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Understanding Travel Health Insurance - Don't Leave Home Without It!

Most of us have heard horror stories about inadequately insured travelers who go off on holiday feeling perfectly well and then an unfortunate accident puts them in hospital. These unlucky folks find themselves very far from home without personal support systems in place and they're left with thousands of dollars in unpaid medical bills. Not fun! By reading this information will give you a basic understanding of the most important factors to consider when choosing a travel insurance policy. 

First off, if the world of travel insurance was not confusing enough, the events of Sept. 11 have made it even more so. Now more then ever it is very important to read a travel insurance policy's fine print 

Many trip-cancellation policies used to pay if your tour operator or cruise line went out of business, a so-called financial default clause. But since Sept. 11 and the travel industry financial problems that followed, some have eliminated such coverage or limited it to certain companies.

More cruise lines have begun selling "cancel for any reason" waiver programs, some of which allow you to cancel as late as the day of departure. Such programs typically do not pay if the cruise company goes out of business or files for bankruptcy. But they can be useful if you think your travel plans may be in flux.

The Plans

There are many types of insurance for the world traveler and choosing the right plan can be confusing. Becoming familiar with the basic types of plans and the specialized terms will make it easier to compare plans, and ultimately choose the right plan for your needs. 

Often people think travel insurance means flight accident insurance, i.e., the kind of insurance that pays the insured or its beneficiary a lump sum when an airplane accident results in death or serious injury. Flight accident insurance plans are commonly found at airports and they pay substantial sums to accident victims and their families. 

However, there are two other primary types of travel insurance that are designed to reduce the financial risk posed by unforeseen medical expenses and other crises that can confront international travelers. Although the distinctions can be blurred between the two types of plans, they are generally categorized separately as international medical insurance and travel protection plans, both of which may be offered in single-trip, multi-trip, or renewable versions.

International Medical Insurance - is short or long term medical insurance designed to reimburse you for medical expenses incurred when you are traveling or living in a foreign country. Maximum policy coverage levels can be substantial enough to cover major medical expenses such as emergency surgery and extended hospital stays. The "American-style" of international medical insurance coverage is subject to the specified deductible and co-insurance or co-pay. Plans may include emergency evacuation, reunion, and repatriation benefits as well as other travel assistance services. 

Travel Protection Plans -  typically reimburse your non-reimbursed travel expenses if an emergency (death, sickness, airline strike, travel company bankruptcy, etc.) occurs right before or during your trip causing it to be canceled, interrupted or delayed. Often these plans include travel assistance services, protection for lost or damaged baggage, as well as limited coverage for incurred medical expenses. In many cases there is no deductible or co-pay for covered medical expenses. 

Helpful Information For Students

The International Student Travel Association (ISTC) is a good resource for students to find out about international student ID cards, some of which offer limited travel assistance services, but these ID cards focus more on entry fee reductions at popular tourist attractions and other retail discounts. Remember, travel assistance services offered by cards and associations likely do not include any international medical insurance coverage or travel protection benefits. The card issuer may recommend a reputable insurer but international medical insurance and travel protection plans must nonetheless be purchased separately.

Some countries require that foreign visitors provide proof of adequate medical insurance for the duration of their visit, especially when staying for extended periods of time.

In particular, students planning to study abroad should be aware that they are usually responsible for the medical expenses that they incur while studying, traveling, and living in the United States and other countries. To ensure that visitors to the US have adequate financial resources to pay for health care treatment, the US government requires that holders of "J" visas have appropriate health insurance coverage. There have been proposals to extend this requirement to holders of "F" visas as well. Be sure to find out what is required for you. 

Travel Insurance Online

Although there are more and more web sites that offer travel insurance online, most sites offer only one type of coverage -- either a travel protection plan or international medical insurance -- or only offer coverage to citizens of a particular country. A select few offer a variety of plans for world travelers of all nationalities.

For medical emergencies:

Well before your trip, review the variety of types of assistance to which you already have access.  For medical emergencies, your regular health coverage probably will cover expenses anywhere, reimbursing you for your out-of-pocket expenses. Be sure to bring back adequate receipts and treatment records (in English, or you'll be required to provide translations).

