Older people over 65 are being discriminated against because insurers are operating an ageist blacklist, preventing them travelling abroad. So says a new report “Insurance and Age: Exploring behaviour, attitudes and discrimination.”
Research published by Age Concern and Help the Aged reveals that the over-65s face huge problems buying travel insurance. One in five is unable to get a quote. The position deteriorates further at 75, where a quarter of applicants are turned down. It is not just a problem of acceptance, but of the higher prices demanded for insuring older customers. The report argues that the insurance industry response of “there are plenty of companies insuring older customers if they shop around”, is inadequate, as many older customers do not want to, or do not know how to, find insurers who will cover them at an acceptable price.
The report says that 13% of people over 80 have been put off travelling due to access, or perceived cost of insurance. The survey also found that 31% of those over 80 felt discriminated against when getting a quotation.
Unsurprisingly, older people took a dim view of the insurance industry, and see insurance companies as preoccupied with money and more interested in attracting new customers rather than serving existing ones. They also said that they felt that they were working through an “insurance minefield” of arbitrary charges and false promises.
David Sinclair, Senior Policy Manager at Help the Aged, says: "This research confirms our suspicions that older people often get a rough deal from the insurance industry. Their inability to provide quotes for so many older people smacks of market failure. Older people find it harder to access insurance and are less likely to shop around for alternative products. Government must take the opportunity of the forthcoming Single Equality Act to end age discrimination by putting in place legislation to ensure older people are not discriminated against by financial services, simply because of their age. As the older population grows, this will become a bigger and bigger issue.”
Gordon Lishman, Director General of Age Concern, adds: “This report clearly shows the extent and scope of the injustices older people are facing in access to insurance. It is not acceptable.”
Reluctantly accepting that there is a problem, the Association of British Insurers has launched a major new initiative aimed at releasing the retired from the insurance trap. Shying away from the simple solution that would solve the problem, of suggesting that member insurers remove all age limits, it reverts to its usual answer of a talking shop. The ABI is co-ordinating a task force to work towards making protection more widely available and better value for money. With representatives of the insurance industry, lobby groups for the elderly and the National Association of Citizens Advice Bureaux, the task force will seek to guarantee that no one over 65 is ever again refused insurance without being offered advice on where they might go to get cover.
Increased life expectancy will see demand for insurance from the elderly increase greatly in the years ahead. One in three people aged over 75 take at least three holidays a year.
A key problem for the age group is that few have internet access, where the best deals are to be found. About 35 per cent of those in their 60s shop online, 10 per cent in their 70s and almost no one in their 80s.
Even where they can find cover, the cost can be horrible. On travel insurance, premiums typically double between the ages of 65 and 66. Risks may increase with age, but you don’t suddenly get twice as likely to claim at 66 as at 65.
Insurers and lobby groups for the elderly differ on whether insurers can justify blatant age discrimination. The ABI claims that customers aged over 65 are three times as likely to claim on a travel policy than a 35-year-old. The over-80s make eight times more claims.
Age Concern disputes these statistics. Spokesman Sam Heath says: "There are no statistics anywhere which prove that older are more likely to claim on travel insurance. They do not exist."
The report revealed that more than 53 per cent of 65 to 75-year-olds buy their travel insurance from their travel agent or holiday company, rising to 57 per cent among older travellers. Few of these policies will offer them any protection if disaster strikes while they are abroad because they typically only cover the under-70s.
Saga, Help the Aged, and Age Concern offer travel policies with no upper age limit and cover suitable for older people travel ling.