Insurance 101

Choosing the Right Plan

The purpose of insurance is to try to prevent an unexpected event to significantly impact one's finances. Medical bills in the United States and sometimes abroad, can be quite high. The first thing to consider is: What do I want to insure myself against? For many visitors, they are principally concerned about getting some overwhelming expense due to car accident or other incident that would constitute a significant burden on the family to pay. Small incidents or illnesses may not be a great consideration for this client. In that case, the client should consider purchasing a comprehensive plan, possibly with a high deductible. Choosing a high deductible will allow some savings in the premium and, naturally, we all hope that the traveler is safe and healthy and the plan was only taken as a precaution. However, in the event of tragedy or accident, the policy will pay out most of the expense while the insured pays a known out-of-pocket amount.

Some travelers, by contrast, don't expect any overly large bill. They are more concerned, perhaps with seasonal flu, dietary issues, or smaller complaints that can be quite common for persons traveling to foreign countries given new climate and foods. They want a policy that will help them with these sorts of expenses. In that case, a more economical, fixed plan can be purchased. The fixed plan pays set amounts for each medical expense; however, they may never pay 100% of any expense. They will help defray costs of minor medical issues as they arise. Clients must be careful; however, as they may still end up with a high medical bill if the amount covered is very low compared to what they are being charged.

MEANING: What does it all mean?

There are many terms to understand when choosing and purchasing an insurance policy. Firstly, there is a policy maximum. The policy maximum is issued per policy period or per injury sickness to each person on the policy. The policy maximum is the most the insurance company will pay for medical expenses either per policy period (that is, for the time the policy is purchased, usually up to one year) or per injury or sickness. In the case of the maximum being on a per injury/sickness basis, the maximum "resets" with a new medical issue.

The maximum is tied to the deductible. The deductible is what the insured must pay before the insurance company will begin to cover medical expenses. Deductibles can be per policy period or per injury/sickness. If the deductible is on a per policy period basis, then the insured must only pay it one time for the whole time they have their policy (which often can be up to a year). If the deductible is per injury/sickness, then the insured may pay the deductible multiple times once per each illness or injury. So, with a deductible per injury/sickness, if an insured goes to the doctor for some complaint, he pays the deductible. If the doctor wishes to see him again for a follow-up appointment, then he would NOT pay the deductible again, since it is the same illness/injury.

Domestic policies often have what are called copays. A copay differs from a deductible in that it usually lower ($5 to $50) and it is paid every time one goes to a doctor or to receive a medical service. The policies we sell generally do NOT have copays. The only ones that may are student policies which offer a $5 or $10 copay if the student/scholar uses their institution's health service center. They would pay that in place of a higher deductible, so it is a nice benefit to those policies when available.

Nearly all policies whether fixed or comprehensive offer a benefit called emergency medical evacuation. Emergency medical evacuation is one of two situations. Firstly, it is moving a person who in in need of medical assistance from their location of injury (such as in a car accident) to the nearest medical facility (such as a hospital). This can be done by ambulance, helicopter, or whatever conveyance is needed. The other situation is in which a person is sick or injured and the closest appropriate medical facility is farther away, such as a different country.

In that case, it may pay for moving the invalid from their current location by air or appropriate method to that medical facility. If a person is traveling in the US or Canada, it is unlikely that it would be deemed the person needs to travel to a different country for treatment. The use of that benefit in the second situation would be most likely while traveling outside the US, Canada, or Europe into a more remote location. This benefit does not apply at the insured's discretion but at the assessment of the insurance company and the medical staff available. The insurance company will coordinate all travel as needed and they are all experienced with dealing with these emergency scenarios.

All policies we offer also have a benefit called repatriation or return of mortal remains. In the unlikely event of the death of the insured, this benefit will pay for the transport of body or remains back to their home country. Some visas require this benefit to be part of the policy. While we may not wish to dwell on this possibility, the costs of transporting a loved ones remains home may be cumbersome and again, the insurance companies have experience with dealing with these situations and can assist in making these arrangements.

Some policies offer other types of benefits, such as a lost baggage benefit, trip interruption, return of minor children, etc. The lost baggage benefit applies to baggage lost by commercial airlines. The benefit is usually a fixed amount intended to help replace items that were lost. Trip interruption can pay for economy fares for a person to return home due to a covered issue (death in the family, loss of home or business, etc.). Some policies, such as trip or travel insurance have many of these benefits that have been carefully thought out for travelers. These include paying for a friend or relative to pick up minor children in your care should you be hospitalized and take them home or to have someone stay with you should you be in a hospital, etc. All these benefits will allow you to travel with peace of mind knowing you and your loved ones will be taken care of in any situation.

COVERAGE: What is NOT covered?

Pre-existing conditions are typically NOT covered by travel insurance policies. What is a pre-existing condition? Each company has their own definition, but basically, a pre-existing condition is a medical condition that a person has been diagnosed with, is being treated for, or has with reasonable medical certainty before the start of the policy. As you can see by this simple definition, the insured does not need to know that they suffer from the condition in order for it to be pre-existing. These conditions can be of particular importance for older persons or those who suffer from a medical condition, such as heart disease or diabetes.

While most policies exclude these conditions, there are some policies which cover acute or sudden onset of pre-existing conditions. That is, a condition that is stable and controlled (such as diabetes) either by medication or lifestyle, may be covered if there is something sudden and unexpected which happens due to this condition. In that case, policies may cover up to a set amount (look HERE for those options). Please note that some policies only cover for persons under a certain age (usually 65 or 70) or only cover heart attack or stroke. Call us if you need specific detailed information on these policies.

The other area of medical care which the plans exclude is preventive or routine care. The policies are meant to be used in cases of sudden illness or accident. They do not cover check ups or routine medical care required by an insured. For example, if a person is on dialysis, the policies will not cover that need. Policies will also not cover children's vaccinations since these are also considered wellness care. The only policies which may cover routine and wellness visits are those in the global insurance category and these benefits usually only kick in during the second year of the policy (that is, after the insured has had them for a full year and renews the policy).

ELIGIBILITY: Who can purchase a policy?

Anyone with a valid credit card can purchase an online policy. The person to be insured can purchase a policy for themselves, their spouse and their dependents (that is, children under 18 years old). If they have the same travel dates, they can be on the same policy.

Also, other people can purchase policies for visitors. It is quite common for a family member to purchase insurance for their loved one who may be traveling to visit with them. Naturally, it would be illegal to purchase a policy (particularly one with a death benefit) and plan the untimely demise of such person. Besides that situation (which we certainly do not recommend!), the purchase of a policy, even for a non-family member is fine.

However, the companies are set up to take purchases from abroad, so you do not need to be in the USA or any particular place to make your purchase. Certain countries have specific limitations and issues in making purchases.

Some citizens may have a hard time making a purchase due to economic sanctions taken against that nation. Remember these are all US companies and embargoes and sanctions may apply. Other countries (more commonly) have issues due to high numbers of fraudulent credit card purchases. Those citizens can make a purchase by filling out the paper application and faxing or mailing the application to the company. Finally, a small number of countries do not allow their citizens to purchase plans, usually due to tax considerations (perhaps on the issuing companies). Generally, we can find options for all our clients to wherever and from wherever they are traveling!

GUIDE: Where can I find all the information I need?

We have endeavored to provide a simple and informative website to answer most questions regarding travel medical insurance. However, you can find a great deal of information on our site. The insurance policy brochures have the latest answers and many details regarding the policies and can be a great resource once you are familiar with the terms and how things work. Also, don't forget we have licensed agents available to talk you through the finer points of these plans and help you find the policy that is right in your situation.