For both expatriates and travellers, it is difficult to keep track of all the necessary provisions that need to be made, including the need for health coverage. Accidents can happen, and for foreigners, getting medical attention can be costly. How do you mitigate the effect this can have on your finances?
Those planning to spend time abroad should opt for some kind of medical insurance. Depending on the length of their time abroad, expats may choose a travel health insurance plan or an international health insurance plan. 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 short term
Most people living abroad for a period of up to 12 months opt for travel insurance. Travel insurance offers many benefits which provide suitable coverage for those either living abroad for short periods or travelling.
You should pay particular attention to some vital details about travel health insurance. The first is the fact that the limit of coverage is usually higher for travel insurance than for international health insurance. This is because travel insurance is generally on a much shorter time frame than international health insurance.
In addition, medical evacuation is an available option if your host 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 some options you'll want that are typically not considered essential are not automatic and must be requested to be effective in your plan.
Another indispensable benefit of travel health insurance is that it can provide nonmedical benefits as well. This includes insurance for lost baggage, cancelled flights, delayed flights, theft, and much more. Having nonmedical travel insurance coverage is crucial to your peace of mind and the safety of your trip.
Travel insurance premiums are calculated by factoring in your chosen destination, age, and duration of your trip. Some insurers do not use your medical claim history while calculating your premiums and some do, so be aware this can affect your premiums.
A critical 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 long term
Expats and travellers on the road for more than a year generally select international health insurance. It has many benefits and is highly customisable in terms of both coverage and price.
International health insurance can ensure that you receive medical attention anywhere in the world. Whether in London or 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 usually renewable for life. This means that while you’re on the plan, if you develop a disease or chronic illness, your insurer can't prevent you from renewing for being too expensive to insure. In addition, if you develop a serious illness, an international health policy typically will not increase its premium because you made large claims – most of the largest insurers have this built into their plan. You can also take your international health plan back home and use it for treatment at home. These are great advantages of an international health plan over and above travel plans. It is important to note that, as with travel insurance, pre-existing conditions will affect your ability to acquire international health insurance 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 essential to review your benefits and assess the terms and level of coverage, either by yourself or with an expert. 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 your 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 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.
Getting lower premiums
For medical policies with international reach, you can often opt to have specific countries or regions excluded from the area 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 healthcare 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 predefined amount and could be defined per condition or year. For example, with 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, once-off amount per condition you seek treatment for. Finally, co-insurance is where you pay a percentage of every claim and the insurer covers the rest.
Making the choice
To decide between international and traveller health insurance, it is important to ask yourself what you are doing abroad. 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 more comprehensive policy.
What if you are an expatriate and decide to travel around? This happens fairly often, and you should definitely consider adding some additional insurance. As an expatriate, you most likely will have already acquired international health coverage – if you haven't, it's a good idea to get your international insurance sorted beforehand. You should also consider adding nonmedical 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 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, make sure to ask them. You can also do research online, and many people can provide testimonials for the providers they have worked with.
If you're struggling to understand insurance policies' dense wording, you could call an insurance provider and ask them to explain their insurance plans. Another option is to find 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 plans, so they can find the best coverage for you for the best value. Given their broad knowledge of policies and the internal workings of insurance companies, they are in the best position to provide you with insights and find a policy that works for you.
Travelling or working abroad is a wonderful and often life-defining experience and, while accidents may happen, proper preparation can prevent them from causing undue medical or financial burdens. 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 worrying about the costs of unexpected accidents and illnesses.