Private medical insurance (PMI) premiums rise significantly when people turn 60, and continue to do so as they get older – a difficult issue which affects the whole industry. Insurers are constantly looking at how to address the situation, because we don’t like having to impose heavy age-related rises any more than our customers like having to pay them.
However, we cannot escape from the fact that the insurance industry faces exactly the same medical inflationary pressures as the NHS. The constant introduction of new, often expensive treatments and drugs, combined with people’s increased awareness of what is available, act to produce significant increase in demand.
The NHS responds to this by rationing, but, to offer customers the kind of cover most of them want and need, insurers cannot deal with it in the same way.
People who want PMI generally want the peace of mind offered by cover with as few exclusions as possible. Cutting costs by heavily restricting what they can claim for does not offer that peace of mind.
So private medicine insurers have to reflect these inflationary costs, as well as increasing claims levels, in our premiums. In addition, it is an inevitable fact that as people get older they are more likely to become ill and need to claim. As with any insurance, this increased risk is reflected in the premium that they have to pay. It is not an ideal solution to spread that cost across all age bands, thereby penalising other groups of people.
We do everything we can to ensure people are aware of likely increases from the time they take out their policy: improved, clearer literature and the introduction on some policies of single-year age bands which help people know what to expect.
We also do everything we can to help people who hit this problem when they get older and contact us to say they feel they can no longer afford PMI although they don’t want to lose it. For example, we might discuss with them the possibilities of larger excesses on their policy or trading down to a budget policy.
In the end, the onus is on the industry to innovate, to try and offer PMI in different ways to help people get the kind of cover they need at a price they can afford.