Get the details from your agent or employer; especially inquire about medically required air evacuation. Blue Cross and Blue Shield (known in the insurance industry as the "Blues"), for example, have agreements with 182 hospitals in 52 countries where members can be admitted with their membership cards. Members will be treated as if they were in a Stateside hospital, with the billing going directly to the "Blues." (Incidentally, the "Blues" comprise regional, independent companies and some do not provide this service. Ask your employer or insurance agent whether or not you have this specific overseas coverage.)

Blue Shield of Northern California has a small brochure entitled "Passport" that can be taken along, offering detailed instructions on how to utilize their overseas coverage. Your insurer may have a similar guide.

In most cases, if you have regular health insurance, buying an additional travel policy is of limited value, since most of these provide only "secondary" coverage; that is, they pay only what your normal insurance does not. The only advantage is that they may pay your bills overseas and then settle later with your normal insurer.

Credit cards, especially "Gold" cards, have "hotline" phone numbers that provide a variety of assistance functions and in emergencies can increase your credit limit. They often will assist in "arranging" for" more-expensive services, but the cardholder usually is responsible for the cost.

You must make sure to take along the "hotline" phone or fax numbers for contacting whatever assistance services you have available. Medicare does not provide overseas coverage, but many "Medi-Gap" policies do.

Medical evacuation:

You are likely to find that you already are reasonably well covered for health/accident emergencies, with the exception of transportation to an appropriate medical facility or for very rare - but also potentially very expensive - air evacuation back to the U.S. 

Here are samples of the most important services you should need.  It is very important that you attempt to locate insurance with no preexisting-condition exclusion of any kind, or one that has the least amount of exclusions.  Remember exclusions can cost you a lot of money:

1) Traveler insurance should supply and pay for emergency evacuation to the nearest facility capable of providing proper care. When the patient is stabilized, they will transport him or her back to the United States under medical supervision, if necessary, with no upper limit on cost.

2) when a member is traveling alone and is to be hospitalized for more than seven days, economy round-trip transportation to the place of hospitalization will be provided, without charge, to a person chosen by the member.

3) Admission to a hospital will be guaranteed - so that the member will be admitted promptly - by either validating insurance or advancing funds (which must be repaid within 45 days).

4) Plus, without charge, be referred to an English-speaking doctor, supply critical-care monitoring, deliver medications that might not be available locally, keep you in touch with your family, provide legal referrals and provide pre-trip up-to-date health
precaution recommendations for your destination.

5) And, grim note, but it can happen, they should  provide assistance for
and pay the cost of return of mortal remains.

Travel insurance policies:

Lets take a look at the various parts of a travel insurance policy:

The "preexisting condition":

If you have a preexisting medical condition, be careful in your choice of insurers. Some policies (including trip cancellation/interruption) are restrictive in coverage of claims that are related to preexisting medical conditions within various periods prior to your trip. (They may be a good value for someone in good health - because of higher limits, more features and for lower costs.) Some companies will cover problems related to preexisting medical conditions if that condition has been controlled during the period
preceding the trip.

Look for the carefully worded section of the brochure entitled "Exclusions" or "Preexisting Conditions." The ground rules may be different for the health/accident portion of the coverage and the trip cancellation/interruption portion. "Controlled" usually is defined as "exhibiting no symptoms or not requiring the adjustment of treatment or medication." Look for that word "controlled" in the text, if this is an area of concern for you or your traveling companion.

If you have been taking medications or have been treated by or have even seen a doctor for any medical condition within the previous six months, make sure that you get a policy that uses the "controlled condition" language.

Even then, a change in the prescribed dosage of your medication in the months before your trip would jeopardize your coverage for a related problem.

Don't be intimidated by "fine print"; most brochures clearly describe the principal details and exclusions. Take the time to read carefully before you sign up.

Tour company offerings:

Tour companies are increasingly offering trip insurance (or its equivalent) that covers medical and/or cancellation features; look for the same "controlled" preexisting-condition language. These plans can be a good value if the price is significantly lower than standard insurance policies.

If the tour company is making the guarantees instead of an insurance underwriter, the guarantee would be of questionable value if the tour company suddenly closed up shop.

Don't worry unnecessarily about this hazard; the likelihood of company failure is reasonably remote and tour operators contribute to a fund of last resort that will reimburse customers for at least a portion of their lost funds.

Discuss this with your travel agent you can spend an unreasonable amount of money trying to insure against every single possibility.

