Travel Insurance | Travel & Health Guide, 2016 Online Book
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Key Points:

  • Foreign hospitals and doctors (with few exceptions) won't accept your regular health insurance and usually require payment (or up-front deposit) with cash or a credit card at the time of treatment or hospital admission. Your insurance company may reimburse you later (for approved treatment only) after your claim has been processed and the trip long over.

  • Travelers can usually avoid this problem with a travel health insurance/assistance policy. These policies guarantee on-site payment of hospital bills abroad.

  • Doctors' office or clinic visits and hotel/house calls still require cash or credit card payment, even if you have extra travel insurance.

  • These policies also include another essential benefit—medical evacuation, by air ambulance if necessary, to a higher level, or more appropriate, medical facility. Assistance companies can also help with other matters— obtaining prescription drugs, legal matters, lost documents, and more.

  • There are many different policies available that cover different types of overseas travel, including: short-term, frequent, long-term, study abroad, and living abroad. There are also many medical assistance companies. They vary in size from having one small office to having offices or representatives in many countries. Generally, it is wise to choose a policy associated with a larger assistance company with offices in many countries.

Why Travelers Need Trip Insurance

Health insurance in the United States is characterized by its diversity. There are a multitude of plans with different costs, benefits, deductibles, exclusions, and restrictions. However, many insured travelers lack adequate travel protection. Government sponsored health programs such as Medicare almost never cover treatment received in a foreign country.* Employer-sponsored plans usually limit overseas coverage to emergency care only (and the burden will be on you to prove it's an emergency). Emergency medical evacuation is almost never covered. Even if you're traveling on business, you may have significant gaps in your coverage.

Before you travel, check your existing health insurance policy to see what it pays for. It will probably reimburse you for 100% of the cost of emergency treatment abroad, excluding any deductible or co-payment. You normally will have to pay the doctor or hospital at the time of treatment, or before hospital admission—perhaps thousands of dollars. Of course, for this to work the hospital must accept your credit card and your card must have a sufficient credit limit. You then hope your insurance company will reimburse you later. This, however, can get complicated: did you notify your insurance carrier within the 24-hour time period required for hospital admission, or other treatment? (This requirement may be waived for emergencies.) Do you have copies of your treatment record and medical bills in English, or are they all in a foreign language? The insurer may not accept incomplete records or bills that are not itemized.

The same dilemma occurs if you need emergency medical evacuation, perhaps by air ambulance. Once again, you will have to pay up front, but air ambulance transport can be much more expensive—sometimes tens of thousands of dollars.

Travel Insurance with Assistance

Imagine the following scenario: You find yourself hospitalized with a serious illness in a foreign country and the doctor caring for you speaks hardly any English. You're being treated with an unfamiliar drug, and you are worried about an allergic reaction or a serious side effect. The doctor then says you may need surgery, but you're not sure of the diagnosis, or the surgeon's qualifications. The situation is becoming more and more like a nightmare. Where do you turn for help and advice? If you find yourself in this situation, then having travel insurance with assistance can be a godsend. Following are some of the reasons:

Medical Monitoring Travel insurance with assistance gives you a 24-hour telephone number of an assistance center where multi-lingual personnel, backed up by physician specialists, are available around the clock to evaluate your treatment and to monitor your medical care.

Emergency Medical Transport/Repatriation If it is determined that you need to be transported immediately by air ambulance, or another form of emergency medical transportation, to a higher level or more appropriate medical facility, the assistance center will arrange for it and pay the costs, up to the policy limit. (Some policies have an unlimited evacuation benefit.) And if you're unable to return home unassisted after your condition has stabilized, the insurer, working through the assistance center, will arrange and pay for transport (with a qualified medical attendant) so that you can recover closer to home and family.

Emergency Medical Payments The assistance center will also guarantee payment to those providing your medical care or, when necessary, can advance money for on-site payment. This means that, aside from possibly paying a small deductible, you will not have to make cash payments yourself, provided the policy covers the illness and the doctor and/or hospital will accept the travel insurance (which they often will).

