10 Tips for Buyers of Travel Medical Insurance
Here are 10 tips you should consider when evaluating products, selecting a broker, and making a purchase:
1. The Plan Maximum
It is possible a claim will exceed $2 million as medical costs increase and with the chance of being hospitalized in intensive care for months battling COVID-19. Many travel insurance products have $5 million in coverage. Some products offer $2 million or less in coverage and charge extra premium to provide $5 million coverage.
2. The Benefits
You want to travel knowing you are covered for any medical emergency that may occur. Most travel insurance products provide coverage for medical emergencies due to a sickness or an accident. The coverage can vary significantly so be sure to read the policy. For example, check that the coverage includes:
Land & air ambulance and remote location evacuation, such as removal from a cruise ship at sea
Incidental expenses if you are hospitalized and those of family members flown in to be by your bedside
Professional and paramedical services
Return to Canada benefits for you, your family members, and your car and/or trailer
3. Coverage for Pre-existing Medical Conditions
Pre-existing medical conditions are covered as long as they have been “stable” for a specified period of time. Stability periods usually range from 90 days to one year depending on the product so be sure to read the policy. One product offers a 7-day stability period for an additional premium.
4. The Price
Rates are based largely on claims experience, the underwriter’s philosophy about specific medical conditions, commissions paid to the broker, and the factors outlined in points 1, 2, and 3 in this blog. Some brokers have lower overheads and lower commissions and can offer deluxe benefits and coverage at lower rates.
When evaluating the various “Early Bird” and other discounts, consider whether or not you are getting the discounts now or later. Promises of future discounts sound good but your health could change and the premiums could go up significantly. A snowbird in the hand is worth two in the bush!
6. Daily Rates versus Pre-calculated rates
Many products offer daily rates so you pay for the exact number of days you require for your trip. Some products have trip length “ranges” so, for example, you pay the same premium whether you travel 100 days or 105 days. Some precalculated premiums also cover up the fact that, in some cases, when you divide the premium by your trip length, the resulting daily rate is higher for some shorter trips!
7. Is the Agent Licensed?
When you speak to an agent to get questions answered or to purchase insurance make sure he or she is licensed in the province or territory in which you live. Travel insurance can only be sold by licensed agents. If the insurance brokerage puts an unlicensed agent on the phone, you should deal with a different brokerage.
8. How Many Different Products are Offered by the Broker
If a broker offers too many products, it may not generate enough volume on any one product to negotiate good rates with the insurance company. Some brokers, working with an insurance company, have developed an exclusive product(s) that is not available from other brokers. If a broker only sells one (or even two) products, it may not best meet your needs because, as you know, one size does not fit all. You are more likely to find the right product and price from a broker offering 3-4 products including 1-2 exclusive products.
9. Buying Insurance
Some brokers require full payment when you buy and others allow you to pay in instalments. It is your money so why pay in full if you can keep your money invested a little longer? Travel Insurance Office Inc. (TIO) will let you lock in its Early Bird offer and low rates with a fully refundable $50 deposit. The balance is due along with your completed application two weeks prior to travel.
Some brokers have administrative fees and service charges! You may be penalized if you cancel for a non-medical reason (for example, you found a better deal), you want to change your travel dates, you want to extend your coverage, or you return to Canada earlier than planned and request a partial refund. At least one broker does give refunds if you request a refund of 1 to 9 days of unused coverage!
Many “Early Bird” offers require that you to submit your application (with travel dates) and full premium before you depart and usually many months before you return to Canada. Life happens and plans change and, long after you submitted your travel dates, you may want to extend your coverage or come home earlier than planned. You should not be penalized! When shopping around be sure to find out if there are administrative fees and/or service charges.