Financial Travel Tip #90: Expat Insurance vs Travel Insurance

by Nora Dunn on July 27, 2013

 

Which do you need – expat insurance or travel insurance – to cover your medical needs while you travel?

As usual, this depends. I’ve discussed expat insurance and travel insurance separately, but I’ve never compared the two.

 

To help discern the differences and structure the right policy for your needs, I chatted with David Tompkins of Expat Financial (an international insurance brokerage that sources travel insurance, expat insurance (aka: international health insurance), and other insurance needs for people living abroad.

 

Who Needs Travel Insurance?

“Someone who is traveling for a year or less. Some travel insurance plans can cover you up to two years, but remember that travel insurance will only cover emergency claims and will not cover you back in your home country,” says Tompkins.

He also suggests that you maintain your health coverage back home (since most travel insurance policies don’t cover you in your home country).

 

Who Needs Expat Insurance?

“The perfect candidate for international health insurance [expat insurance] is someone who is traveling or living abroad for more than 12 months,” says Tompkins It’s a comprehensive medical insurance policy providing coverage around the world. “An international health insurance plan will provide both emergency and non-emergency care both abroad and possibly back home.”

 

 

Tips for Structuring Your Policy

Regardless of whether you choose travel or expat insurance, here are some tips:

Evacuation and Repatriation

Tompkins highly recommends “obtaining a plan that includes evacuation and repatriation care, especially if you are residing or traveling in a developing country with limited medical facilities.”

I can attest to this, having been mercy to the insides of a few hospitals in my own travels.

 

Pre-Existing Conditions

Most insurance policies exclude any coverage that is related to any pre-existing condition you have. If there are complications or related illnesses/injuries on the road, this could result in a pricey bill for you. Tompkins says a solution to this is to “try to obtain a policy that can underwrite you medically and potentially cover your medical condition for an extra fee.”

 

Pregnant, or Planning to Be?

Travel insurance plans won’t cover pregnancy related medical visits or illnesses, but “an international health plan [expat insurance] may cover pregnancy coverage after a waiting period of 12 months.”

 

Choose a Reputable Company

“Make sure you get a policy with a large and secure insurance company that will stand behind their coverage and be able to process your future claims,” suggests Tompkins. Look for a company with long history and a secure financial rating, read the policy and terms to ensure they cover things like direct reimbursement to hospitals, and search for online reviews to see how the customer experience is.

 

Use a Broker

I’ve attested to the virtues of using a broker before; they can source a policy that best meets your needs, they generally only work with reputable insurers, and they help you through the application process. I haven’t used Expat Financial, but I do see that they represent three insurance companies that I’ve had policies with before, so they seem to have their bases covered.

And don’t worry, you don’t pay a fee to use a broker; they are compensated by the insurance companies.

 

 

 

Expat-Specific Tips

If you know expat insurance is the one for you, keep in mind the following:

 

Vision, Dental, and Extras

“Some expat health plans will also provide the option of obtaining dental and vision care,” says Tompkins. Some of these beefed-up plans also include some coverage for services like massage and physiotherapy.

But remember, the more plush the plan is, the higher your premiums will be. Need for, availability, and cost of these services depends on where you are traveling/living.

I tend to structure the most basic policy I can find to cover me in emergency or costly medical situations (with a high deductible to keep premiums low), and I take care of minor medical needs and doctors’ visits with cash (here’s a comparison of what I’ve paid to see a doctor in a few countries).

 

Including/Excluding USA

Most expat health insurance plans give you an option to include or exclude coverage if you are traveling/living in the USA. “Medical costs are quite high in the United States and many plans will provide you the option of excluding medical care in the USA, which helps reduce the premiums,” suggests Tompkins.

One of the expat insurance plans I owned excluded USA coverage; I justified it in knowing I could buy a small dedicated travel insurance policy covering any time I’d spend in the USA, and I would still save money off the yearly global plan.

(The policy I have now with IMG Global has really attractive global rates – including USA coverage).

 

What Happens to Your Premiums Over Time

Contrary to auto insurance (which rewards no claims with discounted premiums), expat insurance premiums will go up over time. Tompkins says “the average health inflation rate is 10-15% depending on the insurer. Most individual health plans [premiums] are not impacted by your own health claims, but are affected by the claims experience that the insurer is facing in any given year”.

 

Insurance Galore

I’ve written quite a bit about insurance. Dig in:

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

Financial Travel Tip #4: Travel Insurance

Financial Travel Tip #50: Protecting Your Valuables With Property Insurance

Financial Travel Tip #14: Do You Need Life Insurance?

