Keeping premiums on the level
A retired couple has found a way to keep the premiums on their health insurance level for the rest of their life, making them the envy of the country.
But the case, which has come to light as a result of the work of the insurance ombudsman, is likely to set the phones ringing at their insurer AIA.
Recent months have seen headlines over the punishing rises in health insurance premiums for retired New Zealanders as health insurers move to pass the rising costs of surgery and higher claims on to policyholders.
But AIA has agreed to never raise one retired couple's premiums for the rest of the time they hold their policies thanks to a marketing brochure the couple held on to after buying their policies in 2001.
The brochure stated that there would be "No Premium Increase after age 65" and the policy description document stated "Level premiums from Age 65", but the couple (the man turned 65 in 2004 and the woman in 2009) were hit by a large increase in the policy's premiums in 2010, and then again in 2011.
When the couple queried the increase, AIA advised that the increase was a general company rate increase and not an age- related increase.
The insurance ombudsman's decision noted that: "After discussions with the case manager, [the insurer] agreed to settle the complaint, by reducing the premiums to the level they were at in January 2010 (the year following the complainant's wife's 65th birthday) and refunding the overpayment of the premiums for 2010 and 2011. [The insurer] confirmed that the premiums would remain at that same level for the duration of the policy."
The case seems to relate to AIA's Superior Health Cover insurance which was marketed back in 2000 on its website as having "Level premiums from Age 65 onwards", though by 2007 the marketing brochure for the cover had changed resulting in a rather curious "Level from age 65" with a footnote indicating that the premiums were in fact not level. The footnote read: "Premiums are not guaranteed and may change on notice at any time."
AIA said the complaint "was settled on the specific facts pertinent to that case" and that its current marketing material makes no reference to premiums being "Level from Age 65".
But it continues to use the terminology. In its statement to the Sunday Star-Times, AIA said "While premiums are level after age 65 (that is, they do not simply change on policy anniversary dates), they will periodically increase due to such things as medical inflation."
Sunday Star Times