Traveler's Assistance Assistance centers can also help with a variety of other problems, including replacement of lost prescriptions, physician referral, or finding you a local dentist. Non-medical assistance includes travel document and ticket replacement, emergency cash transfer, emergency message center, legal assistance (e.g., lending you bail money, locating a lawyer), and assistance in replacing a lost prescription or lost passport or other document. (Some of these services are also provided by the Bureau of Consular Affairs in the U.S. Department of State, but the assistance companies often have a faster, more complete response.)

Travel Safety Assistance This is a growing service area because of geopolitical turmoil and terrorist threats. Some assistance companies have the capability to locate travelers and provide them with updated health and security e-mail alerts. The recent tsunami in Indonesia has made many travelers, as well as their employers, aware of the need for communication when a disaster strikes.

What Else Can These Policies Cover?

Accidental death and disability—For additional fees most policies will cover accidental death and disability (AD&D), lost luggage, collision damage waiver, and trip interruption or cancellation insurance. Consider whether you really need this extra coverage. If you already have your own life insurance, the small AD&D benefit is probably not worth the cost; and lost luggage may be covered by your homeowner's policy.

Trip Interruption Insurance This can be an important money saver if illness or other problems force you to miss your scheduled flight. Some medical emergency policies offer this benefit in the basic package or as an optional benefit available for an additional fee. A trip interruption policy should cover the following:

  • Interruption because of sickness, injury, or death to you, members of your immediate family, your traveling companion, or your business partner
  • Accidents or emergencies that cause you to miss a scheduled departure (or connection) when you're traveling to the departure point
  • Travel delays caused by an unannounced strike, bad weather, or a hijacking
  • Terrorist-caused incident at destination that results in trip cancellation

How Much Travel Insurance Do I Need?

Some policies let you buy up to $100,000 of medical coverage, but if you are a tourist or short-term traveler it is unlikely you would ever need this much insurance to pay medical bills abroad because (1) travel policies pay only for emergency medical care; (2) if sick or injured, you most likely will be repatriated home once your condition has stabilized; and (3) medical care abroad (at least in less developed countries) is usually less expensive than in the United States.

Be sure, however, that the policy's evacuation benefit is adequate. A long-range chartered air ambulance can cost $75,000, or more. For trips to the Caribbean or Europe, an evacuation benefit of $30,000 is probably sufficient, but if you are going on a trip halfway around the world, you want a policy that pays unlimited evacuation costs, or a high dollar amount, for example, $100,000.

Types of Policies

You can purchase coverage for a single trip, or buy an annual subscription or membership that covers multiple trips throughout the year. The cost of shorter trips is about $4 to $8/day per person, depending on age. An individual annual membership typically costs $450 to $475 for a $25,000 medical benefit and unlimited evacuation pay- ments. There are also various policies for corporate travelers, students abroad, and people living abroad.

Exclusions—Read Carefully!

Read the policy carefully to see what is not covered. Exclusions and restrictions vary among the policies. For example, most policies pay for complications of pregnancy, but some will not. Sports activities such as scuba diving, sky diving, and mountain climbing are usually not covered, but separate scuba coverage is available from Divers Alert Network (DAN).

Probably the exclusion of greatest significance to many travelers—particularly the elderly—is the exclusion for preexisting medical conditions. This exclusion could prove financially burdensome if a condition becomes active during travel and requires emergency treatment or medical evacuation. An exclusion may state that coverage is excluded for “any injury or sickness (or complications arising therefrom) which manifests itself, or for which treatment or medication was prescribed or taken in the 180 days immediately prior to the period of insurance.” However, other policies may be less restrictive, excluding only “any condition that has required treatment in the past 60 days, unless the condition is controlled through the taking of prescription drugs or medication and remains controlled throughout the 60-day period.” In some cases, there are no exclusions for preexisting conditions provided you purchase the insurance within 7 days of making a deposit on your trip.

