Whenever an insurance policy premium is calculated, the policyholder's age is a key risk rating factor. In some case, being of more mature years will help drive prices down, and in others it will ramp the price up.
Getting the right level of cover in place is a delicate balance of matching the price you can afford to pay with the features and benefits you need. To help you stay on top of you all your insurance needs, I've compiled this complete guide to personal insurance policies for the over 70s.
Don't Dodge The Cost
The cost of travel insurance policies for the over 70s can be eye-wateringly expensive. Insurance companies raise the premiums for older policyholders because historic statistics indicate that as someone ages they are more likely to make a claim on their travel insurance policy.
For many newly retired couples this means that now they finally have the time to enjoy extended holidays abroad, they face prohibitively expensive travel insurance premiums.
Tempting though it may be, do not skip this cover in an attempt to save money. In the event of an unfortunate incident you could be left owing thousands of pounds in medical and repatriation costs, and potentially leave loved ones out of pocket too.
Getting The Best Deal
The key to getting a good deal is to know what type of cover you need, and then shop around. Just as brands selling physical products target a particular demographic, so too do insurance companies. You may find one with pricing policies that are favourable towards the older traveller. However, you shouldn't make a straight premium comparison without digging into the details. Different insurers offer different levels of cover and additional benefits, making it almost impossible to cover like with like. Look out for features such as access to a 24 hour medical helpline.
It is vital that you declare any existing medical conditions when requesting a quote for travel insurance. Around four million people over the age of 65 have a long-standing illness - that's around 40% of the people in that age bracket. If you travel without declaring the condition, then attempt to make a claim, you could find that your are not covered by your policy and need to meet the expenses from your own pocket.
Some high street insurers will provide cover but exclude your medical conditions. For example, they will cover lost luggage or accidental injury, but if you become unwell due to an existing condition, you will need to meet the expenses yourself. This exposes you to huge potential financial risk. For more comprehensive cover at reasonable rates, look for a niche insurer that specialises in providing policies to those over the age of 70 and / or to those with long-standing illnesses.
You may be becoming increasingly reliant on the NHS, or perhaps you've not needed it so far but want to be prepared in case you do. As we get older, the chances of needing treatment increase.
In 2013, seven million adults were admitted to hospital. More than half of those were aged over 65 years.
Benefits Of Health Insurance
Health insurance can help you get access to alternative therapies like acupuncture and osteopathy; help you get a diagnosis and treatment quicker, and give you more choice when it comes to types of treatments and the hospitals or clinics you visit. Of course, even if you have health insurance, you can still choose to use NHS facilities if you wish to do so.
Getting A Good Deal
As with travel insurance, the increased risk associated with older policyholders raises premiums and reduces the number of insurers willing to offer cover. However, there are still plenty of insurers offering health insurance for the over 70s, each offering their own combination of features and pricing to attract your business.
When comparing policies pay attention to the additional benefits on offer. Some policies offer access to advice lines and help with regular health related costs such as glasses and hearing aids.
To make health insurance more affordable for the over 70s, many insurance providers offer a mix and match approach to their cover. You can choose from core elements such as diagnosis, treatment and alternative therapies, or any combination of the elements of cover available. For example, many people choose a diagnosis policy only. This enables them to skip long waiting times to seek a diagnosis, then switch back to the NHS for treatment of the condition once identified.
Insurance companies will ask you to disclose any pre-existing medical conditions and they will make you an offer based on the information you provide. Some will cover the condition but will increase the premium to reflect the increased risk, others will exclude the condition from your cover, and the rest will quote you a price based on both methods and allow you to choose your preference. Tempting though it may be to play down any health issues to reduce the cost of your insurance, in the long term this could invalidate your policy so it is best to be honest from the outset.
A Growing Market
In the past life insurance was something associated with new homeowners and parents with young. Now many people are making financial commitments later in life, and some also have dependents to care for too. As the demand for life insurance for the over 70s grows, so too does the supply and the range of policies you have to choose from.
Why Get Cover
Life insurance provides peace of mind that upon the policyholder's death, money will available to cover outstanding debts and funeral costs. Others use the insurance policy as a way of creating a sum of inheritance to pass on.
