Important Financial Decisions

Growing old can be a double-edged sword, especially when it comes to insurance. Some companies will view you as a better risk as you get older while others will treat you quite differently.

Car insurance illustrates the different ways that older drivers are treated. Some companies require increased premiums once drivers hit 50 while many believe that older drivers are safer, at least up to a certain age. The drivers most at risk are young males who have passed their test recently and the more mature drivers are less likely to be involved in accidents. However, figures produced by the Association of British Insurers (ABI) show that drivers over 70 are 13% more likely to claim on their motor insurance than those aged between 40 and 50 and the cost of their claims is generally higher. As a result, premiums often increase rapidly, especially when past 60, resulting in inflated costs in later years.

Travel insurance is another area where age can be a big problem. Premiums often start to rise when past 50 and some companies will not insure travellers once they reach 65. According to the ABI, two-thirds of people over 65 have a major pre-existing medical condition, such as breathing problems or heart disease. People of this age are three times more likely to claim on their travel insurance than those aged 35. The figure rises to eight times for those aged 85 when on holiday.

Some companies have a range of pre-existing medical conditions they cover with no increase in premiums. Certain insurance companies actually specialise in providing travel insurance for older people and go well above the age when most companies withdraw cover.

The need for increased premiums and reduced cover has less justification than previously. Some people have healthier lifestyles and advances in medical treatment mean people live longer and better. The health and mobility of those aged over 50 can vary considerably although most insurance companies don't differentiate sufficiently due to the cost of individual assessments.

Home insurance is an area where the over 50s can win. Older people often make fewer claims and so are viewed as a better risk. The message, as for all insurance, is to shop around. Often the best deals are found on the internet and aimed at new customers, so you need to stay alert and change frequently.