It’s a fair question, but it’s the wrong one.

When the numbers stop making sense

At $12,000 a year, in three years you’ve effectively funded a $36,000 surgery – more than the average private procedure in New Zealand.

So the logic feels simple: save the money, cut out the middleman – especially when 6-25% of every premium dollar goes to them.

Peter did exactly that: cancelled his policy, redirected the premiums into savings, and felt confident he’d made the right call.

Janice paused.

Instead of cancelling, she asked her adviser, Abby Woollaston, a risk specialist and financial adviser, a better question: “What am I actually paying for?”

“That small shift in thinking changes everything,” says Woollaston.

Why premiums rise (and why that matters)

Insurance doesn’t get expensive because margins rise – it gets expensive because claims do. The procedures needed later in life are more complex and costly.

Data from Partners Life shows more than $68 million in claims paid to those aged 60 and older in a single year, largely driven by cancer, musculoskeletal, and cardiovascular conditions.

That’s the reality: older people don’t just claim more, they claim significantly more, and the premiums follow.

Much of this is preventable, yet very little of your premium goes toward prevention. And while many of these conditions aren’t life-threatening, they still shape how you live day to day.

Because what most people are really insuring against isn’t death, it’s decline. And when surgery is needed, they want to move quickly to the front of the queue – that’s the peace of mind of insurance, even if it becomes unaffordable.

Peter’s reality: The cost of going without

Eighteen months after cancelling his policy, Peter came face to face with that reality.

What started as a “niggly” hip became something more serious. It wasn’t urgent enough to move him quickly through the public system, but it was serious enough to affect his day-to-day life.

He hadn’t saved the full $30,000 needed for the surgery. And even if he had, there were additional costs, including diagnostics, specialists, and rehabilitation.

So he waited and adapted his life around it. The cost wasn’t just financial.

Janice’s approach: Redesign, don’t cancel

Janice’s outcome was very different.

Woollaston quickly identified the issue: she was overpaying for convenience, not protection – dental, optical, GP visits, small claims.

“All the things that feel good because you can use them,” Woollaston says, “but financially, they rarely stack up.”

So they stripped her policy back. Janice kept the essentials (surgery, hospitalisation, major diagnostics), cut the rest and lifted her excess to $4000. Her premium dropped from just over $1000 to a little under $300.

Within months, the savings covered her excess. After that, the difference went back into living and preventive care.

Replacing a policy in your 60s is rarely viable because of pre-existing conditions. So, the goal isn’t perfect – it’s making what you have work better. Not just cheaper but more intentional.

Set up differently earlier, Woollaston says, the outcome could have been stronger. More flexible policies, with higher excess options (up to $10,000) and waivers, can cut premiums by another third. Janice didn’t have that option.

That flexibility matters. You may not need it now but you’ll want it later.

The third scenario: When affordability wins

For many people, a third scenario is the most realistic. It’s driven by cash flow, not strategy.

They understand the trade-offs, restructure … and still can’t afford it.

But cancelling without a plan is just defaulting into self-insurance, and that only works if you’ve planned where the money will come from if you do need that future surgery.

For some, that’s savings. For others, equity, like a line of credit, acting as a backstop. It’s not something you rely on day to day, but something that ensures you can access funds quickly if surgery is required.

The two steps most people skip

Before cancelling, Woollaston says most people miss a critical step.

“They don’t get a full health assessment before pulling the pin.

“An evidence-based view of your health risks can highlight whether there’s a surgery or issue on the horizon. Cancelling just before you need it can be one of the most expensive mistakes you make.”

The second miss: not realising how much cover can be adjusted. It feels like a dark art but this is where advisers add value.

“Be clear on your goal: keep the cover, make it affordable. Then get the adviser to map the options and trade-offs.”

The real question: does it fit?

The real question isn’t whether insurance is “worth it”, it’s whether it still fits.

Insurance isn’t good or bad value on its own. It depends on how it’s structured and whether it’s kept up with your life. This is where people get caught: they set a policy in their 40s or 50s, then judge it decades later without ever adapting it.

“Not all insurance policies are created equal,” Woollaston says, “and it’s something people tend to only realise when they need to claim.”

That’s why the early decisions matter.

“A comprehensive review in your 40s and 50s can make a significant difference later on because that’s when you still have the most choice,” she says.

And ultimately, it’s that flexibility that determines whether a policy still fits years down the track.

The final point: It’s not just the policy

Insurance doesn’t keep you healthy; it gives you options when something goes wrong.

The real investment is everything that reduces the chance you’ll need it, like building strength and mobility, early detection of illnesses, and prevention.

So, are medical insurers ripping off older people?

It can feel that way when you’re paying $12,000 a year. But more often, the issue isn’t the price, it’s that the policy no longer fits.

Whether you end up like Peter, Janice, or somewhere in between isn’t determined by the insurer. It’s determined by what you do when you first ask, “Am I being ripped off?” and whether you’re willing to look beyond the question.

Abby Woollaston’s Top 5 Insurance Customisation Tips

Hannah is the founder and director of Age Brightly. She is also the host of The Next Bit podcast on iHeart Radio.

Listen to her conversation with Abby, where they talk about the perils of health insurance over 60, what to look out for, and what you can do about it.

*Names have been changed