Trip cancellation/interruption insurance:

Health and accident problems are the most common causes for claims under these coverage's. The preexisting-condition exclusions and recommendations are especially important here. Look for a policy that will provide coverage for rescheduled flights
home; many tour packages utilize special fares that do not provide for schedule changes. Also be aware that frequent-flyer-supplied flights are not insurable (refundable) by the insurance company.

In case of any emergency problem, it is worthwhile to contact the public relations representative of the airline (even if it requires a few calls from overseas) to see if he or she might make some accommodation because of the special circumstances.

Trip cancellation/interruption insurance is rather expensive: 5% to 8% of the insured amount. A couple spending $2,000 each for a trip will pay $200 to $300 for cancellation coverage.

The insurer will pay up to the covered amount and may have to pay as little as a fraction of the cancellation fee or your pre-trip deposit, depending on when the cancellation is made and why.

A logical strategy, whether or not you purchase cancellation insurance, is to avoid making the required incremental payments for a tour until shortly before the deadlines...to minimize your exposure, in case something unexpected comes up.

In considering travel insurance, make a choice with which you will be comfortable. Then you can enjoy your trip, confident that you won't be worrying about "What if?"

Follow the Scout motto of "Be prepared." You can go without additional coverage, go "bare-bones" or buy a "deluxe" package that will cover you even if you should get bitten by a penguin in the Amazon (slight exaggeration)

Check any health policies you already have very, very carefully. Find out if your coverage extends to emergency medical services outside the country, what that coverage entails and whether that coverage is adequate if something goes terribly wrong on your holiday. Then begin shopping for any extra protection you might need.

Don't take chances. Understand, that whether you are out of the country for two hours or two months, accidents are never planned and ill health can come on very suddenly . You could find yourself too sick to travel home for medical treatment and we all know how expensive even a short hospital stay can be. Be aware that you can't just buy your insurance when you start to feel badly. Policies must always be paid in full prior to your departure.

Do your research . Allow the same time and consideration for picking your policy as you would to deciding on a destination, shopping for your airline ticket or buying a backpack that's just right for you. The wrong backpack can mean a sore back. Choosing the wrong insurance could mean thousands and thousands of dollars in unnecessary debt!

Personalize your policy. Think carefully about the kind of coverage you need. Are you pregnant? Is this a skiing holiday? Are you traveling with children? Are you a diabetic? All of these factors will play an important role in your choice of policies and they must be considered very carefully. For example, did you know that many policies don't automatically cover pregnancy-related conditions or nursery care for premature infants?

Every insurance company should provide an agreement booklet that outlines in detail what type of coverage they offer in each of their policies. Ask for a copy of this contract before you commit yourself. This is a perfect way to compare benefits.

Remember, you get what you pay for! Never buy your policy based solely on the amount of the premium. If one insurance company is charging far less for premiums than another, be wary. This is the time to ask a lot of hard questions because chances are the coverage will be far less, too.

Never lie! Emergency health insurers have very stringent rules in regard to pre-existing medical conditions. Discuss these carefully with your insurance company. It's absolute folly to go off without advising them of your medical problems because, in the long run, you will probably lose your coverage and no payments will be made.

Ask about the company's emergency procedures. What happens if you become injured and need medical assistance immediately? Is their Assistance Center staffed 24 hours a day? How quickly and effectively will their medical staff react to your particular needs? If their 800 emergency number doesn't operate from where you are, will they accept collect calls? Will the person at the other end of the line speak English?

Find out about the non-medical services your policy provides. If you are traveling with a child and you're the one who's hospitalized, will there be provisions for the interim care of the child? Will they help if your passport or airline tickets are lost? You tend not to think about these things as you're setting off on holiday but they become so important when you actually find yourself in trouble.

Finally, we suggest that you do your networking with other traveling' women. Sound out your pals about companies they've dealt with and how well their claims were settled. Ask them to assess both the medical services and the non-medical services. You'll be surprised at the helpful bits and pieces of information you can pick up along the way.

Health care around the world isn't always perfect 

Hong Kong is reputed to have the world's most expensive medical care.

In developing countries, needles, syringes and IV administration materials may be re-used without adequate sterilization. Consider bringing a personal medical kit with a supply of disposable products.

