I hope that (a) I live to 89, and (b) if I do I'm able to get a new girlfriend and that (c) I'm up for new experiences! I think your father sounds great, and I wouldn't discourage him if I were you (the tour company doesn't want the hassle, but still wants your money in the 49 states...) but I would encourage him to think very carefully about it so that he can enjoy it to the full.
The one sticking point seems to be the medical repatriation cover. Unless your father has a medical history which suggests he might need repatriating clinically I would suggest going without. Yes people of any age sometime need to come home early, but in the vast majority of cases they can do this on a scheduled airline without constant nursing supervision. I would suggest an airline ticket with some flexibility (for a change fee, say), and an upmarket hotel with a good concierge who can help make local arrangements and liaise with you in the unlikely event of a change of plan.