Financial Travel Tip #11: Credit Card Insurance

 

 


 

{ 11 comments… read them below or add one }

Ryan brown July 27, 2013 at 9:51 pm

Been looking into this for my trip to SE Asia…I THINK it’ll be for more than a year, but at least 12 months. Rad tips, thanks!

Reply

theprofessionalhobo July 28, 2013 at 11:47 am

Hi Ryan,
Sweet! If you’re from the US, I believe World Nomads offers travel insurance that can be extended beyond a year, if you know your trip is going to be of limited duration but might surpass a year. (You can also apply for expat insurance from the road after having travel insurance coverage for the first year – which is what I did).

(I can’t say I had a stellar claims experience with World Nomads however….it was a fight every step of the way….but then again it’s somewhat indicative of insurance claims in general. Here’s more on that:
http://blog.travelunderwriters.com/en/blog/2013/07/11/what-not-to-do-when-making-an-insurance-claim/)

Reply

Bob Hobson July 30, 2013 at 10:34 am

How about a little insurance against losing your stuff? We all know it happens even with big ticket items like laptops, iphones, etc. Mystufflostandfound.com has a simple solution to this problem.

Reply

theprofessionalhobo July 30, 2013 at 10:56 am

Hi Bob – I haven’t heard of mystufflostandfound.com….does it cater to international travelers?
Here’s my take on property insurance:
http://www.theprofessionalhobo.com/2012/10/financial-travel-tip-50-protecting-your-valuables-with-property-insurance/

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theprofessionalhobo July 30, 2013 at 10:59 am

Oh I see….it’s a service that allows items that are lost to be returned to you….contingent on the person who finds the item calling it in (I’m assuming for a reward).
I used TrackItBack (now debunked) which is a similar service.
The problem is it doesn’t address issues like damage and theft, which are prominent on the road. Hence: property insurance if you want to protect your valuables.

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Deborah Harmes July 31, 2013 at 9:36 pm

We used World Nomads for our 6 month trip that turned into a 2-1/2 year adventure. They DID pay the claims for my hospital stay in France last year, but it was like pulling teeth to get them to actually pay up. I was quite frantic after we got a notice from the local French government that we could get served a notice by the town police if we didn’t pay the outstanding bill. They ONLY paid after I threatened to document the entire thing on my website which is read by thousands of people worldwide each month. And they insisted that I get a statement from my doctor back in Australia stating that it was not a pre-existing condition. All of that back and forth paperwork took additional time. We no longer use World Nomads for that reason and when we travel overseas again next year (we are back in Melbourne now), we’ll be using Insure and Go because you can declare anything you’ve been treated for like that hospital stay in France, pay a small extra bit of premium, and you are completely covered. It really is worth shopping around because some of the travel insurance policies out there have sneaky little ‘fine print’ that you MUST make sure you understand ahead of time. Good article, by the way!

Reply

theprofessionalhobo August 1, 2013 at 8:31 am

Hi Deborah,
I’m sorry that you as well had a less-than-easy experience with World Nomads. I would say that the ease of claiming more to do with the circumstances than the insurance company (they’ll all drag their heels to an extent – I filed a claim in Hawaii that the insurance company – a different one – took ages to pay the hospital…we were getting threatening letters from the hospital as well).
It’s all the more reason to not over-insure, and to pay strict attention to the policy wording and retain all relevant paperwork.
Have fun on your next trip….and may insurance claims NOT be a part of it! :-)

Reply

Deborah Harmes August 1, 2013 at 9:10 pm

Thanks, Nora.

I was quite interested to read your article on the differences between Expat & Travel insurance because at the time that I had to make my claim, we were actually living and working in France — thus making us expats. It was an unexpected life change because we had left Australia thinking we were taking a 6 month ‘gap year’ adventure for 2 middle aged folks, and we ended up living in Europe for 2 and 1/2 years.

At least I am now armed with MORE information in case we decide to go crazy and move back there.

Best regards to you.

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theprofessionalhobo August 2, 2013 at 5:02 pm

Hi Deborah,
How exciting! Hopefully you’ll be able to take to the road again (possibly with different insurance this time – ha ha)! :-)

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MightyTravels January 14, 2014 at 7:20 pm

AMEX has a good Medical Insurance Program that has no deductible and costs just $10/month for trips up to 45 days at a time.

Reply

theprofessionalhobo January 16, 2014 at 1:29 pm

Hey Mighty – Not bad! Good if you’re in the market for general travel insurance, as opposed to expat insurance.

Reply

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