I advise on PMI schemes for small groups. With many members in their 60s, what do I need to consider as they approach retirement?
Paul Moulton, AXA PPP
Historically, employers have tended to manage employees covered on their company-paid private medical insurance schemes and who are approaching retirement in a relatively straightforward way by offering them an opportunity to continue their healthcare cover as a ‘group leaver’ (that is, without their having to be re-underwritten) as and when they retire.
This is a considerable benefit as it enables them to maintain continuity of cover for eligible treatment of existing medical conditions.
From an adviser’s perspective, the recent abolition of the default retirement age, which is bound to lead to employees extending their working lives, creates an opportunity to review their corporate clients’ approaches to dealing with this in respect of group risk benefits, including healthcare cover.
Many organisations recognise the benefits of retaining experienced, knowledgeable employees for as long as possible.
But with the prospect of people working well into their sixties and seventies, they may be wary of the possibility of these benefits becoming increasingly costly as age profiles in their business increase and, at some point, they may therefore feel they can no longer afford to fund the benefit(s) at all.
Advisers should discuss with clients whether they wish to adopt an unrestricted retirement approach (i.e. without a stipulated retirement age) to benefit provision or, alternatively, continue to a stipulated age, which could, for example, be linked to the State Pension Age.
Additionally, advisers should consider whether anyone retiring from their clients’ company-paid schemes will be able to secure continuing cover as a group leaver and, if they cannot, whether they can facilitate alternative provision.
