Blog from Galway Talks, 15th November 2012

Issue:  Ban on gender discrimination by Insurance Companies from next January.

Comment:  Earlier this year a legal action was taken at EU level against insurance companies in connection with the long held practice of quoting premiums on the basis of gender.  The ruling found in favor of the applicants and as a result companies may not distinguish between male and female, when quoting premiums from next January.

This will have an impact on Life/Serious Illness/Income Protection Policies, along with Motor premiums.  At present it looks as if the premiums for women on Motor policies will increase, with an unlikely reduction made for men.  Why Insurance companies have taken this stance remains to be explained

It is expected that premiums for men on Life products will reduce marginally but there will definitely be increases for women.  It is therefore advisable for anybody considering any of these life products to arrange the policies prior to Christmas.

Question:  I am saving €250 per month in an Irish Life Savings Plan for many years.  I got a recent valuation which shows that the value is virtually the same as the amount I contributed to date.  Would I be better off putting these monies into an alternative investment?

Answer As I am unsure what type of policy you hold, I am making the assumption that it is a traditional unit linked savings plan.  It has been my experience over the years, that these policies provide poor returns.  I would therefore suggest that you cancel the policy and transfer the lump sum that you have saved into a Capital Guaranteed Term Investment over 4 to 5 years and consider saving the monthly premium through a regular savings deposit account, which currently pays in the region of 3% gross.

Question:  I am a first time buyer and I have been sanctioned a mortgage.  Do you think that this is a good time to buy?

Answer:  Whilst you will never get in at the bottom and out at the top in any market, I think that if you have found a house that is particularly suitable for your requirements then I would not consider waiting.  The fact that you have been sanctioned for a mortgage puts you in a strong position to negotiate in this current market.