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What is Travel Insurance?
It is insurance you buy when you travel outside of your country of residence.
While most of your government or private health benefits can be used when you
are traveling domestically, there are usually limitations or restrictions to
treatments received out of country.
Who needs Travel Insurance?
Do you travel on business out of the country? Go south to escape the Winter
or enjoy visiting your cousins "North of the border"? Anytime you leave your country of residence without supplemental travel
health insurance -even for just a few hours- you're taking a risk.
If you get sick unexpectedly, or have an accident while you're away, many
health services charge more for out of country patients than for residents. Even
for Canadians, the Government Health Insurance Plans (GHIPs) simply do not cover
these higher rates.
In these cases, you'll be responsible for paying the difference in
costs...unless you have purchased specialized coverage- Travel Health Insurance.
I have coverage through work/retirement plan or credit cards - Do I still
need it?
Probably, yes! American and Canadian plans generally have fairly strict
definitions of what constitutes an emergency, and that can limit payouts. In the US, dollar maximums tend to be too low (an air evacuation from Mexico
or Canada starts at about $20,000) And most employee plans apply the travel
insurance claim against lifetime deductibles.
Emergency assistance services and direct payment services are specialized and
important part of a travel insurance package. Group plans are generally
week in this area. Even if you have basic coverage you may wish to purchase
supplemental travel insurance just for these services.
Why are direct payment services so important?
There are two types of plans when it comes to payment- Direct and
Reimbursement. Reimbursement plans are a poor choice, not just because they
require you to pay upfront, but because in essence it is like writing a blank
check to the health care provider. Billing errors (double billing, incorrectly
bundled billing and over charges etc.) are very common.
Resolving these errors after you have returned home can be, to say the least,
a pain in the neck.
A direct payment plan will
a) take care of the payments and
b) deal with hassles associated with complex medical billing.
Why are specialized emergency assistance services important?
Most group plans do have an emergency hotline, but the services are quite
basic compared to those supplied by specialized emergency assistance services.
Group plans may refer you to a hospital, but a specialized service will
monitor your condition, arrange for air ambulance services, communicate with
family and friends back home. In short they specialize in logistics issues that
are unique to dealing with a medical emergency that spans two countries. (Your
home country and where the medical emergency occurred.)
If I have good basic coverage, isn't buying a supplemental travel insurance
plan a waste of money?
Maybe, maybe not.
Short term coverage is very inexpensive, and a small price to pay
for knowing that you are covered.
Long term coverage is more expensive, but you can bring the cost way, way
down by opting for a high deductible or co-insurance.
If you recognize that there are holes in your basic coverage (or can't get a
straight answer which is often the case). Then spending a few bucks for
supplemental travel insurance is by no means a waste of money.
What are deductibles and co-payments?
If your plan has a deductible of $1000 dollars, then that means you are
responsible for the first $1000 of expenses incurred.
This does not invalidate the direct payment of bills, it just means that,
when the dust settles you are responsible for the first $1000.
Co-Payment is a formula for working out "who owes what" A 70/30 co-payment
usually means that 70% of the bill is the responsibility of the insurer, 30% of
the bill is the responsibility of the individual.
(as a general rule, the first number relates to what the insurer will pay,
though not always)
Sometimes the two concepts are combined to control costs. You should bear in
mind that the order in which these two concepts are applied will affect the ultimate
pay out.
Using a $10,000 claim with $1,000 deductible and 70/30 co-pay.
1. Deductible first, Co-pay second.
$10,000 - $1,000 = $9,000
Insurer pays 70% = $6,300
Individual pays 30% + Deductible = $3,700
2. Co-Pay first, deductible second.
$10,000 X 70% = $7,000
Minus deductible of $1,000
Insurer pays $6,000
Individual pays $4,000
Different jurisdictions have different rules, so check with your insurer to
see how they handle it.
What does travel health insurance not cover?
Pre-existing conditions:
If you have any pre-existing conditions, these may affect your ability to get
travel insurance, or the type of coverage available to you.
Simply put, a pre-existing condition is a medical condition that existed
before the policy was bought and/or before you left your country.
This is such an important issue,
that you can read more about it by clicking here.
Other exclusions or exemptions.
Some policies do not cover costs in specific situations that are identified
under exclusions or exemptions. Some examples.
