Many of the Society's products are priced on an "Age at Entry" basis; "The age you join is the age you stay". The purpose of this section is to explain:
Put simply, the Society's approach means that your premium will not increase solely because you (as an individual) get older, provided that your cover remains unchanged. Your premium is determined by the age at which you joined the Society, rather than your age at each renewal. It does not mean that your premium will not increase at all. Indeed the expectation is that your premium is likely to increase year-on-year because of a variety of factors (see "Factors influencing premium rates" below) and generally at a rate greater than retail price inflation. However, the Society's policy means that your premium should rise more gradually as you get older because it will only move in line with the increases required to keep the plan as a whole on a sound financial footing and not because your age increases.
In general the cost of Private Medical Insurance increases significantly with age and with most insurers your premium would rise more rapidly as you got older.
The Society guarantees that your premium in any future year will always be calculated with reference to the age at which you joined the Society, for as long as you remain a member of the same plan with the same cover (including any optional excess). This means that you will pay a lower premium than an otherwise identical member on the same plan and level of cover, provided you joined at an earlier age. If your plan, excess or level of cover is changed, the Society may change the age on which your premium is based.
The Society does not guarantee the level of premium that you will be charged in future years. Within the constraints set out in the previous section, the Society has complete discretion to alter the premium rates for a particular plan and the Society does not guarantee the level or continuing existence of any discounts that may have been granted in the past.
The Society will be guided by the need to ensure its continued financial wellbeing and to meet statutory levels of solvency. This need will, if necessary, take precedence over the approach outlined in this section.
In general, if the Society considers that the extent of your cover is reduced then you will be allowed to remain on your original age at entry (provided that the plan to which you are transferring is also age-at-entry).
However, if the Society considers that the extent of your cover has been increased then you will normally be "re age-rated", i.e. your new premium will be calculated with reference to your age at the time of the change. In this context the Society may consider any of the following to mean an increase in cover: a change to a plan, or level within a plan, that offers higher benefits, and/or a reduction in the amount, or removal, of an optional excess. This is because the age-at-entry pricing structure that the Society operates relies on an element of pre-funding and cross-subsidy; i.e. some of the premiums that you and other members pay in the early years of your policies will contribute to a reserve set up to meet claims arising in the later years of those policies. However, if you increase your level of cover then the premiums that you will have contributed to the reserve will not reflect the expected future claims under your increased level of cover. Therefore,in order to ensure fairness to other members, the Society "re-age-rates" members when the extent of their cover is increased.
Increases to premium rates are applied on each annual renewal date of your policy. In general the Society will aim to ensure that premiums for each plan and plan level are at least sufficient to cover the expected claims and expenses over the long term. From time to time the Society may decide that premiums need to be lower or higher than this in order to use up or accumulate some of its reserves and to ensure fairness to its members.
The main factors which influence the premium increases are:
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