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Travel insurance age and health barriers see premiums hiked by up to 4X the cost

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Older people and those with medical conditions are paying over the odds for travel insurance, while some may be priced out of holidays altogether, research reveals.

The travel insurance market is not working for older people, according to consumer champion Which?

Its poll of holidaymakers who took out annual travel insurance in the past two years revealed the average price paid by those declaring medical conditions was £150. This is £54 (56%) more expensive than those without conditions.

In one case, a traveller with well-controlled diabetes said they were paying four times more for insurance compared to what they would pay if they hadn’t have disclosed this information.

As well as health, age is also a factor which pumps up the price of premiums.

Which? revealed the biggest hikes are for travellers aged 75+, even if they are in good health. Here, the average price was £300 which is £118 more (65% hike) compared to those aged 65-74 who pay £182. It is also more than double the price paid by those aged 55-64 (£142).

Older travellers with medical conditions will see even higher insurance quotes.

Pricey premiums

Back in 2021, the regulator, the Financial Conduct Authority (FCA) introduced rules around firms signposting holidaymakers to specialist travel insurers. However, Which? suggested these rules are having a “limited impact”.

Of the 4,000 people polled, six in 10 had either a pre-existing medical condition or a history of one and a third said they had found it difficult to buy insurance in the past three years. This includes expensive premiums, insurers declining cover, as well as issues when it comes to making a claim.

Less than half had tried a specialist directory while those who had were more likely to discover it by chance, or from someone they know than due to a recommendation of an insurer.

Of those with medical conditions, a fifth said this disclosure meant premiums were affordable but ‘very expensive’  – while 8% said if they disclosed their medical condition(s), they were offered insurance – but not at prices they could afford.

Meanwhile 7% admitted to not buying insurance because of the high costs – leaving them without crucial protections should things go wrong.

And the poll also that of the 804 customers who had claimed on their insurance within the past two years, a third had their claim rejected, disputed or only paid in part. Policy exclusions (32%) and pre-existing medical conditions (27%) were the most common reason.

It comes as claims data revealed travel insurers were among the least likely to pay out for customers’ claims. According to FCA figures from H2 2022, only 75% of claims made on single-trip policies were accepted, while 99% of car insurance claims were paid.

The FCA is currently reviewing the effectiveness of travel insurance signposting rules.

‘Barriers to finding cover’

Jenny Ross, editor of Which? Money, said“It’s really concerning that travellers with medical conditions still routinely face barriers to finding the right cover for their holidays.

“Our research has found that awareness of the specialist directories is too low among those who could benefit from them, meaning some travellers could either assume they can’t get cover, decide not to disclose their condition due to price concerns or disclose them and end up paying more than they should.

“The FCA’s new Consumer Duty must mean that insurance firms improve the visibility of their signposting, and be clearer with customers about how their cover could be limited as a result of their pre-existing conditions. The regulator must be ready to take action against firms not following the rules.”

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