Gender will no longer be used as a deciphering factor for insurance policies from 2012 onwards. Many could see a serious price hike in their life insurance premiums as a direct result of the new ruling.
According to the Financial Times, insurers will have to raise £1 billion to cover the costs of ëuncertaintiesí once the gender ban is imposed. When insurance firms need a cash injection they raise prices, pocketing thousands from the consumer.
Women could see a 20% increase in life insurance, compared with men who could see their life insurance reduced by up to 10%.
Viviane Reding, the European Justice Commissioner, met with leading European insurance companies in September to discuss European contract law. They agreed to adopt the commissionís guidelines by the end of 2011.
The European Court of Justice announced in March that the use of gender to calculate insurance policies is to be banned. Not only will this have a dramatic effect on life insurance but car insurance is expected to be affected as well.
The new reform comes under the sex discrimination law, stating that gender can also not be used to calculate any annuity rates either.
The ruling will have a significant impact on the insurance industry and will see increased premiums across the majority of insurers who would have previously taken gender into account.
The law comes into effect from 21st December, giving insurance providers and policyholders just over a year to prepare for the change.
Now could be the perfect time to compare insurance policies. Banks and lenders offering competitive rates mean that consumers can now buy life insurance at a 10 year low.
Recent research from a price comparison website found that three quarters of Britons do not have sufficient life insurance.
Compare life insurance with Money Expert