How Does Age Affect Medical Insurance?
The older you get...
Medical Insurance Premium Costs by Age
Medical insurance costs are affected by age in a few different ways. Here’s some more in depth insights into why, how and what age does to the cost of your medical insurance.
Why does age affect medical insurance costs?
Age will significantly impact the cost of your medical insurance premiums. As you age, the likelihood of requiring medical care increases, therefore leading to higher insurance costs.
Insurance companies will view older policyholders as higher risk, which is reflected in the premium pricing. As age increases, so does the risk, leading to higher premiums.
Why does this happen?
Insurance companies use age as a key factor in determining premiums. Simply put, this is because older individuals are more likely to require medical needs. The insurance providers don’t want to always pay out, or else they go broke. I’ve covered this in more details in a blog on why healthcare is expensive here.
The older you get, the higher chance of requiring medical help and the more they will need to pay out. This includes everything from routine check-ups to more serious conditions that require hospitalisation. The cost of providing for these needs is reflected in the premiums charged.
Key points:
- Older individuals statistically have more medical needs, which translates to higher insurance costs.
- Age is used as a measure of risk. Higher age equals higher risk, which equals higher premiums.
- Insurance companies rely on extensive statistical data showing that the likelihood of claiming increases with age.
How much does age affect the cost of medical insurance?
Age does significantly influence the cost of medical insurance. The difference in premiums between age groups can be quite substantial (and obvious). This difference in price is reflecting the increased risk and potential need for medical care as one ages.
Is there a big difference?
Yes, there is a notable difference. For instance, any individual aged 10-20 may pay premiums ranging from around $750 to $1,500 annually. On the other hand, if you are aged 60 and above then you could see premiums exceeding $10,000 annually. This is certainly a stark contrast, and highlights how age is a critical factor in determining insurance costs.
Key points:
- As you move from one age bracket to another, you can expect your premiums to increase, sometimes significantly.
- Insurance companies may base their pricing on statistical data. It usually shows a higher likelihood of older individuals needing medical care.
- Understanding the impact of age on insurance costs is essential for effective financial planning and budgeting for healthcare expenses.
Average Cost Of Medical Insurance By Age
As you likely know, the cost of medical insurance increases as you get older. So here’s a lovely table showing you a breakdown of the average cost of medical insurance every year by age brackets.
Age Group | Average Cost of Medical Insurance (Annually) |
10-20 | $750 – $1,500 |
20-40 | $1,500 – $5,000 |
40-60 | $5,000 – $10,000 |
60+ | $10,000+ |
Maximum Age Limits For Medical Insurance
Did you know that there is usually a limit to how old you can be to get covered? That means when you go over that limit, you may not get covered anymore. What do I mean by all of this? I’ve broken it all down for you here.
What is the maximum age limit?
Most insurance providers will put a cap on the age limit they will cover you until. This is quite common, and is even what we do as well. The maximum age limit for new applicants to be eligible for cover with us is up to the age of 70. This means individuals can apply for a new or renew their policy until they reach this age.
What can you do after you reach this age?
If you get to 70 years old and you’re already covered then you should review your policy terms to make sure your coverage is still active. If you are not being covered, and you want to be covered, then you can explore some more specialist insurance providers.
Also, look into government or community health programmes which can help cater for the needs of older individuals and can be a very effective medical coverage solution without a big cost.
Why are there maximum age limits?
I think we’ve said it before, but maximum age limits in medical insurance policies are set based on risk assessment and statistical data. As individuals age, the likelihood of needing medical care increases, which in turn raises the risk for insurance providers.
These limits help manage the financial risk associated with offering coverage. That way, insurance providers will not go bankrupt.
Key points:
- Insurance companies set maximum age limits to manage the risk associated with higher medical costs for older individuals.
- Age limits are based on data showing that older age groups are more likely to claim, leading to higher costs for insurers.
- By setting age limits, insurers can more accurately price policies for different age groups, ensuring the sustainability of their offerings.
Benefits of Medical Insurance for Young Expats
It’s likely better to get your medical insurance coverage early, and I’m not just saying that because I’m being biassed. Seriously, it’s true. Let me explain to you in detail why here:
High coverage limits
What does this mean for young expats?
For young expats, a high coverage limit means that the insurance plan can cover a substantial amount of your medical costs, up to millions of dollars per year.
This ensures that if there is an emergency or the need for any significant medical treatment, the insurance company will pay it up to their limit.
E.g. Our insurance plans cover you up to $1,000,000. This means we will only stop paying your medical bills when we have already paid out $1m worth.
Why is that important?
This is crucial because medical expenses, especially in foreign countries, can be unexpectedly high. High coverage limits protect you from incurring large debts due to medical emergencies.
Instead, you can focus on your work and life abroad without the constant worry of healthcare costs.
Key points:
- High coverage limits offer a safety net against the high cost of medical care, ensuring young expats are not overwhelmed by medical bills.
- Knowing they have comprehensive coverage allows young expats to live and work abroad with less stress about potential medical expenses.
