As you get older health insurance premiums can get very expensive. When should you cancel your cover?
Insurance is expensive because the older we get the more we start to fall apart. I speak with experience. We get older and our bodies disappoint us. I go to bed at night reluctantly because it’s uncomfortable to lie on one side because of a sore shoulder and I frequently get cramp. Neither of those conditions qualify for a health insurance claim but I never used to go to bed in discomfort. When I wake in the morning one of my fingers is so sore from arthritis that I wonder if I’ll be able to do my piano practice. How bad will my fingers become? Will I need knuckle replacements? That would be a health claim……I walked 9.5 km one day and the next day I walked with a limp from a sore hip and my knees ached.
I was saying to Richard this morning that I never thought about the big pack I carried on my back when I tramped in the Tararua Ranges in my 20s, nor did I think about lugging very heavy Scuba gear around Makara, including a belt of lead weights to help me sink. Fat people need a lot more lead than skinny people because fat is buoyant. I’d struggle with those strenuous activities these days. I consider myself a ‘normal, 68 year old but in my early 50s my insurance provider paid out a fortune for the various surgeries I had for an aggressive cancer. When you are diagnosed with that condition you want treatment ‘now’. Especially if you’re told you have a very fast growing tumor but it can be difficult to get the treatments you need expeditiously, especially post Covid.
If our hips, knees and knuckles, don’t need to be replaced and we don’t need operations for cataracts……we have our organs to consider: A colonoscopy? cancer? polyps? sit on a waiting list for months while a potential tumor is growing? We have a 68 year old client who needs a brain aneurysm repaired. She can’t get this treatment privately. It can only be done in public hospitals in NZ. If she traveled to another country – the risks of picking up Covid-19 could outweighs the risk of postponing her surgery.
In summary; we get older, our bodies let us down. Old people are expensive to maintain and the insurance companies pay a lot more in claims. They therefore have to charge a lot more in premiums.
I recall a former broker manager (now retired), who represented a major health insurance provider, saying to me that the best thing a client could do, to ensure the profitability of health insurance providers, was to cancel their insurance when the premiums become too high because that’s usually when are old and likely to claim. Cancelling a policy at the time in your life when you are most likely to claim is the ideal scenario for you to add the most value to the insurance companies profit margin. It’s far from ideal for the policy holders.
Insurance companies notify me when claims are paid to clients. The older policy holders are the ones who submit the most claims and those people make a lot of them! If you’ve only had small claims in the past that doesn’t mean you won’t have bigger ones in the future and your savings from not paying monthly health insurance premiums will not go far towards the costs of some surgery that could cost tens of thousands of dollars.
It is what it is. Insurance becomes more expensive as you age because you are more likely to claim and advances in medicine enable health providers to offer very expensive treatments and medicines that sadly cannot always be offered to the majority that doesn’t have health insurance. It’s wrong but that’s how it is. New Zealand is not a wealthy country. We can’t afford to provide the best treatments to everyone. Here’s an example: I talked with a man in Alaska who said he was studying to become a nurse and he planned to specialise in anesthesiology. This would pay him an annual salary of USD$350,000 – for a nurse. Salaries don’t work like that in NZ. The IMF International Monetary fund advised that NZ is spending more than it can afford (I could have told the Government that).
I’m both an ‘elderly policy holder’ unhappy about paying our high premiums of more than $200 per week, and also an insurance broker. I see both views clearly. If you have insurance ask me to review it. Maybe we can tweak your premiums down. If you don’t have insurance ask me to prepare a quote for you.
Author: Alison Renfrew