When civil partners are treated as single

Rupert Jones discovers why same sex couples are still paying far more than heterosexual couples for their life policies

The Civil Partnership Act gave same-sex couples the right to be treated in the same way as married heterosexual couples when it comes to their finances. But these rights and privileges have not filtered through to every aspect of financial life; gay couples are still being charged more for life insurance.

So says Compass, a firm of financial advisers that offers specialist advice to the gay and HIV positive communities. The problem is, male civil partners are still treated as "single" when insurers work out how much they must pay for life insurance and critical illness cover. Married straight couples enjoy lower premiums for their cover because they are presumed to be less promiscuous.

"The majority of life assurance companies are charging 'single male' premium rates, even if the couple applying have signed the civil partnership register," says Chris Morgan, managing director of London-based Compass. "This means hundreds of gay men are being overcharged for their life insurance."

How much over the odds will depend on their age, sum assured and so on. One of the issues is that many insurers ask gay couples for an HIV test if the amount of cover is £250,000 or more, even though the firm might go up to £500,000 before asking a married couple. Only a handful of companies - including Royal Liver, Bupa and Resolution - have equalised the figure, at between £300,000 and £1m.

"If these companies can make a clear statement on the issue of civil partnerships and HIV risk, then why can't the others?" says Mr Morgan.

It is now illegal to discriminate on the grounds of sexuality in many areas of business. But are life insurers doing all they can to banish discrimination?

This week, Zurich was accused of penalising gay people. The claims were made during a court case involving the giant insurer and Ivan Massow, the gay activist who, during the 1990s, became one of the first entrepreneurs to cash in on the "pink pound".

Mr Massow was an independent financial adviser, but decided to become an agent of Zurich in return for a £330,000 loan - which, at the time, surprised many because he had previously waged a poster campaign against Allied Dunbar, now part of Zurich, highlighting its allegedly unfair treatment of gay people.

He claims Zurich then went back on an agreement to make its policies more accessible to gay people, and his business lost millions as a result.

The judge said one possible explanation was that Zurich had teamed up with Mr Massow to spite him - or it could be that it had just wanted to sell policies to gay people through Mr Massow's company. The judge agreed it should go to trial but said his case was "thin".

A Zurich spokeswoman later rejected Mr Massow's allegations of homophobia but refused to give details of the firm's policy now. Mr Morgan says his firm doesn't really use Zurich, "because of the past. I don't think gay people are willing to forgive some of the things that went on".

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