Are high insurance costs pricing retirees out of living in the UAE long term?

Many families find packages for over-60s unaffordable, especially for those with pre-existing conditions

Jo Woolston, who has lived in Dubai for two years, says the only thing that would make her go back to the UK is the cost of health insurance. Chris Whiteoak / The National

While the UAE is attracting more retirees than ever, many find they are unable to keep up with the costs of health insurance, particularly in the over-60s bracket.

There are no specific packages for retired people and, when they reach their 60s, premiums significantly rise, especially for those with pre-existing conditions.

This is an issue that is pricing many people out of living in the UAE long term in their later years.

British retiree Jo Woolston, 67, who has no pre-existing conditions, was paying about Dh30,000 ($8,168) for her health insurance annually when she first moved to Dubai two years ago. But, following a one-off operation on a torn knee ligament, those costs rose to more than Dh90,000 per year when it was time to renew.

As she is sponsored by her son-in-law, she is now on a basic policy for just over Dh25,000 annually that has limited network coverage.

“I had to get some sort of insurance as it’s the law here, but some over-70s I’ve met don’t have any cover and just pay as they go,” she says.

“It’s so expensive, hopefully some company will do something about it. I would rather pay a smaller premium and then pay 50 per cent or more co-pay when you do use it.

“I’d like to stay out here for another five or six years at least, but the only thing that would make me go back is the cost of health care.”

Loaded premiums and soaring renewal costs

Toshita Chauhan, business head of health and motor insurance at Policybazaar.ae, says this is a continuing issue among her clients.

Currently, there are different rules for the emirates, with health insurance coverage only mandatory in Dubai and Abu Dhabi, where residents will receive a fine if they do not have a policy. All residents must be insured to a minimum annual cover of Dh150,000, which must include outpatient and inpatient services.

In the Northern Emirates, there is no minimum product inclusion regulation, but as of January 1, 2025, employer-paid health insurance will become mandatory nationwide.

Ms Chauhan says basic annual plans can start for as little as Dh5,000, which will give members access to lower-cost hospitals such as Aster or NMC, instead of premium providers including Mediclinic.

Toshita Chauhan, from Policybazaar UAE, said there are cheaper insurance packages for retirees, as long as they are willing to visit lower-cost hospital networks. Photo: Policybazaar UAE

The costs then go up depending on a buyer’s needs, sometimes reaching up to Dh1 million and beyond, says Ms Chauhan.

“For example, if you want UAE, regional or worldwide cover. If you want something including the US and Canada, that price can obviously pile up.”

The more serious your medical conditions are, the higher the premiums will be, she adds.

“Members who have borderline diabetes or hypertension will get a certain amount of premium loading versus someone who has diabetes and is on insulin.”

The more you claim, the more your policy will be at the time of renewal, too. Policies typically last 12 months and after that period, the insurance company will calculate any claims that have been made and the likelihood of claims for certain conditions in the next year.

In Dubai, companies can load up to 100 per cent of the current premium per condition, Ms Chauhan explains, so if your policy is worth Dh10,000 annually and you develop a spinal issue within that year, then they can add another Dh10,000 to your premium the following year.

Anyone who has made multiple claims in a year but doesn’t have a specific condition may also be pegged as someone with health anxiety, which can again add to the premium.

“For healthy people, it's much easier to sustain the cost of health insurance because they don't get so many loadings on their renewals … But above 60, it's very rare that members will not have any pre-existing condition, so that becomes more expensive,” Ms Chauhan says.

“It is not something that is easily affordable, and there is no particular plan for retirees.”

Loopholes are risky

There are some clients who wish to go on a basic plan for legal reasons, but not declare any pre-existing conditions and go back to their home countries for regular treatment, but Ms Chauhan says this is risky.

“Let’s say tomorrow you have a fever and it requires some sort of additional treatment … The doctor will look at medical history and what medicines you’re on, and they will write it down, and you will tell them what you’re taking, and that’s when your truth comes out.

“This record goes to the insurance company for approval, and they will look at what you declared at the time of buying insurance. If you said no condition, versus what the doctor has said, they will decline everything.”

Changing insurer each year cannot help bring premiums down, either, as companies can access your health records through independent, third-party administrators, she adds.

Some people have started avoiding health insurance costs altogether. One UAE resident, who lives with his parents, was unable to afford coverage because his mother, 69, previously had cancer and his father, 72, had a heart condition. The lowest quote he could find was Dh60,000 per parent annually.

“We did not find any suitable and affordable insurance, so we make sure my parents travel to India once every six months and get their check-up done and get the medicines,” he says.

“The new law [on mandatory health insurance] will be challenging for us. Hopefully by that time some sensible insurance comes in place which can help these kinds of cases.”

Ms Chauhan says they always strongly recommend buying health insurance in the proper manner, “because when you really need it, no one will give it to you”.

Start saving now

Carol Glynn, a personal finance coach based in the UAE, says these are all common concerns among her retired clients.

“As most people have always had their medical insurance provided by their employer, they can get a shock when they learn just how much it costs,” she says.

Carol Glynn, a personal finance coach, advises people to start saving for health insurance in retirement as soon as possible. Photo: Carol Glynn

“Often, they feel resentment, as even if they have not had any medical issues, many insurance companies increase premiums arbitrarily with age, and so they feel premiums are disproportionately high for older individuals.

“This makes it challenging and frustrating to find comprehensive coverage that fits their budget or what they view as good value for their money.”

Complex policy terms and conditions can also be overwhelming and confusing for her clients, she adds.

“No matter where you plan to retire, it is crucial to plan ahead for all costs, including health insurance costs,” says Ms Glynn.

“Make sure you have a clear understanding of the potential costs and set aside sufficient funds to cover them.

“The earlier you start saving for this, the more options you will have available to you when the time comes,” she adds.

“Put the savings in an interest-bearing account, so it’s growing in the years before retirement. If you have more than five years to retirement, consider putting these savings into an investment such as an exchange-traded fund to maximise your growth potential.”

Ways to maximise your insurance budget include considering basic health plans, which offer a safety net for essential health services, or downgrading your network access to include lower-cost hospitals, Ms Glynn recommends.

Removing services such as dental and optical, and saving for those separately, can also reduce your premium, as can optimising your co-payment percentage.

Ms Glynn emphasises the need to start researching and securing health insurance as early as possible, and thoroughly compare insurance providers and policies to find comprehensive coverage at a price that fits your budget.

“Haggle,” she adds. “Use comparison prices to ask for price matching or discounts. The worst that can happen is they say no.”

Finally, focus on your health, she says. “Maintaining a healthy lifestyle can potentially lower your insurance premiums and reduce your need for medical services.”

Ms Chauhan says that while it can be unaffordable for many now, she strongly believes this will change in the future.

There are already initiatives in place, such as a new Abu Dhabi cancer care centre that has pledged to deliver same-day check-ups for drop-in patients with consultations being free, regardless of insurance status.

“The UAE is adapting,” says Ms Chauhan. “It is doing so much more to make it more stable and long-term for people to be here. I’m sure there will be reforms that will come in.”