A limited coverage health insurance product has been launched targeting “fit and active” people aged 60 to 75 with tight eligibility in a bid to target older people and retain cost stability.
Lateral’s health plan is open to those who are non-smokers with no pre-existing conditions, a body mass index (BMI) of 18 to 30 and can walk at least one kilometre unaided.
It will also not cover those who have diabetes that is not well controlled, have had cancer in the last five years, a serious heart condition in the last three years, organ failure or transplant.
A compulsory annual health check must also be completed at purchase and renewal with people becoming ineligible to renew if they are outside the BMI limits, have uncontrolled diabetes or are an active smoker.
The insurer told Health & Protection its primary route to market is direct to consumer, but over time it would “like to explore working with selected financial advisers particularly those supporting retirement planning who are aligned with our vision”.
“Our research showed us that people in their 60s and 70s don’t feel seen by financial service companies,” it said.
“The products aren’t designed for them and the way they are marketed to can feel outdated and patronising.”
Coverage limits and pricing
The Lateral health plan offers cover for consultations and diagnostics, elective surgery, some minor procedures, physiotherapy and preventative care including a remote GP and support for those going through cancer.
Diagnostic coverage is a maximum of £2,000 per policy year, minor procedures such as endoscopy or eyelid surgery are covered up to a maximum of £5,000 per year, while major procedures including cataract surgery and hip replacements cover up to £50,000 per year.
The plan does not cover cancer care, chronic or long-term conditions that need ongoing management, complex surgeries, mental health, dental or optical care, or accidents and emergencies.
It has set age-band based pricing, currently £125 per month for those aged 60 to 64, £150 per month for 65-69 and £175 per month for 70-74 year-olds.
It can be renewed up to age 80 once a member has been accepted provided they continue to meet the eligibility criteria.
The insurer noted that renewal prices can change depending on a range of factors including age, increased medical cost inflation and previous claims history and all claims must be pre-authorised before treatment begins.
“Like all insurers, premiums will be reviewed periodically based on claims experience and underlying costs inflation, in our case medical expense inflation,” the insurer told Health & Protection.
“However, we’ve been very deliberate in trying to do this differently from traditional private medical providers.
“One of the biggest frustrations that consumers have with existing products is how premiums often increase sharply and unpredictably with age, and there’s no transparency on how or why those increases happen.
“We price openly in broad five-year age bands for all to see, giving customers more visibility on how their premiums could change over time and our intention is to keep the price curve flatter, so that maintaining your cover can still remain affordable in your 70s.
“We’re able to do this because of how we designed the product, by focusing on those with no intention of stopping who meet our eligibility criteria and on our route to market.
“By aligning pricing with risk pooling and preventative benefits, we’re looking to create a model that is sustainable over the long term,” it added.
Nurse-led claims
The plan is based around a nurse-led navigation service which the insurer said guides patients through NHS and private options, helping to make informed choices.
Patients can choose within the Lateral Hospital Network, which includes the UK’s largest private hospital group, or go elsewhere when the insurer will pay up to its agreed maximum contribution for each procedure.
“In terms of claims, we have designed this product to be used and want our members to use their cover when they need it,” the insurer continued.
“We’ve instead focused on tailoring the cover to what is most valuable to the over-60s and using tight eligibility to allow us to manage pricing in a way that we believe is more fair and sustainable.”
HealthHero provides the remote GP, digital physiotherapy, digital nutrition and lifestyle services, while Bluecrest conducts the annual health check and Reframe Cancer offers cancer support. The plan is underwritten by Tokio Marine.
£2.5m funding
In total £2.5 million in seed funding has been raised to launch the wider Lateral group, which will offer health and wealth products designed specifically for people over 60.
“Unlike most private medical insurance providers, Lateral will focus on simple and transparent pricing so members will know where they stand and what they’ll be paying year to year,” the insurer said.
“The Lateral Health Plan is only for fit and active people over 60, and because it wraps around the NHS – complimenting it rather than replacing it – premiums can be lower than traditional health insurance.”
Laura Ashforth, co-founder and CEO of Lateral (pictured left), said: “We’re on a mission to empower over 60s to live well for longer, helping them navigate the complicated world of retirement by offering them an affordable range of products expertly created just for them.
“Many people find the health system increasingly hard to navigate as they get older. Lateral is designed to help members understand their options and make informed choices about care, while also embedding evidence-based preventative approaches, such as an annual health check, to support proactive engagement with their health.”
Steven Mendel, co-founder and executive chair of Lateral (pictured right), added: “People are living longer and with more active lives, yet the systems designed to support them haven’t kept up.
“For far too long, insurers have viewed people over 60 as old, immobile, and liable to injury. The reality is that many people in their 60s and 70s are fitter and more active than ever. For them, retirement is a chance to do more, not less.”