- High coverage limits often come with the flexibility to receive treatment in multiple countries, which is ideal for expats who travel frequently or may move between countries.
Comprehensive coverage
What does this mean for young expats?
Comprehensive care means that you as a young expat have access to a wide range of medical services in your insurance plan. This can typically cover things like inpatient care, surgeries, emergencies services, and outpatient services as well. You will be protected against a wide range of health issues when you are overseas.
Why is that important?
Well, it’s super important because living overseas can sometimes lead to new and unfamiliar health risks. Especially when you are in low economic countries.
Places like Thailand and Mexico might bring around new types of illnesses or risks such as car crashes into your everyday life.
Being covered by all of these means your costs are low and fundamentally, you have a very effective medical insurance plan.
Key points:
- Comprehensive coverage protects against a wide array of medical situations, from minor illnesses to major surgeries.
- It ensures access to quality healthcare services, which might be expensive or difficult to obtain without insurance.
International insurance
What does this mean for young expats?
Simply put, you’re covered globally. All around the world. This is perfect for digital nomads and expats living overseas. We do actually have our own nomad insurance specifically for this.
This type of insurance is designed to meet the healthcare needs of individuals living or working abroad, offering you continuous coverage across borders (We cover every country excluding the US).
Why is that important?
Freedom. Chance for you to easily relocate without the stress of thinking about buying new medical insurance or more coverage. This is particularly important for digital nomads who might find themselves overseas very regularly.
In short, it provides peace of mind and security for you, knowing that your health is protected globally.
Key points:
- International insurance offers coverage in multiple countries, making it ideal for expats who travel or move frequently.
- It ensures continuity of care, allowing expats to receive treatment according to a consistent standard, regardless of location.
- This type of insurance eliminates the need for multiple policies, simplifying healthcare access worldwide.
Wellbeing services
What does this mean for young expats?
Wellbeing services in a medical insurance plan refer to preventive care and health improvement benefits. This can include things such as annual medical check-ups, vaccinations, and mental health support (This is a big one that’s very important).
So, this means you will have access to services that help maintain and improve your health, not just treat illnesses. This is a game changer for your future.
Why is that important?
Preventive care is crucial for early detection of any underlying health issues you may have and maintaining your overall health. Keeping on top of your health can significantly impact your quality of life abroad.
Access to therapies and mental health support is also very important overseas and can make a significant difference in your overall health and wellbeing.
Key points:
- Wellbeing services focus on preventing illnesses through regular check-ups and vaccinations.
- These services often include programs to improve mental and physical health, crucial for adapting to life in a new country.
- By preventing serious health issues, wellbeing services can lead to long-term cost savings on healthcare.
Global security features
What does this mean for young expats?
Global security features in your medical insurance plan refer to the inclusion of benefits that address risks associated with things like terrorism, hostage situations, hijacking, and mugging.
For young expats, this means your insurance coverage will extend beyond traditional medical care to provide you with support in high-risk or unexpected security situations while you are living or travelling abroad.
Why is that important?
This aspect is crucial because as a young expat, you might often find yourself in diverse environments which may carry higher security risks. The nature of your global lifestyle can expose you to situations that are not typically covered by standard medical insurance, or travel insurance in that case.
Key points:
- These features offer protection in scenarios that go beyond health issues, ensuring young expats are covered in a wider range of situations.
- Knowing that they have support in potentially dangerous situations can provide significant peace of mind to young expats living far from home.
- Global security features often include access to dedicated support teams for advice and assistance during security incidents, enhancing the expat’s ability to navigate these challenges effectively.
Affordability
What does this mean for young expats?
Affordability is everything in this world, especially after COVID and the cost of living increasing a significant amount. The cost of your medical insurance is super important because it means pretty much everyone can afford to have comprehensive health coverage without it putting them into financial risk (or costing an arm or a leg).
Why is that important?
If medical insurance was not affordable, likely none of the younger generation would buy it. This would mean their preventative care is much worse, and likely cause them more issues in the future and leave them even more out of pocket or paying for stupidly expensive insurance prices.
It’s like a snowball effect. This is why affordability is so important. It also allows young expats to relax and get peace of mind knowing they are covered comprehensively without breaking the bank.
Key points:
- Affordable insurance plans ensure that young expats have access to healthcare services when needed, without the stress of high costs.
- By choosing an affordable plan, expats can protect themselves against unexpected medical expenses that could otherwise deplete their savings.
- Knowing they have medical coverage that is both comprehensive and affordable provides young expats with peace of mind, allowing them to focus on their overseas experience.
Direct payment to hospitals
What does this mean for young expats?
Direct payment to hospitals means that the medical insurance plan (like ours!) pays the healthcare provider directly for any medical treatment received by you. For young expats, this feature eliminates the need for you to pay out of pocket at the time of treatment and then wait for weeks until reimbursement from the insurance company.
Why is that important?
Waiting for funds can be a pain for anyone. In emergency situations or when you are facing significant medical expenses, not having to upfront the cost can relieve financial stress and allow you to focus on your recovery.