Many hospitals in China derive a substantial amount of their revenue through drugs prescribed by staff physicians and sold at on-site hospital pharmacies. Therefore not only might doctors prescribe more drugs than you need but you will possibly be overcharged for your drugs as well.

In Mexico, some medical providers work in conjunction with air ambulances to pressure patients into paying for expensive (and sometimes medically unnecessary) emergency evacuations. It is important to have an assistance company that can provide appropriate medical referrals and assist you in making safe and cost effective evacuation arrangements when required.

In Eastern Europe and the Former Soviet Union, routine first aid supplies and feminine hygiene products are often hard to find and expensive where available.

Thee ambulance drivers in China are not required to have any medical or first aid training .

Check your policy carefully...

Be aware! If you plan on taking part in any sports that are considered hazardous, you might not be covered by your insurance policy. Dangerous activities include:

  • parachuting,
  • para-sailing,
  • hang gliding,
  • bungee jumping,
  • mountaineering,
  • cave exploring,
  • SCUBA diving (if you don't hold a basic SCUBA designation from a certified licensing body).

Glossary of Terms

Travel Assistance: Travel Assistance services may be bundled into an international medical insurance or travel protection plan, but these services are not considered insurance. The term travel assistance covers a broad range of services, often including but not limited to: toll-free multi-lingual 24-hour emergency telephone numbers, local offices around the world, web sites offering aid and advice to travelers in need of travel, medical or legal help, translation services, passport and visa assistance, assistance filling prescriptions, and virtually any special assistance useful to travelers in crisis who are far from home. 

Some credit cards and international student identification cards and associations offer complimentary travel assistance benefits to their cardholders and members. However, keep in mind that although travel assistance services can provide instant help with a free phone call when needed most, not all services are free of charge once rendered. Many specific travel assistance services, such as legal counsel or translation services, are provided without question at the time of need, but with the clear understanding that the traveler will subsequently reimburse that service provider at a later date when the traveler is in a more convenient position to pay for the service(s) rendered.

Maximum Policy Coverage This is the maximum amount of money that the insurance provider will pay for covered expenses. This may be an overall maximum or an amount for each accident or illness.

Deductible: (Also known as excess in UK, NZ, AU) This is the amount that the insured must pay before the insurance provider starts paying. This may be an annual amount, an amount for the duration of the policy, or an amount for each incident. 

Co-Insurance or Co-pay: This is the percentage or amount of expenses that the insured pays (if any) after the deductible is paid. Example: "Co-Insurance = 20% or co-pay is 80/20" means that the insurance company pays 80% of the charges, the insured pays 20%. Often there is a maximum co-pay amount, i.e., a limit or ceiling above which the insurance provider pays 100%. Example: "Deductible = $250 and 80/20 co-pay up to $5000, then 100% up to policy maximum." This means the insured is required to pay the deductible of $250 plus 20% of expenses up to $5,000, and the insurance provider pays 100% of covered expenses that exceed $5000 up to the maximum policy coverage limit. Thus, if total expenses exceed $5000 (e.g. $20,000 in total medical expenses) then the insured pays $250 (deductible) plus the co-pay maximum of $1000 (20% of the first $5000) for a total out of pocket cost to the insured of $1250, and the insurer pays the remaining $18,750 of expenses. Where total expenses are only $3000, then the insured pays $250 (deductible) plus $600 co-pay (20% of $3000) for a total out of pocket cost of $850, and the insurer pays the remaining $2150 of expenses.

Expenses: These are the expenses an insurance provider will consider for payment. These normally include expenses for surgery, hospitalization, doctors’ services, x-rays, laboratory tests, prescription drugs and other treatments. Some of these expenses may be limited by the insurance contract. See exclusions. 

Exclusions: These are the expenses that the insurance company or travel protection provider will not pay. Examples include: expenses resulting from illegal drug use, conditions which existed prior to the purchase of the insurance (see pre-existing conditions), participation in various dangerous activities, participation in certain types of sports (see hazardous sports and activities coverage), etc. Most insurance contracts have many of these exclusions. It is important to read brochures carefully. 

Premiums: This is the amount that you pay to purchase international medical insurance

coverage or travel protection plans. Premiums may be paid in advance, on a per trip basis, annually, monthly, quarterly, or by semester, depending on the policy. Premiums for travel protection plans are usually paid in advance, either annually or on a per trip basis. 

