Age Related Premium Increases

I got a little note from my private health insurer yesterday. They were kind enough to let me know that our monthly premium was going up from $562 a month to $693 a month. That's up from $465 two and a half years ago.

I'm no math whiz but that looks like a 49% increase to me. At this rate my entire pension will go to health care monthly premiums by the time I qualify for Medicare. In my case the proposed health care reforms are really needed. Here's hoping our elected officials in DC can get something done that works.

In truth, I understand that premiums will rise some over time. That makes sense considering typical rates of inflation and that as one ages they are more likely to require expensive health care. But when you consider that the current rate of inflation is less than 2% annually, a 49% increase over two years is a little excessive.

With Pet Health Insurance we try to minimize premium increases over time and with PurinaCare® everyone gets the same increase (assuming similar pets and locations) regardless of the number or amount of claims they make. Typically, we do it in age related steps. Your premium will not increase for the first five years. So if you insure a puppy at 8 weeks of age his premium will stay the same until he reaches 5 years and 8 weeks old.

 

There is another increase three years later at 8 years of age and a final increase at 10 years of age. That's it, and when you consider that dogs and cats are living much longer these days knowing that the premium will stay the same after a certain point is reassuring.

 

The only other reason you'd see a premium increase is if you move from a less expensive area to a more expensive area. Your premium would go up correspondingly at renewal time. Most realtors can do a cost of living comparison for you to help create an estimate of potential changes. Oh, in the interest of full disclosure there is the possibility that rates would rise across the board for everyone if we decided to raise prices due to inflationary pressures. We don't have any plans for that now and considering that inflation rates are historically low that should remain the case.

 

Most other pet health insurance providers have premium increases at certain times during the life of the pet but they all have their own formula for when and why. You'd expect that, too. If your provider claims they will never raise your premium, I'd be a little skeptical. I might think I was paying too much during the early years when claims are less likely. 

 

Insurance is all about numbers and actuarial risk. I, personally, am more of a pet lover than a mathematician, but we like to be up front at PurinaCare. The more a pet lover knows the better informed they are when the make an important decision. Like whether pet health insurance is right for them.