An older population will make insurers change

Death, destruction, illness, obesity, doom and gloom -is the average news bulletin. So you could be forgiven for missing a recent flurry of government activity on care for the elderly, pensions, working ages and care.

 

We are all living longer and, assuming one of the headline stories does not kill us all off early, this trend will continue.

 

The government has launched a strategy "Building a Society for All Ages", to help Britain prepare for our ageing society. It is long on political hot air and short on actual detail of what this means to us, and how we will pay for it.

 

With pensioners now outnumbering school children, the government is outlawing age discrimination in goods, facilities and services. But it is unlikely to fully outlaw age discrimination in insurance.

 

As part of helping the economy respond to an ageing society, a review of the Default Retirement Age will be brought forward to take place next year.  Currently employers can require all staff to retire at 65 regardless of their circumstances. The majority of people retire before 65, but 1.3m people choose to work beyond state pension age, and many more say they would work past 65 if their employer permitted it.

 

Denise Keating of leading age campaigners the Employers Forum on Age says, "Every year thousands of people over 65 make huge contributions to the UK's economy and heritage, yet despite being capable of continuing in work, many more individuals are involuntarily retired at 65. Pensioners need to work now because they have seen the financial crisis drain their pension. In an ageing society and as recession begins to bite, we can no longer afford a culture of early retirement. It is vital that this anomaly in the age discrimination legislation is removed as it will help deliver the massive cultural shift which is needed to stop people being stereotyped by age." 

 

New research by LV= says over 900,000 over 65s are still working, with a third of these working full time.  Nearly half of people in this position say they have no idea when they will be able to retire. In addition, more than one in five of those within five years of retirement say they will retire later than they had planned before this recession hit them.

 

This trend towards later retirement reflects a range of economic pressures that are only amplified by the effects of this recession, as well as broader health and lifestyle factors that see many older workers keen and able to maintain an active role in the workplace beyond the traditional age 65. 

 

Insurers must respond to this trend by creating and amending a more flexible range of products to support people entering and moving through retirement.

 

Too many private medical, health cash and income protection products will not automatically accept people above 64. Insurers will say that existing customers can continue cover, but that misses the point that many older people will continue working full or part time either for a new employer that does not provide insurance for them, or for themselves.

 

Insurers too, must move a way from the mindset that at 65, you instantly become old, frail, and doddery. Many active sixty or seventy year olds are far healthier than people in their twenties or thirties, as they have not been brought up on a diet of food that is producing the heaviest youngsters ever seen. When these oldies went to school they may have had one or two fat kids in the class, now half the class can be overweight. Go down any high street and count how many obese people under 40 there are, or see the television adverts for a leading supermarket where the staff look like they spend more time eating the food than selling it.

 

So, insurers, prepare for changes in how people live and when they retire. Either scrap upper age acceptance limits totally, or increase them to something realistic.

Long-term care: Hot topic: July 2009

 

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An overview of long term care insurance    Types of long term care plans    Get a long term care insurance quote