Expat Insurance: Travel Insurance for Full-Time and Long-Term Travelers

by Nora Dunn on March 5, 2012


life's a beach

 

One of the more common questions I get is “What sort of travel insurance do you use?”

 

After being on the road for a certain amount of time, full-time and long-term travelers (including expats living abroad) don’t qualify for standard travel insurance, as most health care plans and programs from our home countries also lapse with a long enough absence.

 

Here’s a full explanation of how I insure myself, along with some helpful tips and definitions if you are in a similar position.

 

 

Expat Insurance

Also known as International Health Insurance or Worldwide Travel Insurance

 

It goes by many names, but the idea is the same; without a country to call your own (at least, as a resident), you don’t have any basic medical care to rely on, and all medical expenses must be paid out-of-pocket. For full-time/long-term travelers and people living abroad, expat insurance is the answer.

 

In some countries where the cost of living is low or where medical tourism boons, self-insuring can be viable. But if a medical emergency is dire enough or if you are traveling somewhere this isn’t the case (or where medical care is inappropriate and you are need to be taken to a place where you can receive the care you need), you could find yourself in a crippling financial bind.

 

I’ve written about the dirt on travel insurance before, including reasons why you need it and when you don’t, and even what it’s like to endure a serious illness requiring hospitalization on the road. So I won’t create a further case for why you need travel medical insurance here; let’s assume you already know why you need insurance, and want specifics about what to get.

 

Where to Apply: Use a Broker

Expat health insurance plans are offered by insurance companies around the world. They tend to be insurers that also offer travel insurance and standard health plans, but you’ll find the occasional dedicated expat insurance company as well.

 

I like using insurance brokers to help me find the best rates and policies. With one request, I get a summary of various insurance companies and plans, costs, and general policy specifications. I can read up on the policies that best suit my needs and budget, and ask questions of the broker about the quotes, policy administration, applications, and claims. Their answers are usually unbiased, and can be illuminating since they hold experience working with these insurers and can indicate if some are easier or more difficult to manage.

 

Considering the insurance world is mired in ambiguity and legalese, and making claims can be hell on wheels, I find that working with an insurance broker who can advocate on your behalf throughout the application and claims process is well worth it.

 

And it’s free! Buying a policy through a broker doesn’t cost any more than if you go directly to the insurance company, and in fact can sometimes cost less if the broker gets volume discounts.

 

Prior to (or in addition to) using an insurance broker, you can also check out some insurance comparison sites online to give you a sense of what’s out there. Insurance premiums vary dramatically, so it pays to have a good cross-section of quotes.

 

 

Expat Insurance Tips

(check out the glossary of terms below if you don’t understand some of this terminology)

 

Application Process

Read the fine print before you buy, as well as after. It might be soul-destroying to sift through 30+ pages of policy legalese, but it pays to know your policy inside and out. You don’t want to discover your policy’s limitations in the throes of a medical emergency.

 

The higher your deductible, the lower your premiums will be. You can adjust this accordingly in the quotation process to get a policy suited to your needs. If you only plan on using the policy for major medical emergencies and you have a cash buffer, then setting a high deductible makes sense.

 

The higher the co-insurance/co-pay, the lower your premiums will be. Again you can tweak this during the quotation process to suit your needs and budget.

 

Excluding USA Coverage reduces premiums. Many policies have an option for worldwide coverage that excludes cover in the USA, and with the exclusion these policies are considerably cheaper (as much as 50% cheaper) than their worldwide counterparts.

If you get a policy like this and plan to visit (or return to) the States, you can simply buy a separate policy for just the dates of travel in the States and it will end up costing you much less than blanket annual coverage.

 

Pay annually for discounted rates. This concept applies to most types of insurance policies; the more frequent your payments are, the more money you pay. By paying annually you’ll get the best rates. And if you end up canceling the policy, you’ll get retroactively refunded for the portion of the year you didn’t use, so there’s no loss.

 

Check for direct pay clauses for hospital stays. Most insurance companies will directly pay the hospital for your in-patient expenses so you aren’t out-of-pocket and looking for reimbursement. But it’s worthwhile ensuring that this is the case; the last thing you want is to foot an unexpected hospital bill that could be in the tens of thousands of dollars.

 

 

Policy Maintenance and Claims

Always call the insurance company before seeking medical care. Some insurers are so sticky about this that they can actually refuse to cover you if you don’t contact them before seeking medical care. Obviously if you are unconscious or completely unable to pick up the phone, they’ll make an exception, but they expect a call within 72 hours of your being admitted to a hospital, or as soon as is reasonable. You can have somebody call on your behalf if you can’t do it yourself.

