OpinionMay 15 2013

Age is last area of discrimination in financial services

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My mother-in-law turned 85 last year. Please do not tell her I shared this fact with you as she is extremely sensitive about her age.

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It is up to you to reflect this and not to rely on experiences that are 10 or 20 years out of date.


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