In a bid to lower the costs of private medical insurance and attract new clients, AXA PPP Healthcare is ditching its postcode system for calculating premiums.
Currently, premiums for the insurer's private medical insurance are set dependent upon your postcode - not your lifestyle. This way, everyone in your street would be asked for the same premium, regardless of medical history or lifestyle.
AXA believes that by scrapping the postcode system they will be able to offer customers cover at premiums that reflect their own circumstances. The new system will ask a number of questions to enable the calculation of premiums. Typical questions will be height, weight and if they are smokers.
Our View
Whilst the postcode system is easier to run, healthier people will lose out because the costs for cover may well be cheaper with companies that individually underwrite the policies, based on sex, age and health issues. However, moving away from the postcode system is bad news for the more unhealthy as premiums will probably increase for them.
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