Travel insurance and relatives age limits

Quick summary for busy readers:

• Deciding to travel when you have elderly relatives has its risks. Having a family member unexpectedly become seriously ill or be admitted to hospital can be extremely distressing, particularly when you're overseas.
• Some insurers offer limited cover and others do not provide cover at all for family emergencies if your relative is 84 or older.
• This means that if your relative is outside the age limit, unfortunately the Family Emergency benefit is unlikely to apply, even if their hospitalisation was unexpected.

 

Regardless of whether you're travelling with your parents or grandparents, or they're staying at home, their age can impact whether or not your policy covers you. This is something that often trips up customers during a highly stressful time.

The tricky part from a customer perspective is that, a hospitalisation or the death of a relative can be unexpected and highly emotional. It's easy to think:

“My 90-year-old mother has been unexpectedly admitted to hospital, so surely that's exactly the sort of emergency travel insurance is designed to cover.”

The insurer's response is essentially that policies are designed and priced to cover specfic events within defined parameters, and the age of the relative forms part of those parameters. This can be perceived as being non-compassionate, however if an insurer is to price for that risk, all policy premiums would increase.

Why do insurers have an age cut-off for relatives not travelling?

Travel insurers generally impose an age cut-off on the “relative” definition for cancellation or trip interruption claims because the risk of a serious medical event increases significantly with age.

There are several reasons behind the practice:

1. It helps insurers manage predictable risk

Travel insurance is priced on the assumption that certain events are unexpected. As people get older, hospitalisation and serious medical events become statistically more frequent and insurers may consider the likelihood of hospitalisation is higher than they want to price for and exclude cover.

**2. Difficult to price for the unknown
**Policies are priced based on the age and medical history of the policyholder, not their relatives. Without a cutoff, the insurer would be taking on risk from someone who isn't actually insured under the policy. This means they could potentially face claims whenever an elderly parent or grandparent is hospitalised, driving up overall prices and making the benefit considerably more difficult to price.

3. Pre-existing medical conditions are part of the risk

Age and pre-existing medical conditions are closely connected from an underwriting perspective.

An insurer may be concerned that if an elderly relative has an existing condition, there is a greater possibility of deterioration or hospitalisation during the traveller's trip. Without an age limit, the insurer could effectively be providing cover for a much higher-risk third party without having individually assessed that person.

 

 

What age limits do travel insurers have in Australia for family emergencies?

There is quite a bit of consistency around an 84 or 85 year age cut-off, but the precise rules differ between insurers. Because age limits and terms vary by insurer and by policy type, we’ve pulled together the current relative age limits, for major Australian insurers below: