More people are travelling in retirement than ever before. According to a new study by Avanti, a specialist travel insurance provider catering for the over-50s market, the number of Europeans aged 65 and over heading abroad every year has increased faster over the past 20 years than the population in this age group has grown. With more free time on their hands, retirees are able to go places they were not able to before, especially if they have combined their pension with the investments they made many years ago that are now paying dividends. There are many opportunities that they can go for, from checking out gold ira companies to seeing how investments in cryptocurrencies can help. Retirees are able to build up their finances in new and modern ways to facilitate their travelling nowadays.
Some possible underlying reasons for this trend might include people finding themselves with more disposable income in retirement, cheaper travel and better health. Nevertheless, the same study found that, amongst those older citizens who did not make it abroad regularly, two factors came to the fore to explain why – money and health. When they do, they often plan on staying there for a while and tend to apply for a residency permit. Because of financial constraints, retirees often move to warm, sunny places like Spain, Mexico, Portugal, etc., where living expenses are affordable and the weather is pleasant. A person planning to retire to Portugal, however, should know that they would need a D7 visa to stay in the country. They can take a look at this Portugal D7 visa blog post by Where Can I Live or similar articles to get a clear idea of the visa requirements and formalities that would be required.
Looking at trends across the globe, the study found plenty of variation in how these two played out from country to country. As a general trend, over-65s from European countries and even Asian countries (such as Germany, Spain and France) were less likely to see money as an obstacle to travel, whereas in places like Bulgaria, Hungary and Greece, finances were the most common reason given for not traveling abroad.
The UK presented an interesting case – two in five (41%) pensioners who hadn’t been abroad in the past year said it was because they couldn’t afford to, while only 12% cited health. In Germany, Spain, France, Greece and Bulgaria, around a third of elderly people said health was the main reason for them not travelling overseas.
Cost of insurance
The survey did, however, find close to unanimous consensus as to what constitutes the biggest worry for older travellers when they head abroad – 85% of people over 65 said the cost of travel insurance. And travel insurance becomes problematic because providers judge that older people are more likely to claim medical treatment when they travel as a result of less robust health. The same is true for other types of insurance. For example, mortgage protection insurance (MPI) may be unavailable after a certain age. Some insurers provide 30-year mortgage life insurance to applicants 45 and younger, but only 15-year policies to those 60 and younger. However, because this type of policy is typically sold without underwriting, it is best suited for people who do not qualify for term life insurance due to poor health.
The main issue for older travellers, however, is that even when they have no specific health complaints to declare to an insurance provider, too many firms will penalise them anyway with greatly inflated premiums. The pattern is that, past the age of about 60, mainstream providers will simply apply automatic year-on-year price hikes based on age alone, and the size of the increases accelerates as you get older.
However, when older people have insurance, like life insurance, they receive numerous benefits- such as they don’t have to worry about medical expenses, it might also supplement their retirement savings, and so on. Furthermore, it is up to them as to what to do with life insurance money. If they are unsure, they can consult a financial advisor, who might help them explore what goals they want to achieve while also balancing any debt they might have. In a nutshell, money brings opportunity, so how you spend it ultimately depends on what opportunities in your life you’d like to capitalize on to continue moving forward in the best way possible. For example, they might want to travel, or they might want to invest in something or anything else.
Talking about the travel insurance, by the time they hit their 80s, travellers can often be paying six times the amount for their travel insurance that someone in the 50s would be charged for the same policy, even though the average difference in the size of claims is probably only half that. It means that older travellers can reach a point where the cost of insurance means they can’t afford to travel at all, even though they are in perfectly good health.
Avanti advocates putting aside automatic premium increases by age altogether, and instead basing costs entirely on the personal circumstances of the individual. To read the report in full, view here.