The market for private medical insurance has been slowly shrinking over the last five years with the numbers of people covered falling from 1.9 million in 2005 to 1.7 million last year. But at last the insurers have woken up.

The over 55’s represent a prime sector of the market but they are also the group who have been most badly hit over recent years by the big price rises dished out by the insurers. Now both Standard Life, The Pru and Axa PPP have decided to do something about it. All three companies have brought out plain vanilla policies which concentrate on basic medical treatment and strip out some extras such as alternative therapies and psychiatric care. The policies also have increased the limitations on out-patient cover.

The effect on premiums is startling. Premiums for these new policies are up to 60% lower than the main line medical insurance policies and customers can build up no-claims discounts of up to 65%. Standard will even carry forward a no claims record from other insurers to the new policy.

However I do have a question. If these policies revitalise the attraction of medical insurance for the over 55’s, why can’t they apply the same thinking for the under 55’s?