Would Methuselah be able to get travel insurance?

Article published 16 September 2022

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GETTING travel insurance if you’re older is how you find out that not-feeling-your-age doesn’t count for much outside your own head.

It’s expensive! Even if you look and feel twenty years younger than you actually are, are healthy and run a marathon a month.

It’s not that insurance companies are indifferent to the state of your health relative to your age.

Quotes you get from websites like www.comparetravelinsurance.com.au are subject to medical assessment. This means the quotes that appear on your screen are given assuming you have no medical conditions.

But if you do, the price goes up beyond the quoted price. Unfortunately, what the exact price impacts are of specific medical conditions is not covered by comparison websites.

But even assuming you are in perfect health, travel insurance premiums go up with age.

Just a quick play online produces a quote for someone completely healthy and aged 81 wanting to travel in Europe for a month of $1,320, or $44 a day.

That’s $1,000 more than a fit and healthy 71-year-old would pay.

Take two years off, a 69-year-old would pay about $200, while a 79-year-old would pay $475.

And a 21-year-old pays $135!

A question that CPSA is often asked is whether all this doesn’t amount to age discrimination and whether it isn’t illegal.

The sobering answers to those questions are: ‘yes’ to the former and ‘no’ to the latter.

First, age discrimination is like beauty: it’s in the eye of the beholder.

If you are 21, it’s great. Because you are 21, you pay $4.50 a day! That’s positive age discrimination for you.

But if you are 81, it sucks, as a 21-year-old might say. You pay ten times what they pay. Negative age discrimination.

Age discrimination is often not illegal. It can even be necessary, which is why 4-year-olds don’t drive SUVs, much as they would like to.

Age discrimination legislation is federal law and offers ‘exemptions’ not only for necessary age discrimination but also for reasonable age discrimination.

Insurance is covered by one of those exemptions.

As long as an insurer bases their prices on reasonable assumptions, facts and arguments, they are not doing anything illegal.

The argument in favour of age discrimination in travel insurance is that, as a group, people aged 81 are at significantly higher risk of falling ill than younger people.

For example, for each decade of life after age 55, your chance of having a stroke more than doubles.

With that the travel insurance risk increases. With the risk, the premium increases.

Significantly more people aged 81 die from a stroke while travelling than do 21-year-olds.

And that’s the reason why insurers are allowed to age-discriminate.

They do so savagely once you turn 80, when that month in Europe would cost you $1,000. At 81, as we saw, you pay $1,320.

The good news is that after 81, the premium stays the same in this example. A 100-year-old pays the same as an 81-year-old.

Perhaps insurance companies reason that, if you can get to 100, you are either as fit as a fiddle or that you will have one or more medical conditions for which you will pay additional premium to cover their insurance risk.

Finally, to answer the question asked in the headline, Would Methuselah be able to get travel insurance?

The answer is ‘yes’, but only to age 100. That’s when the quotes stop.

For now.

But with the way life expectancy is going, we might get to 969 as a travel-insurable age one day.

For more information please email our media contact at media@cpsa.org.au

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