When you think about your retirement, the first thing that springs to mind is probably your pension. You may have taken out a private pension or have been automatically enrolled in a workplace scheme. However, other types of insurance can provide additional protection, so you're covered whenever you choose to retire.
There are life insurance policies designed for retirees. These can provide a lump sum for funeral expenses or be left to your loved ones. It can also provide an income for any family that you leave behind.
Income protection insurance can provide you with a replacement income if you need to start your retirement earlier than planned and don't want to start taking your pension early.
Finally, health insurance for retirees can help you get medical treatment when you need it. You're more likely to need medical treatment as you get older, so a health insurance plan will enable you to receive private treatment quickly and maintain your quality of life as you get older. It's particularly relevant if you're considering retiring abroad where you won't be able to receive NHS treatment.
You may never have considered private healthcare in the past simply because you've always been able to access treatment via the NHS. However, the COVID-19 pandemic has caused a backlog in the provision of elective treatments, which are likely to take years to resolve. The BMA has analysed the data and found that there are worrying delays in the provision of both urgent and non-urgent care. There's also concern about a hidden backlog, as it's likely that some people have put off going to their doctor because of the pandemic.
The number of patients waiting for more than 12 hours in A&E is twenty times the number it was pre-pandemic. The guidelines for cancer treatment say that a consultant should see 93% within two weeks of a GP referral. However, this standard hasn't been met since May 2020.
The picture is even bleaker if you need a hip replacement, cataract surgery, or other non-urgent surgery. GPs are reporting that it's more difficult for them to make referrals. A recent Parliamentary report found that guidance on waiting times wasn't being met before the pandemic, and figures have dropped even further since. Whilst you may have a condition that isn't classed as urgent, it can still affect your quality of life.
One of the main benefits of private healthcare is that it enables you to receive superb medical treatment quickly so that you can get back to enjoying your life without spending time on an NHS waiting list. If you need surgery, you can choose the hospital you'll attend and decide which consultant will carry out the operation. This could be crucial if your condition will benefit from early intervention. Many NHS surgeons also practice privately, so you could see the same consultant more quickly.
You can also opt to self-fund private consultant appointments and diagnostic tests and scans to speed things up, even if you ultimately decide to wait for NHS treatment. When you choose private healthcare, you'll also benefit from a private room, one to one nursing care, and there's often more flexibility around visiting times. Private healthcare companies also tend to invest heavily in new technologies and treatments, so you may be able to access drugs and treatments that aren't available on the NHS.
You can pay your private healthcare costs in three different ways:
- Health insurance
- Self-pay from savings
- Medical loan
1. Private medical insurance
When you take out private health insurance, you can choose the cover that works for you. You could opt for a comprehensive policy that will mean your private healthcare costs are covered or choose more tailored health insurance so that you can access treatment for specific conditions. If you have health insurance and need treatment, you simply call your insurance company to make a claim, and they'll advise you on the process from there.
If you already have a diagnosis and don't currently have health insurance, you won't be able to get insurance coverage for that condition and anything related to it. Private insurance companies automatically exclude any pre-existing conditions from your policy.
2. Self-pay from savings
If you don't have health insurance, you can still access private treatment by going directly to a private healthcare company. You simply arrange private treatment with the hospital and settle their invoice yourself by dipping into your savings. This means that you can choose to go to a convenient hospital for you and that you're comfortable with providing your treatment.
Most hospitals will give you a fixed price quote for the treatment you need, so you know exactly how much you'll be spending. That could include your initial consultation, anaesthetist's fee, nursing care, rehabilitation and medication, and the surgery itself. It's essential to shop around as different health care providers will offer different service levels within their fixed quotes. Some include aftercare at no additional charge, whilst others won't provide it, preferring to let your GP look after you once your surgery is complete. Some providers also allow you to opt for treatment in an NHS hospital, which can be cheaper.
3. Personal medical loan
You can still access private healthcare even if you don't have health insurance or the funds to pay for private treatment in one lump sum. You could choose to get a loan from your bank or another loan company. Many private health care providers have partnerships with private finance providers who offer specialist personal medical loans. The important thing is that you choose an affordable loan for yourself.
To give you an idea of the kind of terms you can expect, Nuffield Health's approved provider offers a 0% interest loan if you repay it over 6 to 10 instalments, with 9.9% APR if you need longer. Spire's finance partner, Omni Capital Retail Finance, offers similar terms, with their loan being interest-free for the first ten months, then 9.9% APR with a repayment term of 1 to 5 years.
