Insurance companies are penalising pensioners for being old by hiking up costs or, worse, refusing to cover them.
As soon as people hit 65, premiums soar and by the time they reach 80, they’ll be lucky to find cover.
“It defies belief that in 21st century Britain people are still refused travel insurance because of the date on their birth certificate,” storms Michelle Mitchell of Age UK.
While most firms say they’ll offer cover to existing customers up to the age of 100, many refuse cover for those over 80.
In a recent mystery shopper exercise, companies such as Halifax, Tesco, Co-op, Sainsbury’s, Admiral and Esure all refused to insure a man aged 84 and told him their upper age limit is 80. Aviva will only consider new motor insurance customers up to 84.
Andy Goldby, director of motor pricing and underwriting at Direct Line denies discrimination, says: “Direct Line will insure new customers up to the age of 89 if they meet our underwriting criteria.”
But with so many firms turning down pensioners, they are unable to compare prices to find the best deals.
And hopes that the unfair practice would be stopped by new anti-discrimination laws due to come into force in 2012 look to have been dashed.
“The proposal made by the last government to allow insurers to use age limits undermines the spirit of the legislation,” says Ms Mitchell.
There is no medical evidence to suggest that 65 year olds are at higher risk than 64 year olds.
Yet Moneysupermarket research shows that average travel premiums jump more than a fifth on your 65th birthday and a further half on your 66th birthday, almost doubling in two years.
Average costs of cover rise from £52.65 at 64, to £64.79 at 65 and £98.15 at 66.
“People need to prepare themselves for the shock of an overnight hike in travel insurance premiums,” warns Bob Atkinson, travel expert at moneysupermarket.com.
Of 98 annual worldwide travel policies examined in a recent survey conducted by Which? Money, only five covered people aged 80 or older. Three-fifths of car insurance policies are not available to people aged 81 and over.
“Restrictions imposed by insurers leave many struggling to pay increased premiums just when they may need cover the most,” says Peter Vicary-Smith, chief executive of Which?
According to insurance broker Peter Hayman, of PJ Hayman: “The problem of arbitrary changes at certain ages is a perennial one. To maintain a competitive edge some insurers decide they don’t want to cover people above a certain age. Age discrimination legislation on the horizon may preclude insurers from having an arbitrary age cap.”
The Equality Act 2010 was passed in April but the ban on age discrimination won’t come into effect until 2012. But the law looks likely to relate only to work-related discrimination and there is expected to be a specific exception allowing age to be used in the provision of financial services where it is “fair and reasonable”.
But randomly hiking prices simply because someone reaches 65 or 66 is not fair or reasonable. And turning people down just because they’re 80 is an insult to older people.
When 80-year-old grandmother of nine Joyce Anderson booked a cruise to Barbados she knew she would need to get decent travel insurance.
“I have a heart condition and high blood pressure so needed to know that I could pay for medical assistance if I needed it on holiday,” says the former secretary from Glasgow.
“I fully expected to pay a hefty premium because of my age and health but got a shock when I called Insure Direct for a quote. They told me they didn’t want to insure me.
“They didn’t even apologise. They just said no because of my age and that was the end of the phone call.”
She turned to Saga Insurance and had no trouble setting up a policy there instead.
“There was no question of age or anything,” says Joyce.
“It wasn’t cheap at £500 for a year’s cover, but it turned out well worth it as my blood pressure rocketed abroad and I needed a fair amount of medical attention.”
How to get affordable cover What can older people do to find cover at a decent price?
Shop around, advises Age UK’s Michelle Mitchell. “There are providers which don’t apply upper age limits. People can also contact the British Insurance Brokers
Association, which can refer them to a local broker.”
Will Thomas, head of car insurance at comparison site Confused.com, agrees.
He also suggests that older people shouldn’t just go to a specialist older person’s insurer and assume they’re getting the best deal.
“Contrary to popular opinion, car insurance providers seem to rate the idea that experience comes with age and therefore those between 60 and 75 can look forward to the best insurance prices of their lives.
“While older drivers shouldn’t rule out the specialists, they also shouldn’t discount the possibility that they might be able to get the same deal or a better one from a mainstream provider.”
Article from The Mirror