Part of the reason for this requirement is because the insurance company might have special arrangements with certain health providers and hospitals (which I’d like to think have been vetted for their standard of care, but alas I may be naively optimistic on this front). Either way, it’s always best to call them first since they hold all the cards when it comes to paying out. They’ll create a file for you, make arrangements to pay the hospital directly, and enhance the chance of your claim going through without complications.

 

Keep copies of your insurance info everywhere. You can’t have it in too many places, as far as I’m concerned. I have a card in my wallet, the policy info and documentation on my computer (which gets backed up), a copy on my hidden USB stick, and full policy documentation with a family member back home. (If you travel with a partner, they should have your policy information as well).

As a worst-case scenario, if I’m lying on a hospital bed and have one phone call to make with five minutes of consciousness to enjoy, I can call my Mum (who is my designated representative) and ask her to do the leg-work with the insurance company for me. Otherwise, regardless of the accident or illness that hits me, I’ll have multiple copies of policy information and claims phone number just in case my wallet is stolen or I lose the information in one spot.

 

 

Glossary of Terms

Here are some practical explanations of the terms you’ll universally find in the expat and travel insurance realm:

 

Benefit Amount

The money (benefit) that’s paid to you in the event of a claim.

 

Beneficiary

Somebody who receives money (usually the person receiving a life insurance payout if you die).

 

Claim

You “have a claim” or are “filing a claim” if you are applying to the insurance company to for a payout (benefit) in the event of receiving medical care that’s covered under the policy.

 

Co-Pay/Co-Insurance

Co-paying is having to pay a percentage of the medical expense yourself (not to be confused with a deductible, below). It’s usually 10-20% of the total cost, up to a limit.

For example: You incur $1,000 in medical expenses. If the co-pay/co-insurance amount is 10%, you pay $100, and the insurance company pays the remaining $900.

 

Deductible

Before the insurance company covers anything (even on a co-insurance basis), they can require that you pay a deductible, which means you pay for the first portion of expenses.

For example: You incur $1,000 in medical expenses, and have a $250 deductible. You’ll pay the $250 deductible, then the remaining $750 is shared between you and the insurance company dependent on your co-insurance deal (ie: you co-pay 10%, which is $75).

Watch out for the fine print about deductibles; some are per policy year, and some are per claim or medical provider. If you have multiple claims (which is possible on a more comprehensive policy that covers regular doctor/physio/chiropractor/etc visits), then you could end up paying a deductible many times over before qualifying for any reimbursement.

 

Emergency Medical Evacuation

If medical care is unavailable or inappropriate, an emergency medical evacuation benefit will cover the cost to get you to a place where you can receive the treatment you need, or even back home if it’s deemed reasonable by the insurance company. This can be horrifically expensive once you’re looking at things like medical helicopters, so you usually see large benefit amounts allotted for this clause.

 

Exclusions

Policy exclusions are things that aren’t covered. They can either be pre-existing conditions (see below), or injuries as a result of certain activities you participate in (like skydiving or scuba diving), or claims resulting from being in war-torn or politically unstable regions.

 

Inpatient vs. Outpatient

An inpatient is somebody who has been assigned a hospital bed, even if it’s only for a day visit. Outpatients are everybody else. Some basic emergency medical policies only cover for inpatient expenses, which can be quite exclusive, so watch out.

 

Pre-Existing Conditions

If the application process involves a medical questionnaire, they’re looking for pre-existing conditions, and if you have one, they’ll often refuse to cover you for future related incidents. I had exercise-induced asthma for a short time when I was 16 years old, and now – almost 20 years later – I have an exclusion on any claims that may arise related to asthma. Go figure.

Even if the policy doesn’t have a medical questionnaire, a pre-existing condition is something that you knew about or had symptoms of prior to your application. And some policies exclude all pre-existing conditions for the first 2 years. So if you make a claim for a heart attack within 6 months of getting a policy, and the insurance company finds out that you saw a doctor 3 months before applying for the policy with complaints of chest pain, it’s a pre-existing condition and you might not be covered.

 

Premium

The money you pay the insurance company for coverage.

 

Repatriation

Sending your body back home to your family if you die abroad.

 

 

Questions? Experiences?

Does this answer your questions about travel medical insurance / expat insurance for long-term/full-time travelers? Are there any travelers out there who would like to weigh in with their own experiences or advice? Let ‘er rip in the comments!

 

 

{ 20 comments… read them below or add one }

Andrea March 5, 2012 at 11:08 am

This is a really helpful explanation! It’s really important for travellers and expats to have the right kind of insurance and I think this is an area where people are often unsure what is available.

