Older travellers pay too much for cover

Thousands of older people are risking travelling the world without insurance because insurers load their policies with such high premiums that buying cover would push the cost of their trip out of reach, research shows. However, with new rules coming in to combat age discrimination in the workplace on October 1, companies are coming under growing pressure to drop their prices - and not a moment too soon.

With both the time and the money to travel, retired Britons are taking over from students and 20-somethings taking a career break to become the new generation of adventure-seeking globe trotters.

More than a third of those over 60 have had an extended holiday in the past five years and more than a quarter have been on three or more overseas trips in the past 12 months, according to new research from AA Travel Insurance.

They are also becoming increasingly likely to try out "risky" pursuits such as hot air ballooning and mountain climbing, making it even more important that they have sufficient cover for their trip.

But figures from Moneysupermarket, a comparison website, reveal that, once they hit the age of 66, travellers generally have to swallow a 100 per cent hike in their insurance premiums. After the age of 70, they have to pay even more.

Insurers argue that they have to charge older travellers more for cover because claims data shows that they are a much higher risk.

It seems unlikely, however, that the probability of someone making a claim doubles between the age of 65 and 66.

My dad, for example, hit the age of 66 this year. While not retired, he and my mum go on at least three holidays a year - in fact they're off gallivanting in Italy at the moment. But despite his age, my dad is very fit. He generally plays some kind of sport every day, which is more than I can claim, and I can't remember the last time he was ill.

One of the main problems he found when searching for travel cover is that many insurers exclude those over 65 point blank. Competition in the marketplace is therefore not as fierce, and even specialists such as Saga often charge over the odds.

My feeling is that it is time for travel insurers to start looking at older travellers on a more individual basis, just as motor insurers have started to offer discounts to young drivers who undertake not to drive at night.

I am also very much in favour of any moves by companies such as Moneysupermarket to force insurers to give older travellers a fairer deal.

In the meantime, however, it can still pay to shop around - especially as more insurers, such as Bradford & Bingley, are recognising the potential of providing for the affluent older generation and raising their upper age limits.

Moneysupermarket's research shows that a healthy 71-year-old could pay just £50.25 for annual multi-trip cover, even though many insurers would charge them more than £200.

Comments

[Margaret Foxton]

The older person should look around for companies that offer a range of quotations. I found a broker (Portwoods) who offered online quotes for people up to the age of 100 at very reasonable prices.

Most of your comments are ignorant of the realities of insurance. In the 70s car insurance was rated in age blocks (17-20, 21-24,25-29,30-34,35,69,70+) because that was how good the statistics were. Computerisation allowed greater analysis of rating factors so virtually every age can have it's own rate. This has not happened yet in travel insurance mainly because the premiums are so low. There has been a tendancy, however for insurers to start discriminating on age-related claims experience but until recently insurers did not collect much age-related data - they only asked whether the customer was under or over 70, for instance. Almost certainly in the next few years there will be greater variance of premiums (to the detriment of the 50-70 I might add) as insurers implement their findings. Eventually buying travel insurance will be as complicated as obtaining quotations for car insurance. (Mind you everyone is an expert on car insurance aren't they.)

A word of warning. Travel insurance (despite being cheap) is a very complicated product and unless you know what you are doing I would always suggest you contact a broker - only a fool or an expert buys insurance online.