Life Insurance vs Life Assurance
Before taking out cover it is important you become familiar with these two different financial products.
Life insurance will run for a fixed number of years (known as the term). The policyholder pays a premium throughout the term and if they die during this time a pre-agreed lump sum is paid to their estate.
Life assurance policies tend to be more expensive. They run continuously from the date they are taken out until the day the policyholder dies. A fixed premium is paid in which is invested into a fund. When the policyholder dies a lump sum is paid to the policy's named beneficiaries. The value of this lump sum depends on how well the fund performed and the amount is not guaranteed.
As with all insurance policies, honesty is the best option. You will need to declare any existing medical conditions and answer all the application questions truthfully. When comparing prices be sure to check whether any critical illness cover is included with the policy. If this additional layer of protection is not important to you, dropping it can help reduce the monthly premiums.
Affordable Insurance For Over 70s
One of the benefits of getting older is watching your car insurance premiums drop down from the eye-wateringly high prices paid when you were a newly qualified driver. However, regardless of your age, the type of car you drive will affect the price you pay for your cover. You can keep insurance costs down by choosing an efficient, low insurance group vehicle.
Many insurers tend to bundle together a range of benefits with their insurance cover and charge a slightly increased price. These can include breakdown cover, no claims discount protection and legal expenses insurance. Although removing these from your policy may help remove your premium, leaving them in place can deliver added peace of mind.
Investigate Excess Payable
Another factor influencing the cost of cover is the excess to be paid in the event of the claim. If you find your policy is surprisingly affordable, consider decreasing the excess on the policy. This will increase your annual premium slightly, but in the event of a claim you will have less of a lump sum to pay towards the cost of repairs or replacement.
Cheaper Insurance For Older Policyholders
The average annual cost of a combined home insurance policy (covering buildings and contents) is around £150. But there's good news for the over 70s. Insurers believe this age group are less likely to make a claim, and are more honest if they do. As a result the over 70s usually enjoy reduced premiums.
Buildings, Contents And Home Insurance Explained
Buildings insurance typically covers the exterior of the property and any key parts of its infrastructure. Contents insurance covers the goods inside your house, including electronics, jewellery and furniture.
Unlike car insurance this cover is not compulsory (unless you have an outstanding mortgage which stipulates the need for protection). However paying a monthly premium can provide peace of mind and protect you from large bills in the event of damage or a break-in.
Buildings and contents policies are available to buy separately, but most insurers encourage homeowners to buy them together, offering a discount for doing so. It is usually cheaper and easier to take out one home insurance policy, which offers contents and buildings cover.
Provide Accurate Estimates
To take out contents insurance you will need to provide an estimate for the value of your belongings. Many people greatly underestimate this amount and in the event of a claim an undervalued policy may not completely cover all the costs incurred. The Association of British Insurers provide advice to policy applicants on how to calculate estimates.
If you make any modifications to your home it is important you make your insurer aware of them. The addition of a stairlift is unlikely to affect your premiums but most insurers ask to be notified of their installation. Building work and extensions may increase your premium, as can new bathrooms or kitchens as they may increase the value of your property. On the other hand, installing a home-security system can reduce the cost of your home insurance.
OTHER TYPES OF INSURANCE
Besides these more commonly bought insurance policies, the those aged over 70 may also have use for a range of niche products. Did you know you can buy insurance policies for your mobility products? For example, Stairlifts by Brooks come with a 12 month warranty, but owners may wish to consider taking out a policy to cover accidental damage, or adding it to the existing home insurance policy. Comprehensive policies for mobility scooters are also available, covering any liabilities resulting from an accident and offering breakdown assistance.
ASK AN EXPERT
Employing the services of an insurance broker experienced in working with the over 70s can make finding the best deal and right level of cover much easier. The broker will discuss all of your insurance needs and search through the hundreds of policies available to find the best match for you at a price you can afford. Although the broker receives a percentage commission for this work, policyholders can still save money as the broker has access to rates and policies not available to the public directly.
This comprehensive guide was brought to you by Harold H Rigby, expert blogger on lifestyles for retirees.