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Anthony @ Culture-ist magazine March 5, 2012 at 11:32 am

Very informative post! We never travel without supplemental insurance and would always recommend having insurance to folks traveling no matter the length of a trip. With travel and healthcare being so costly these days, it’s a must.

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Gigi March 5, 2012 at 3:50 pm

How does one go about finding a broker?

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theprofessionalhobo March 5, 2012 at 4:45 pm

Thanks, @Andrea and @Anthony! I do believe that hedging our bets with insurance is very important, and I’ve had a few personal experiences to support why it’s important too.

@Gigi – I found my broker online, simply by doing a search then checking the company out. I think my first search was specifically for travel insurance and I stumbled on a broker (who I used), and after that experience my subsequent searches for insurance were specifically for a broker.

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Dick March 6, 2012 at 3:15 am

Hi Nora,

Here’s another tip, but maybe you have done that already or I missed it, you can also digitize the papers and forms and then e-mail it to yourself . You can also do that for other stuff like passports and what have you.

Cheers,

Dick

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Bula @ The Irreverent Traveller March 6, 2012 at 5:40 am

Oh, I wish I had seen this post before I left. This was one of the things I was most worried about when travelling long-term. Bookmarked for future consultation.

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Meg | One Love Meg March 6, 2012 at 8:46 am

My boyfriend and I are looking into plans now and this is extremely helpful. Thanks for doing all the hard work for us.

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Erick Widman March 6, 2012 at 6:45 pm

Great info!

I was happy with the reasonably-priced international health insurance coverage I bought for a few years. It was less than $1K USD for a year and required that I be out of the U.S. for more than 6 months. I got it through a broker as you also advise above. Ciao!

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theprofessionalhobo March 7, 2012 at 12:33 pm

@Dick – Yes, I do love to digitize important documents, but I don’t like to email them to myself, since email is far from secure. Instead, I encrypt and store them on my computer, on a USB stick, and on my external hard drive (and all three are separate when I travel to reduce the chances of losing everything).
Here’s more on how I gather and travel with important documents:
http://www.theprofessionalhobo.com/2012/02/financial-travel-tip-15-official-documents-and-preparing-for-travel/

@Bula & @Meg – I’m glad this was helpful!

@Erick – That’s a good price. How did you find your broker?

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Erick Widman March 7, 2012 at 6:02 pm

Hi Nora – I used IMG Global (imgglobal dot com) and they set me up.

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Sunny March 9, 2012 at 2:54 pm

I think there are a few areas that long-term travelers should look at:

(1) Hospital and Surgical insurance (H&S): take care of your H&S bills when you are overseas. This should preferably be:

(1a) guaranteed renewable (GR) until at least age 85. Most travel insurance are classified as ‘general insurance’, which is distinct from the ‘life insurance’ category. The ‘life’ category offers the guaranteed renewability feature for many of its H&S products, whereas the ‘general’ one generally doesn’t. If you health deteriorates, you may not be able to renew your H&S under a ‘general’ category. It is important to keep at least 1 H&S which is GR to ensure that our retirement fund won’t be wiped out in the event of us developing a costly disease and being rejected renewal of a non-GR H&S;

(1b) affordable. For this feature, it may be wise to get a GR H&S that covers a limited geographical area, which is generally cheaper than one that covers globally including USA. This GR H&S might be taken at a ‘medical base’ (MB) country where you’d wish to be treated in the event of a major disease like cancer or heart attack. The country should have good medical facilities that are affordable and accessible, and allow you to stay long-term for medical treatment if you need to. It may be your home country or a country where you’d secured a long-term VISA through investment or other schemes;

(1c) cover countries where you need it:- If you mainly travel within a region such as ASEAN, you might want to buy a GR H&S that covers that region as well as your ‘medical base’ described above. For example, you might choose Malaysia or Singapore as your MB, and you spend most time in ASEAN, so taking up a GR H&S that covers ASEAN instead of just Singapore or Malaysia may be suitable if the additional cost is justifiable. But if you travel to different regions, then you may need only a GR H&S covering just MB because you want to observe rule (1B), leaving medical cover for other areas to a (non-GR) Travel Insurance policy’s care;

(1d) which you can satisfy the ‘residency requirement’ (such as that you must not be continuously out of the country for 90 or 180 days where the insurer is. Unless a H&S is designed for ‘global’ coverage, many of them have the requirement that you must not be out of the covered region/country consecutively for a period of, say, 90 or 180 days. If this ‘residency requirement’ is breached the policy may be terminated.

(2) Long-Term Care (LTC) insurance. If you are unable to care for yourself, and need to be nursed in a community hospital, then it’s going to cost a lot of money. Sometimes, a person may require LTC not for life, but for a few years (e.g. after a car accident). LTC can be costly. This policy usually can be bought from your home country as it covers globally.

