The European Court of Justice (EJC) has expressed an opinion about the way companies charge men and women different amounts for some insurance products. The Advocate General to the ECJ has argued that it is wrong to offer men higher annuity deals based on the fact that they are (on average) more likely to die sooner than women. Should this view be translated into law, then mens annuity rates could soon be in line with women’s. However, while this may appear a logical alteration aimed at reducing equality, some pension annuity experts have voiced concern that the measure could in fact mean some female annuitants having a smaller income.
Billy Burrows from Burrows and Cummins said: “I understand the need for equality, but with annuities it is not that straightforward as the issue is longevity. A lot of women are the beneficiaries of the joint life annuities of their husbands or partners, so if these rates fall it may affect their income anyway; only single women would benefit. If passed this law will do the opposite of what it is supposed to. It is another nail in the coffin of annuities.”
Many argue that the gender issues with annuities are much more complex than with other forms of insurance, such as car insurance. Another issue is that the move has the potential to push up the cost of buying an annuity as underwriting could become more stringent.