Why is Health Insurance Cheaper When You’re Under 35?

You may have heard the old Chinese proverb:

The best time to plant a tree was 20 years ago. The second best time is now.

The Health Insurance Authority could appropriate this proverb if their current “the longer you leave it, the more expensive it gets” tagline doesn’t achieve the desired response of buying health insurance before you’re 35.

They’re certainly spending enough dough on the ads; they’re never off the radio.

And good luck to anyone using their website to compare health insurance plans. If you think life insurance is confusing, Holy HIA Batman, have a lash at their comparison tool.  ?

When should you buy Health Insurance?

The best time to purchase health insurance was before you turned 35. The second best time to purchase health insurance is today.

In other words, the longer you hold off buying it, the more expensive it gets, and there is nothing anybody can do to help you get it cheaper (unless you know a wild-haired doctor who drives a stainless steel car).

You’ll have heard that radio ad and thought, yep, I’ll look into that immediately, after a bit more doom scrolling.

So here am I, your health insurance hero, to do the hard lifting for you.

You’re welcome.

The dealio here is that the older you get, the more likely you will get sick and need to make a health insurance claim. Look, as much as we don’t like thinking about it, the older we are, the closer we are to shaking hands with the cap’n of the River Styx boat, and unfortunately, an illness usually precedes that final journey.

So when I tell you that the best time to get yourself into the health insurance game was yesterday, it’s me telling you it’s not getting any cheaper.

And if you don’t purchase today, it’s only going on up.

But by how much?

Explain the Lifetime Community Rating (in plain English)

I’m glad to report the HIA has made this plain as day, no confusing shenanigans like on their website.

The increase is 2%.

Per year.

That’s right, for every year you don’t have health insurance, that first-time buyers quote increases by 2%.

Every. Single. Year.

The rationale behind the Lifetime Community Rating is to entice you to take out cover when you’re younger and less likely to claim. Under this system, a 40-year-old who has had health insurance since 30 would pay the same premium as a 30-year-old. But a 40-year-old buying for the first time would pay a lot more.

Okay, I know what you’re thinking. 2% isn’t that much but consider this:

At 35, it’s 2% but fast forwards to 37, and it’s now 2%+2%+2%= 6%, and it doesn’t quit.

The maximum loadings increase is 70%. Nice of them to cap it, but by golly, 70% is knee buckling.

Don’t fear; while they lump onto the old and wrinkled, they reward the young and beautiful.

If you get your health insurance before the age of 25, you could get a reduction! Wahey for being a young’un (then again, around zero 25 years olds in Ireland have health insurance).

More detail from the HIA horse’s mouth here: https://www.hia.ie/consumer-information/lifetime-community-rating-explained

What is a Health Insurance loading?

Anyway, these increases I’m banging on about are called loadings, and these loadings don’t kick in until you hit the grand old age of 34. So between the age of 25 and 34, most insurance costs are fairly balanced across the board.

However, once you take out a health insurance policy over the age of 34 (i.e. 35 to avoid confusion), the insurer will increase your premium by 2% for every year you are over 35. (I couldn’t figure out a simpler way of putting that, I’m sorry…I really tried!)

But, and this is a biggie, these loadings are applied for a maximum of 10 years.

Health insurance loadings differ from life insurance loadings.

Does Life Insurance cost more as you get older?

This is probably a really important time to tell you that life insurance policies follow a similar rule. In fact, even worse. The increases in life insurance premiums make the 2% on your health insurance look like peanuts.

Here’s a random example, using for a 43-year-old buying €500k life cover until they are 68.

Quote Type: Life Insurance
First Person: Non-Smoker, born on 16/11/1979
Cover Amount: €500,000 paying monthly, over 25 years.
Conversion Option: Yes
Premium: €56.39 per month

Let’s make them a year older and requote:

Quote Type: Life Insurance
First Person: Non-Smoker, born on 16/11/1978
Cover Amount: €500,000 paying monthly, over 25 years.
Conversion Option: Yes
Premium: €61.88 per month

That’s the guts of 10% higher after only one year.

If this person waits until they hit 50, their premium will be €117 per month!

We all remember when 50 seemed ancient, but now 50 is very much in view,  and with most people starting families later in life, we help a lot of 50 somethings buy life insurance for the first time.

Let’s jump in the DeLorean and make this 50-year-old 35 again. Their premium reduces to a bargain €32 per month.

And the premiums sticks at €32 until they hit 60!

Still with me, or have your eyes glazed over?

It’s like this.

You’re 35, and your cat dies in a freak trampolining accident. Strangely this makes you contemplate your mortality, and you think to yourself that now is the time to look into life insurance.

Awesome news for you because the quote you pay will stay that way even when you’re 60

But if you wait till 60, your premium is going to be through the roof (€421 per month in case you’re curious), and you’ll be paying far more than your 60-year old pal Marie, who had the pre-planning forethought to get her insurance plan in place when she was 30 (even though the risk of you dying is pretty similar)

I know, it’s utter madness, but I don’t make the rules.

That’s the way it works.

It’s to ensure a steady flow of our younger populations sign up for health and life insurance.

Think of it as a rather cheeky bribe.

And if bribes don’t spur you into action, how about this?

Insurance policies will only increase in price as the years go on.

Just like everything else – petrol, diesel, food, even cinema tickets. It seems like inflation is knocking on the door of every industry and robbing us blind.

So are you ready to give yourself the insurance protection you deserve right now and save future you a fortune?

Ah, I knew you were a smart one. I could tell the minute you landed on this page.

Give me a buzz on 05793 20836, or request a callback here, and we can talk through your options. I’ll answer your questions straight up and address your concerns without the hard sell.

Or, if you’re not a phone guy/gal, we can have great craic discussing your demise over email. Complete this questionnaire, and I’ll come back to you with a no-obligation recommendation.

The best time to buy life insurance was twenty years ago. The second-best time is now.

Thanks for reading.

Nick