Key points:
- Direct payment simplifies the process of receiving medical care, especially in emergency situations.
- It provides financial relief by eliminating the need for expats to cover large medical bills upfront.
- Knowing that medical expenses will be directly settled between the hospital and the insurance company offers peace of mind, reducing stress in already challenging situations.
Age Considerations In Travel Insurance Vs Medical Insurance
We all know there are some big differences between the coverage on medical insurance and travel insurance, so does that apply to age as well? It sure does. Here’s more details on that matter below.
Are there any limits?
There is definitely a big difference in age appreciation and coverage between medical insurance and travel insurance. When it comes to travel insurance, the age limits are usually much more restrictive. They will often have higher premiums with older age groups and I’ve even heard of outright denial of coverage for some.
They usually have a cut off age of around 60-65 depending on the travel insurance provider. Medical insurance is much more effective for older individuals anyway due to it’s more comprehensive coverage.
What is better?
Well, you only need to understand which coverage you get from both of these to see the clear winner. Certainly for older individuals, the coverage of outpatient care is going to be extremely important.
You may get a more clear answer to this question by reading my other blog on what travel insurance covers here. But overall, you will be very limited with travel insurance as it’s literally designed for ‘travel’ not living.
Renewing Your International Medical Insurance as You Age
If you are at the point where you need to renew your medical insurance, you may want to prepare to face a few challenges (naturally, like everyone does) along the way. I’ve broken down all of these challenges and provided a solution below. Check out these two blogs here:
https://medicalfornomads.com/does-travel-insurance-cover-medical-expenses/
https://medicalfornomads.com/what-does-medical-insurance-cover/
Challenges you might face
Increased premiums
What is it?
This means you will need to pay more when you renew your medical insurance each month or year whichever plan you are on.
Why is it a challenge?
Any added cost to you can prove a struggle and add financial burden to your lifestyle. This is why it’s important to get the best deal possible.
Solution
To manage increased premiums, consider adjusting your coverage to match your current health needs more closely, potentially lowering costs.
Pre-existing conditions
What is it?
Pre-existing conditions are health issues that you may have got recently diagnosed before renewing or starting a new medical insurance policy.
Why is it a challenge?
Because of the high cost, many insurance companies will not cover those with pre existing medical conditions, and if they do cover, it’s at a very high price.
Solution
Consulting with an insurance specialist can help you uncover discounts or plans specifically designed for individuals with a pre-existing medical condition.
Reduced options
What is it?
As you age, the number of insurers willing to offer you coverage decreases, leading to reduced options for international medical insurance.
Why is it a challenge?
This reduction in options can make it harder for you to find a policy that fits your needs and budget, especially if you’re looking for comprehensive coverage.
Solution
To combat reduced options, start your search for renewal early and consult with multiple insurance brokers who can access a wide range of insurers and plans.
Selecting the Right International Medical Insurance For Retiring Abroad
If you’re ready to start selecting the best medical insurance for your age right now, based on retiring overseas then I’ve got some very important information and advice for you. Here’s everything you need to consider…
Understanding the healthcare costs in your chosen country
What to look for
As an expat you need to make sure you are covered in your country, for routine care and preventive care, and all major medical healthcare coverage. The healthcare in your chosen country could be cheap, or very expensive compared to where you live.
Understanding what you need to be covered for is very important and will allow you to forecast and predict what you will use more than not. Also you may remove some things (not recommended) from your policy if the healthcare is cheap in your country of residence.
Key features
- Outpatient care
- Inpatient care
- Therapies
- Psychology
- Physiotherapy
- Dental
- Vaccinations
Knowing your activities and coverage requirements
What to look for
Just understand and know your lifestyle and the activities you plan to engage in. If you know you are very adventurous then consider getting a more comprehensive plan. If you are just going to be relaxing on the beach or at home, maybe you are at less risk.
Key features
- Inpatient care
- Outpatient care
- Eye tests
- Dental
- Chronic conditions
- GP consultation fees
- Kidney dialysis
- Surgery fees
Choosing something comprehensive over cheap
What to look for
While it’s always tempting to go for the least expensive option, just remember it’s crucial to prioritise the scope of your coverage. Ideally, you should look for plans that offer extensive medical coverage, including preventive care, chronic conditions, and emergency services.
Key features
- Inpatient care
- Outpatient care
- Eye tests
- Dental
- Chronic conditions
- GP consultation fees
- Kidney dialysis
- Surgery fees
- Therapies
- Psychology
- Physiotherapy
- Vaccinations
Conclusion
As we age, our likelihood of needing medical care increases. We all know it to be true. This, in turn, raises our insurance premiums and the cost of our healthcare.
It’s clear that getting insured early can not only offer us better rates but also ensure we have the necessary coverage when we need it most. Understanding the impact of age on insurance costs is crucial for effective financial planning and securing the right coverage.
Remember, knowledge about how age affects medical insurance empowers us to make informed decisions, ensuring we’re adequately protected throughout our lives.
Stay safe, stay protected. Your health is your wealth.
