Real Life

Closed-door policy

Can insurance companies charge more based on age?
Closed-door policy

Why do insurance companies discriminate so blatantly against older travellers? People in their seventies and eighties now travel widely but most companies are emphatic that they won’t insure their health. If a traveller has a pre-existing condition, then of course the insurer can impose limitations on the cover. But why assume everyone over 70 is a major risk? Many pride themselves on their fitness from walking or tramping. And they are generally less likely to be engaged in more dangerous “adventure pursuits”.

You say “most companies are emphatic that they won’t insure their (70 and 80-year-olds) health.” Are you sure about this? The Insurance Council of New Zealand tells me that refusing to offer insurance purely on the basis of age would be discriminatory and contrary to the Bill of Rights. But insurers do have the right to refuse to insure for certain pre-existing conditions such as heart disease or diabetes. Insurers also have the right to structure premiums based on risk – and that might mean prohibitively expensive premiums for many elderly folks.

It’s obvious that, generally speaking, those in their seventies and eighties have a greater risk of illness and injury than those who are significantly younger. That includes while they’re travelling. You raise a fair point that some individual elderly travellers are fitter than those who are younger. But insurers couldn’t offer low-cost policies online if they had to do a full health assessment of every applicant. Nonetheless, the Insurance Council recommends that if you’re an elderly person with an excellent health record, speak to your insurers about an individual assessment with the view to providing you with a less expensive policy. If they won’t do that, they suggest you shop around.

Do you have a consumer question for Kevin? Email [[email protected]](mailto: [email protected]) or post to Weekly Consumer, PO Box 90119, Victoria St West, Auckland 1142.

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