Emergency Medical Evacuation, Emergency Reunion, and Repatriation Benefits: Emergency medical evacuation means covering the expenses for sending an injured or ill person home or transporting him/her to a place where appropriate medical care can be obtained. Emergency reunion means covering the expenses for having a family member brought to the injured or ill insured during a medical emergency. The repatriation benefit pays the cost of preparing the body of a person who dies in a foreign country and returning the body to the deceased's home country. These benefits are often bundled together and included in international medical insurance and travel protection plans. 

However, these benefits can also be bundled together and offered as an economical stand alone annual plan, with no medical insurance or travel protection components, but with virtually unlimited coverage for emergency medical evacuation. For frequent international travelers, this type of stand alone plan is a prudent option to consider, especially for those with adequate worldwide medical insurance. This is so primarily because the emergency medical evacuation coverage that is included with most international medical insurance and travel protection plans is limited to a pre-set maximum dollar amount, usually $20,000 - $50,000. It is not uncommon for emergency medical evacuation costs to exceed the common pre-set limits by tens of thousands of dollars, especially when evacuation is from a remote location. 

Insured: This is the person covered under an insurance policy, i.e., the person for whom the policy was purchased. 

Pre-existing Conditions: Medical conditions associated with the insured (or a spouse, travel companion, or close relative in the case of travel protection plans where trip cancellation results from the medical condition of someone other than the insured ) that existed before the plan or policy took effect are pre-existing conditions. 

Many plans and policies offer limited or no coverage for medical expenses or trip cancellation expenses resulting from pre-existing medical conditions. These are known as pre-existing conditions exclusions. Most plans specify a maximum amount of time prior to the effective date of the policy during which the manifestation of any pre-existing conditions would constitute exclusions. Example: Pre-existing conditions exclusions are limited to "five years prior to the effective date of the policy." This means any expenses resulting from medical conditions that were manifested or treated within the last five years would not be covered. However, when purchasing some travel protection plans, particularly on a per trip basis, pre-existing conditions exclusions may be waived if the plan is purchased within a certain number of days after the initial trip deposit is paid (often 7-10 days). 

Hazardous Sports & Activities Coverage: Coverage for medical expenses resulting from engaging in certain hazardous, high risk sports and activities such as scuba and sky diving, rock climbing and bungee jumping (to name a few), is often explicitly excluded by international medical insurance and travel protection plans; however, some plans offer special hazardous sports and activities coverage that is optional and usually results in a only a modest increase in premium. Always make sure you are aware of the exclusions noted in the plan or policy you’re considering, and if you plan to participate in any high risk activities, look for plans with optional, supplementary hazardous sports and activity coverage. 

Accidental Death and Dismemberment: Benefits paid in large lump sums to the insured or the insured’s beneficiary in the event that the insured suffers the loss of a major body part or is killed.

Single-Trip: Single-trip plans cover one trip.

Annual/Multi-Trip: Annual or multi-trip plans cover all trips taken within a year (often with a maximum duration of 30-120 days per trip).

Individual Plans: Individual plans are designed and priced to cover one person.

Family Plans: Family plans are designed to cover all members in a family traveling together, and premiums are usually priced at a discount compared to the rate for a single person. Some family plans include relations beyond the immediate family, such as grandparents and in-laws. 

Primary Coverage: Primary coverage plans provide coverage without regard to any other insurance or coverage the plan holder may have. 

Secondary Coverage: Secondary coverage plans require plan holders to have primary coverage, and the secondary coverage only covers those expenses not already covered by the primary coverage plan.

Benefits: The amount payable by the insurance provider to a claimant, assignee or beneficiary under each policy. 

Beneficiary: The person or persons designated by the insured to receive the proceeds of an insurance policy upon the death of the insured. 

In closing, it is obvious that you have a lot to consider and understand if you want to make sure of your coverage while traveling.  Take you time and ask questions.  One last resource to consider is a useful Internet site for comparing some of the major insurance plans is http://www.tripinsurance.net , it is operated by InsureMyTrip.com, which you need to remember sells insurance. Remember, what ever someone tells you is only as good as the times your have spend confirming the information by having it in writing.  That can usually only be found with the insurer itself, not a verbal statement for a sales representative......read that fine print.


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