Health insurance involves paying a monthly premium so that you can get private treatment with your insurer covering the costs. You can opt for different levels of coverage based on your individual needs, and the amount of cover provided will be reflected in your premium. All insurers have a core cover package with treatments and therapies included as standard. They'll also offer a range of optional extras that vary depending on the company. Some also allow you to add your family at a reduced cost so that you can get the same benefits for your spouse or children and yourself. You could also opt for an NHS cash benefit policy that gives you a cash payment if you need to spend a night in an NHS hospital or receive treatment. You can spend this on anything you like, including any out of pocket costs you have due to your hospital stay.
Retiree health insurance can attract a higher average premium as you're more likely to need treatment as you get older, so your insurance company will see you as a higher risk simply because of your age. However, if you have a family history of cancer or hip problems but haven't yet had a diagnosis yourself, it's worth taking out insurance to ensure you can get prompt treatment when you need it. If your former employer provided you with a private health insurance policy, it's worth looking at whether you can take this over, keep the same benefits, and pay the premiums yourself during your retirement, as this may cost less in the long term.
What does a health plan cover?
The core cover that each health insurance policy offers can vary depending on the insurance company you choose. However, all policies cover inpatient and day-patient treatment, so you can access care if you need to stay in a hospital overnight or be treated in a day-patient unit. Outpatient care is often only offered as an optional extra; you'll need this if you want your health insurance to cover many diagnostic tests and scans. Many policies will also include therapies such as physiotherapy and chiropractic treatment as part of their core coverage. Every health insurer offers cancer care, with some including it as standard and others providing it as an add on. Some policies also include access to other services, for example, telephone helplines or 24/7 GP services that you can access online.
You can also opt to add coverage for things like dental and optical care, which can cover regular check-ups and glasses and contact lenses in some circumstances. This could be a valuable benefit if you want to make sure your teeth stay healthy as you age or if your prescription lenses need changing each time you visit the optician.
What doesn't health insurance cover?
Health insurance only covers acute conditions that can be resolved with a course of treatment. If you have a chronic condition that can only be managed rather than cured, your health insurance won't cover it. This includes conditions such as diabetes, asthma or angina. If you already have one of these and your GP is managing it, your health insurance company will also exclude any treatment you need due to those conditions. This is because every policy excludes any pre-existing conditions. It could be something you have when you take out the policy or anything you needed advice or treatment for in the five years before that. However, said conditions may not be a permanent exclusion; if you haven't needed treatment for any pre-existing condition within the first two years of your policy, your insurers may be willing to add cover for the future.
Exclusions can also include certain types of treatments or drugs. For example, if you've been treated for cancer and are in remission, some treatments can help you maintain this - however, these are unlikely to be included. Unlicensed or experimental treatments are typically excluded along with preventive care and treatments.
Each insurer has its own list of exclusions. These can be lengthy, so it's essential to check the details to ensure you're getting the cover you need. It's worth thinking about your family history and any conditions you may be at particular risk of developing in the future. Most health insurance policies will typically exclude the following:
- Treatments for addiction
- Cosmetic surgery or other purely cosmetic procedures
- Pregnancy and maternity cover (this is unlikely to affect you as a retiree, but it's worth bearing in mind if you choose to add any adult family members to your policy)
As a retiree, you may find that your health insurance options are limited. Many companies put age limits on their cover, preventing you from getting medical insurance once you've reached retirement age. That doesn't apply to these three insurers who all offer health coverage to retirees.
The Exeter is a friendly society and the only provider that offers the option of a community-rated scheme to people between the ages of 70 and 80. A community-rated scheme is one where your claims don't directly impact your renewal premiums. Instead, it's the claims of all of their members which affects any annual increases. For older people, this is particularly beneficial as a community-rated scheme effectively spreads the risk across many people rather than individuals carrying the burden. Of course, this isn't to say your premiums won't rise as you age, they will, but your claims won't have a direct impact.
The Exeters' core coverage includes outpatient surgery, cancer treatment and mental health care, and a good range of optional extras. They're among the highest-rated companies for customer satisfaction and making payments, which is crucial if you don't want to spend your retirement on the phone with your insurer.