Travel Insurance with Assistance

There is a very large number of policies available, covering almost every travel situation. Each company's website offers the best overview of their products.

International SOS Assistance, Inc.
3600 Horizon Boulevard, Suite 300
Trevose, PA USA 19053
800-523-8930 or 1-215-942 8000

Membership provides assistance (e.g., medical monitoring) as well as worldwide emergency medical transport. There is no cost limit on the evacuation benefit and no preexisting condition exclusion for medical care, if not treated within 60 days. SOS maintains offices in 50 countries and alarm centers in 24 countries, and staffs their own medical clinics in China.

Worldwide Assistance Services, Inc.
1133 15th Street, N.W., Suite 400
Washington, DC 20005
800-821-2828 or 1-202-331-1609

Comprehensive emergency medical evacuation and medical coverage available on a per-trip or annual basis. Individual, student abroad, and corporate programs. Their Travel Assistance International Plan A provides up to $60,000 in medical benefits plus $1,000,000 for emergency medical evacuation. There are 36 assistance centers worldwide and coordinators in 200 countries. Policy covers medical complications of pregnancy through the third trimester. $100 deductible. Preexisting conditions: 60 days.

MEDEX Assistance Corporation
8501 LaSalle Road
Suite 200
Towson, MD 21286
800-732-5309 or 410-453-6300

$100,000 medical and air ambulance coverage for $4 a day. Age 71 and older, $5 a day. $25 deductible. SCUBA coverage, $1.00 a day extra. Preexisting conditions: 6 months.

International Medical Group (IMG)
407 N. Fulton Street
Indianapolis, IN 46202
800-628-4664 or 309-296-0600

IMG offers a variety of plans, including coverage for extreme sports, long-term major medical coverage for people residing abroad. Coverage up to $5 million is available. Plans include emergency evacuation, in-patient and out-patient coverage, and choice of deductibles.

Wallach & Company
107 West Federal Street
Middleburg, VA 20118
800-237-6616 or 540-687-3172

The HealthCare Abroad policy pays $250,000 in benefits, and will cover downhill skiing and SCUBA up to $10,000. Coverage is available up to age 85.

Credit-Card Assistance

American Express will pay all costs for emergency medical evacuation to the nearest adequate medical facility for holders of the American Express Platinum and Centurion cards. American Express will also assist any cardholder with a medical problem overseas. For example, American Express can help cardholders arrange air ambulance transport, or find a doctor overseas, but they won't pay the cost.

American Express Global Assist hotline: 800-345-2639 or 202-331-1688 collect from overseas.

Scuba Diving Insurance

Divers Alert Network
800-446-2671 or 919-684-2948

DAN scuba diving insurance is secondary coverage, available to DAN members. The scuba diving insurance policies listed below are in addition to DAN members' automatic $100,000 DAN TravelAssist medical air evacuation benefits.

DAN Standard Plan

$45,000 (maximum lifetime benefit) coverage for decompression illness incurred within the 130-foot depth limit.

DAN Plus Plan

$50,000 (maximum lifetime benefit) coverage for decompression illness plus up to $10,000 in accidental death/dismemberment benefits resulting from a covered diving illness or injury, plus up to $10,000 in total disability benefits.

DAN Master Plan

$125,000 (maximum lifetime benefit) coverage for decompression illness and ALL covered in-water injuries, plus up to $15,000 in accidental death and dismemberment benefits resulting from a covered diving illness or injury, plus up to $15,000 in permanent total disability, plus the policy pays up to $1,500 for accommodations, $1,000 for airline tickets, and $2,500 for lost dive equipment.

*Medicare does not cover health-care costs outside the United States and its territories, except under limited circumstances in Canada and Mexico. For this coverage, you will need a Medigap policy, but not all Medigap policies cover foreign travel, and the policies vary from state to state. For example, in Massachusetts, three out of the four available Medigap plans do provide coverage for travel abroad. (These are Core Policy with Rider, Supplement 1 and Supplement 2).