When travelling abroad, we naturally have a tendency to relax and take a step back from our lives back home. After all, isn’t that the point of travelling? Whether you are an expatriate or a traveller, one thing that usually doesn’t cross our minds is the need for health coverage. Accidents happen even in the face of safety plans and precautions, and as a foreigner, getting medical attention can come at a high cost. How do you mitigate the amount that this can impact your finances?
Most people who plan ahead opt for some kind of medical insurance. Depending on the length of time abroad, some people choose a travel health insurance plan, one that is designed specifically for travel, and some choose an international health insurance plan, one that is designed specifically for extended periods of stay. This article will help you get more information on the types of health insurance plans, the pros and cons of each, and how to acquire them.
For the traveller
Most people who are living abroad for a period of up to but not more than 12 months, opt for travel insurance. Travel insurance offers many benefits which provide suitable coverage while living abroad for short periods of time, as well as travelling.
There are some important options in travel health insurance that you should pay particular attention to. The first is the fact that the limits to the coverage are usually higher for travel insurance compared to international health insurance. This is due to the fact that travel insurance is generally on a much shorter time frame than international health insurance. In addition, medical evacuation is an available option in the event that your current country is unable to provide you with the care you need. Travel insurance can provide coverage for multiple locations around the world and adding more locations may not increase the premiums, depending on the insurer. It is important to know these options as most of those that you may need are not automatic and must be requested in order to be effective in your plan.
Cover yourself on the non-medical side
Another important factor to travel health insurance is that it can provide non-medical benefits as well. This includes insurance for lost baggage, cancelled flights, delayed flights, theft, and much more. Having non-medical travel insurance coverage is important so you can have the peace of mind that your trip is insured in other ways than just health.
Travel insurance calculates the premiums by factoring in your chosen destination, your age, and your duration of travel. There are insurers out there that do not use your medical claim history while calculating your premiums, whereas some insurers do, which can make your premiums higher. An important thing to note is that travel insurance will most likely not cover your pre-existing conditions. A pre-existing condition is where you have an injury or chronic condition which might cause or exacerbate health problems now or in the future.
For the expat
Moving on to international health insurance, this option is generally selected by expatriates, or travellers who are on the road for longer than a year. International health insurance has many benefits and is highly customisable in both coverage and price.
International health insurance can ensure that you are able to receive medical attention all over the world. Whether you are in London or in Tokyo, you are covered for any medical needs that may arise. In addition, if you wish to travel elsewhere to receive your treatment, all it takes is booking a ticket.
Renewable for life…usually
International health policies are generally renewable for life. This means that while you’re on the plan, if you develop a disease or chronic illness, you will not be kicked off the plan because you have become too expensive to insure. In addition, if you develop a serious illness, an international health policy generally will not increase its premium because you have made some large claims – most of the world’s largest insurers have this built into their plan. You can also take your international health plan back home and use it for treatment of your medical problems. These are great advantages of an international health plan over and above travel plans. It is important to note that, just like travel insurance, pre-existing conditions prior to acquiring the plan will affect your ability to acquire it due to the increased risk. However, there are many plans or options available which may be able to cover your pre-existing condition, such as opting for group insurance or premium loading.
For expats specifically, although your employer might have arranged for medical coverage, that coverage may be insufficient. It is important to review your benefits and assess, either by yourself or with an expert, the terms and level of coverage. However, international health insurance is sufficient to cover you, even without the presence of an employee plan. You may be able to negotiate out of the employee benefit and add the amount it would have cost your company to your salary.
International health policies are very customisable. Like travel insurance, you can opt for specific additional benefits, such as for inpatient treatments, outpatient treatments, maternity care, medical evacuation, and more. The more options you include, the more comprehensive your insurance plan becomes, but the higher your premiums get as well. However, there are ways to mitigate the premiums.
How do you lower your premiums?
With medical policies with international reach, you can often opt to have specific countries or regions excluded from the areas of coverage. This may drastically reduce the cost of your premium because international health plans take into account your coverage area while calculating the premium amount. Areas like the United States have some of the highest costs of health care in the world, thus making your premiums higher as well. In addition to excluding specific countries, you can opt for having a deductible or co-insurance.
A deductible, also known as an excess, is the amount that you pay before the insurers start covering the cost. This is a pre-defined amount and could either be for every condition or could be for every year. For example, in an annual deductible of 300 USD, you will have to pay off 300 USD before your chosen provider covers any expenses. Once you pay that 300 USD, you will not need to pay it for the rest of the year. If it is per-condition, then you will need to pay a fixed amount per condition you seek treatment for. Finally, co-insurance is where you pay a percentage of every claim and the insurer will cover the rest.
Now that you have gone through a crash course of both international health insurance and travel medical insurance, how do you choose which one is better for you? It all depends on what you’re doing and what you need.
How to choose
It is important to ask yourself: What are you doing there? By defining this, the answer usually points to an obvious choice. If you are travelling and visiting a chosen country, then travel insurance may be a better choice for you in terms of adjustable and short durations, lower prices, and easy claiming. If you are an expat, then an international health insurance plan may be the better choice because of its longer durations, mostly guaranteed renewability, and is a more comprehensive policy.
What if you are an expatriate and you decide to travel around? This is a very common occurrence and you should definitely consider adding some additional insurance. As an expatriate, you most likely will have already acquired international health coverage or should do so before you travel. If you have done so, then you should add non-medical travel insurance for the duration of your trip, as your trip may be affected by lost baggage and trip cancellations.
Where to start
Of course, nothing is clear cut and finding the best suited solution for you takes time and research, as well as expert advice. Where do you start?
Speaking with your friends and family is a great way to start. If you know people who have acquired health insurance and have had positive experiences, follow your nose and enquire. You can do lots of research online and many people can provide testimonials for the companies they have worked with.
If understanding the dense wording of insurance policies is not your strong point, how else can you get a good idea of your options aside from finding insurance companies and enquiring about the plans that they offer? It might be better to spend your time finding a reputable insurance broker. Like mortgage brokers, insurance brokers work with a wide variety of different providers, helping them build a broad knowledge base of many different plans. By doing so, they are able to find the best coverage for the best value. Given their broad knowledge of policies and the internal workings of insurance companies, they would be in a good position to provide you insights on finding a policy that would work for you.
Travelling or working abroad is a wonderful experience which everyone should have at one point in their lives and while accidents may happen, proper preparation can prevent them from causing an undue medical or financial burden. By ensuring you are properly covered by travel or international health insurance you can spend more time enjoying your life and travels and less time worried about the costs of unexpected accidents and illnesses.