AXA Health offers generous cover with no upper age limits, so you can get health insurance from them at any stage of your retirement. They offer you access to 250 private hospitals across the UK, so you should be able to find suitable health care services close to home. They offer inpatient and day-patient care as standard. While their outpatient cover is an optional extra, it's excellent and worth adding to your policy. In particular, there's no limit on the number of physiotherapy or chiropractic sessions you can have. This could be a real bonus if you're looking for an active retirement.
Bupa is well known as one of the UK's largest healthcare providers. Their comprehensive health insurance plan includes an impressive range of treatments and therapies that you can access in an extensive network of private hospitals and treatment centres. There are no upper age limits on their cover. They can help you save money with a range of discounts and rewards exclusive to their members. Their website also includes helpful links to advice and information to help you stay healthy. This includes information on specific conditions, mental health advice and healthy eating.
It's essential to do your research before you buy medical insurance, as different insurance services include (and exclude) other things. Start by thinking about the coverage you need and comparing what each company offers. When you've got a clear idea of the options available, review these based on your needs and the cost involved.
Contact your chosen company to arrange your policy when you've made your choice. Depending upon the type of underwriting you choose, they may ask you to complete a questionnaire providing details of your medical history. Then you simply start paying your monthly premiums.
Over 65's can usually expect to pay more for private health insurance than those under 65 with age playing a key role in the cost of a policy, but what other factors affect the cost of your retiree health insurance?
- Medical history - treatments of conditions you've had in the past will likely affect your premiums
- Underwriting - the choice of underwriting is usually a significant factor in determining the price of a policy
- Policy excess - the amount you're happy to contribute towards the cost of treatment at the point of claim
- Hospital access - depending on your location, accessing certain hospitals will increase or decrease your premium
- Smoking status - as we know, smoking is bad for us so if you're a smoker the cost of a policy is likely to be higher
- Optional extras - dental, optical and mental health coverage
These are just a few examples and it's likely that your health insurance broker will discuss many more factors which will have a direct impact on the cost of your policy.
What are the benefits of speaking to a broker?
Brokers are regulated and know the ins and outs of each insurance policy to offer you tailored advice based on your needs and circumstances. Doing your own research is excellent; however, it can be time-consuming. There's also the fact that many insurance services don't publish the small print on their websites.
At myTribe, we provide you with unbiased information to allow you to do your own research. We'll also give you a comparison quote and put you in touch with a high-quality, regulated broker who can give you specialist advice.
Health insurance premiums for retirees can be expensive. Here are a few ways of reducing the cost of your premiums.
1. Increase the policy excess
Like your car insurance, you can include a policy excess on your health insurance. It works the same way; when you need treatment, you make a payment for the excess amount yourself, and then your insurer deals with the remaining costs.
2. Review your policy every year
Each year, you'll get a renewal quote on your health insurance, which allows you to shop around, particularly if any additional cost isn't affordable for you.
3. Haggle with your provider
Staying with the same insurer can be a good idea, particularly if you're partway through a moratorium period or have had treatment in the first year of your policy. There are ways to transfer your existing benefits to a new policy, but if you'd rather avoid the hassle of switching, it's worth seeing whether you can reduce the cost of your renewal premiums first.
4. Remove some of the optional extras
If your quote includes optional extras, it's worth taking a few off to see how this affects your premiums. For example, you might be covered for dental or optical care or even have travel insurance included as part of your coverage. This won't apply to early retirees, but you may qualify for free or reduced-cost dental treatment or eye care when you're retired.
5. Choose guided consultants
One of the benefits of private health insurance is that it gives you an impressive choice of services and treatment options. You can also have a virtually unrestricted choice of consultants. However, you can opt to choose from a smaller selection of consultants who've agreed to favourable terms with your insurer in return for a reduction in your premium of approximately 20%.
6. Reduce or remove outpatient coverage
Outpatient coverage is typically offered as an optional extra, and it can add quite a lot to your premiums. Removing outpatient coverage can dramatically reduce your premiums. You're far more likely to claim for hospital tests and scans to reduce the amount of time you spend waiting for a diagnosis, so the premiums are higher to make sure that the insurers' costs are covered. You can also reduce your cover limits if you still want some outpatient care to be covered.
Frequently Asked Questions
How do I get health insurance when I retire?
The easiest way to get health insurance when you retire is to speak to a health insurance broker. They will be able to help you find the best policy for your circumstance and ensure that you understand any limitations of policies.
Who are the best health insurers for retirees?
The best health insurers for retirees are:
- The Exeter
- AXA Health