously dependent on the amounts of CI versus IP cover involved.
It would also appear the providers have changed other criteria in determining quotes, as the individual provider differences seem to be quite vast from one client to another, but that's research for another blog.
Hannah Foxley is chartered financial planner and owner of advice firm The Women's Wealth Expert
