Age is last area of discrimination in financial services

She has a very young outlook on life and loves to travel. Now she is finding it next to impossible to get travel insurance for a reasonable price. Previously she had cover-all insurance from her bank, but now she has been kicked out of this.

Age is the last great area of unfair discrimination in the financial services arena.

I can understand some loading of travel premiums as someone gets older but is age really such a determinant of the likelihood of a claim or are we really talking about lazy and simplistic underwriting?

I could compare my mother-in-law’s claims record with that of my family and of my in-laws.

We qualified for cheap annual cover costing less than £100 a year. While the children were young we claimed when one boy had appendicitis on holiday and again when he had to have a medical procedure on his back.

The latter meant he could not fly and resulted in a substantial claim for a complete holiday cancellation.

My sister-in-law has made numerous claims involving her asthmatic daughter and her accident-prone son.

On one memorable occasion he went extremely quiet when splashing around in the sea. We thought he had swallowed some water. In fact he had discovered his sister’s Nintendo in his pocket.

The point is that family policies are extraordinarily good value – and elderly people’s policies are extraordinarily expensive.

Family policies are extraordinarily good value – and elderly people’s policies are extraordinarily expensive.

Yet I cannot believe the claims experience justifies this differential.

I accept that when an elderly person makes a claim it could be big. But surely there is a way of offering cheaper insurance by using a system of excesses for certain emergencies.

There is another point here. Older people are much more likely to go on escorted tours where medical help may be available. I strongly suspect they are also less likely to take risks.

So come on insurers, take a look at this area again. People are, in general, living longer, healthier, more active lives.

It is up to you to reflect this and not to rely on experiences that are 10 or 20 years out of date.

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Time to kill off exit charges

I’ve been following the debate about platform fees and charges closely.

There are many arguments but I have always believed it is my role to be an advocate for the consumer.

Justin Modray of Candid Money has recently highlighted in-specie transfer charges. For instance Hargreaves Lansdown charges £25 plus VAT – £30 to any retail investor. Others make similar charges.

These ‘exit’ charges were once prevalent in the cash Isa and Tessa market but disappeared under competitive pressure.

I am not convinced they any longer have a role in an age when investors want more flexibility to move their investments.

HL, as an industry leader, has an important role to play in the debate on charges.

I am encouraged to see that chief executive Ian Gorham has now suggested that a flat monthly fee per holding could be unfair to investors with less money invested.

I had a good conversation with Mr Gorham on this very subject when a flat charge was introduced for exchange-traded funds.

I feel a flat fee per holding charge, while simple to administer, discouraged investors from spreading the risk across a wide portfolio of holdings.

Clearly Mr Gorham is a man who was willing to listen to an argument.

Now is the time for all platforms to be looking carefully at their charging structures to see how they will fit into the new investment world, both economically and philosophically.

Exit charges may fit the bill, profits wise, but I suspect they have had their day as far as the discerning investor is concerned.

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Education for annuity shoppers

I was intrigued by Tesco’s announcement last month that it plans to launch an annuity comparison service.

Supermarkets have long been the resource that has disappointed in personal finance terms. Despite their huge reach the products they have offered have often failed to excite.

Initial entries into the savings market were marred by customer service failings and they have rarely displayed the level of innovation for which many had hoped.

However if Tesco can encourage customers to shop around for an annuity rather than accepting the first quotation offered then it could do many of them a great service.

Leaflets on enhanced annuities strategically placed close to the cakes, biscuits, booze and cigarettes might educate just the right sort of customer.

Tony Hazell writes for the Daily mail’s Money Mail section. He can be contacted at tony.hazell@ymail.com