(3) Travel Insurance (TI). As it usually excludes pre-existing medical conditions, and is non-GR, it’s not ideal as the only medical cover to rely on. But it does cover for many things like accidental injuries, loss of money and belongings, etc. You should check to see whether a TI covers you even if you are not a resident/citizen of the country where it’s issued, or DON’T commence and conclude your trips there.

Of course, there are other areas such as life insurance to look at if you have dependents or wish to leave behind a gift for a charity or loved one when when pass on. The above three policies would be what I want for myself if I travel long-term after I’d saved up enough to be financially independent to do so. But I think the other often-forgotten risk is that of inflation. Long-term travelers should hedge this risk of their retirement savings losing purchasing power as a result of inflation.

Disclaimer: The above are not meant to be advice to buy any particular product, and comments are made on general terms. You must seek advice from a professional financial planner to assess your particular needs before buying any insurance products. The author is not responsible and liable for any losses that you incur as a result of acting on the comments above.

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theprofessionalhobo March 10, 2012 at 2:13 pm

@Erick – Yes, I had IMG Global at one point and it served me well.

@Sunny – Thanks so much for your informed advice! Good tips.

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Dana June 23, 2012 at 9:57 am

Thank you for the tips! I have learned a lot from this blog post. I was just browsing around because I was about to get a travel insurance from nib http://www.nib.com.au/travel-insurance and I was pretty nervous because I honestly do not have a clear idea on what to do or what to ask for. This post helped me a lot. Thank you!

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Alastair December 7, 2012 at 4:56 pm

Hi all, I have done a great deal of research into travel insurance – because it’s a worry bigger than any other I can see. I’m a New Zealand citizen, wanting to head off without ever returning… a big brave step! The insurance policy which seems to come way ahead of populars like World Nomads is the “Seven Corners’ Reside Prime”. I even checked with Lloyds that Seven Corners is genuine, and not a fly-by-nighter. On the surface, this policy appears to tick every good box and only 2 bad boxes: dental is cheaper if you pay out-of-pocket no matter what the cost, and it won’t cover you at sea (which wipes out quite a bit of fun stuff). I am worried about what insurance to choose, because, like most people, I’ve been shafted nicely with insurance in the past. My view? They’re all criminals, out to take and take in a one-way paying relationship. But what’s your view? If you’ve done extensive insurance research, what is your conclusion? If you’ve investigated Seven Corners’ Reside Prime, what is your conclusion? Regards.

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theprofessionalhobo December 8, 2012 at 8:16 am

Hi Alastair,
I have no experience with or knowledge of Seven Corners, but it looks like you’ve done your homework to ensure they’re going to be there for the long run. (Good tip! Go with big well-established insurance companies so there’s not as much risk of them going bankrupt on you!)
And yes, insurance companies are out to keep as much money as they can, and I’ve had some hellish claims experiences that were dragged out for months. But with almost obsessive attention to detail and keeping copies of everything, you can indeed get what you deserve when the time comes. Know your policy inside and out! (Yes, this means read the fine print, people)!

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Michael January 17, 2013 at 2:24 pm

Hello and thanks for this helpful article.
Wow- so much to learn and understand.
I am now seeking insurance as we are about to have our 1st child. We will be in Bali fulltime and it is a tricky position to be in. I have followed all the links provided and they have been helpful. Now for the deeper research.
I will post about my findings and link to this great resource. For more on us and our findings, please check http://balifloatingleaf.com/
thanks again for this valuable information!
Warm regards,
Michael

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theprofessionalhobo January 18, 2013 at 1:36 pm

Hi Michael – I’m glad this information was useful in your quest for insurance, and enjoy Bali! Floating Leaf looks like a beautiful retreat – is it yours, or are you planning on working/volunteering there?

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Michael January 18, 2013 at 1:43 pm

Hello Nora and Thank you
I have been following your blog and tweets for quite a while now and really appreciate your views, hard work and quality posts.
Yes, Floating Leaf Eco-Retreat is our project and passion. We look forward to welcoming you there one day. I really appreciate your kind words and support.
I still have not settled on an insurance option but hopefully I can wade through it again today (how exciting, right?)
Well I wish you much more exciting things on your plate for the weekend and thanks again,
Michael

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theprofessionalhobo January 18, 2013 at 2:04 pm

Thanks Michael, and I’ll be sure to visit you when I’m in Bali! :-)

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Michael January 18, 2013 at 2:38 pm

Wonderful. We look forward to it.
Swift and safe travels,
Michael

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