Briefing: Insurance industry must adopt signposting to support UK’s ageing population

By Technology Editor Clare Ruel

Imagine working for almost all of your adult life, hoping to subsequently enjoy your twilight years by making memories sailing across the sea on a cruise ship with your other half - but then, when you finally reach retirement, not being able to obtain the relevant insurance to help fulfil these dreams.

In August this year, my 71-year-old father, who is in good health, struggled to get travel insurance due to his age and having to disclose repatriation.

My father was looking for insurance after he booked a cruise for my mother and him to celebrate 45 years of marriage.

In the past, he had received travel insurance through his bank as part of a package deal, but once he hit 70, this perk was cut off.

Through my work with Insurance Times, I was able to refer my father to Biba, which signposted him to its non-standard medical travel insurance scheme, delivered in conjunction with AllClear Travel Insurance.

Initially launched in April 2011, this scheme provides specialist cover for customers who find obtaining travel insurance more challenging because of pre-existing medical conditions or age - for example, those who are on hospital waiting lists or undergoing treatment such as chemotherapy.

Originally, the scheme was only available to Biba members, but it has since been extended to cover elderly travellers of any age, with any medical condition, Biba’s executive director Graeme Trudgill told me.

Situations like those experienced by my father were the main reason why Biba established such a scheme in the first place, Trudgill continued.

He said: “It’s like a dating agency where a member of the public comes in and we match them with a suitable programme.”

Providing viable insurance options for older individuals is an increasingly pertinent issue as the UK faces an ageing population - where Brits are living longer into old age, but fertility rates are declining.

The World Health Organization reported in October 2021 that every country is experiencing growth in both the size and proportion of older persons within their populations. It added that by 2030, one in six people in the world will be aged 60 or above.

The UK’s Office for National Statistics, meanwhile, described the ageing population as “a global phenomenon” back in August 2018 - it noted that ”in 50 years’ time, there are likely to be an additional 8.6 million people aged 65 years and over”. This represents a population the size of London.

Issues surrounding the ageing population could be compounded by the state pension age - in April 2011 the default retirement age, where employers could force staff to stop working at the age of 65 - was scrapped. Charity Age UK noted in April 2022 that the state pension age will reach 67 by 2028.

Signposting required

Biba’s foray into travel insurance for the elderly started back in 2010, when the trade body was approached by Age UK - it reported that older individuals it was working with were having difficulty obtaining travel and motor insurance.

After discussions with the Treasury, an age and signposting agreement was launched in April 2012 between the UK government, Biba and the ABI, to provide better access to insurance for the elderly demographic.

Under this agreement, if an insurer or broker is unable to offer cover to an older driver or holidaymaker due to their age, they must refer them to an alternative provider or a dedicated signposting service, like Biba, which uses a telephone triage system to link customers to an appropriate Biba broker member.

Building on this work, the FCA gave the thumbs up to Biba’s Travel Medical Insurance Directory in January 2021, ahead of implementing new rules in April 2021 which specified that insurance providers selling travel cover must signpost customers with more serious medical conditions, under certain circumstances, to a travel medical firm directory.

This April marked the 10-year anniversary of the original agreement between the government, Biba and the ABI - over this time, more than 860,000 enquiries have been referred to Biba’s Find Insurance service.

Trudgill said: “We now have 290 different sources of organisations that signpost to us. When we last looked at this eight years ago, it was 226 – this includes the Post Office, The Prince’s Trust, Money Saving Expert and all sorts of media.

“What we want to do is spread the word - it should not be difficult to get cover. What we are aiming to do is embed signposting across everyone.”

Biba’s scheme with AllClear Travel Insurance is reviewed every three years, to assess whether changes need to be made. At the time of writing, Biba has just sent its report to the government ahead of scheme’s renewal.

Lack of insurance providers

To add fuel to the fire, there is a lack of insurance providers for this older age cohort - some also have an upper age limit. For example, most insurers will offer cover for single and annual trips up to the age of 85.

Saga, however, has designed its services for the over 50s and it provides cover with no upper age limit.

A spokesperson from Saga said: “It’s a real shame that many travel insurance products have an upper age limit. This can often mean reduced choice for the experienced traveller.

“Whatever your age, it is critical that you declare all pre-existing medical [conditions], so you can travel with peace of mind. Those who are seeking insurance need to be mindful of providers excluding cover for some conditions or agreeing to a large excess in some circumstances.”

Saga offers a product where all medical conditions are covered on holiday, with the excess only payable once per claim.

Other providers include AllClear and its medical travel insurance for the over 50s, PayingTooMuch.com offers travel insurance for customers over 70, while InsureandGo has no upper age limit on its travel insurance policies - it says it will consider medical conditions.

Daley Gore, director at broker Just Travel Cover, told me that “many standard travel insurance policies exclude people over 70 due to the perceived increased risk, which can limit the choice for this age group”.

He explained: “It can become even harder if you’re living with a medical condition, travelling outside of Europe or when you reach 75 or 80-years-old.

”We know finding cover can be difficult, but we believe that at 70, the best years are still ahead, which is why we work with a range of specialist insurers to be able to offer cover for people of any age, specialising in cover for those with pre-existing medical conditions.”

Cut off by the banks 

Many banks take a similar approach to age and insurance - Nationwide, for example, lowered its maximum age for travel insurance as part of its FlexPlus bank account package from 75 to 70 in January 2019.

It also raised the surcharge for customers over the age of 75 if they did want insurance - from £50 to £65.

At the time, Nationwide said it was “an outlier offering travel insurance cover up to the age of 75 as standard and we have to reduce the maximum age to 70 in line with our competitors”.

However, not all banks will offer travel insurance to those over 70 for an extra charge - such as in the case of my father.

There are some exceptions though. The Co-operative Bank’s Everyday Extra account offers travel insurance up to the age of 80. Citigold also provides the same cover, but adds a £75 monthly charge if your income is below £150,000 per month.

With people living longer and retiring later in life, insurers will need to adapt their policies to fit the UK’s ageing population.

For example, the 2021 Census revealed that last year, there were nearly one in five people living in England aged 65 or above. Data from The Health Foundation, published in December 2021, additionally predicted that the number of people aged over 85 in England will double to 2.6 million in the next 25 years.

Travel insurance must adapt - otherwise, come 85, people won’t be travelling anywhere. With the population ageing at the aforementioned pace, this could be a costly hit to the travel industry if insurance doesn’t deliver.

Brokers too will need to brush up on the advice given to senior citizens around travel, so consumers can get the cover they need.