4 Travel Insurance Tips to Guarantee Peace of Mind
The accident happened in Guangzhou, China, at a formal Chinese banquet. It was the kind of banquet you’ve no doubt seen in movies, where 15 or 20 people sit around a circular table and plates and bowls of food spin in the center on a lazy Susan.
It all happened very quickly. I went in for the egg-drop soup, lifting the ladle just as another guest decided to spin the lazy Susan back toward her. This caused the cistern of soup to hit the ladle, which caused the ladle to tip toward the hand I was holding the bowl with, which ended up with scalding-hot soup all over it.
Within 20 minutes, I was inside a Chinese hospital, where a doctor and her nurse gingerly applied some sort of magical cream, then wrapped my fingers in gauze. “Twenty-four hours,” the doctor told me, “and you take this off, and it’s like nothing ever happened.” I asked how much I owed, and she said, “Nothing. We bill your insurance carrier, Aetna.”
Health insurance is something I rarely ever considered when I was a full-time employee back in the States with comprehensive health insurance through my employers. But these days I’m a digital nomad, living in Prague and freelancing from coffee shops and hotel rooms from Ireland to Lebanon to Russia. And though I am a healthy 53-year-old, health insurance is forever on my mind.
Funny how the lack of employer-sponsored coverage focuses one’s mind so acutely on healthcare. My guess is that it’s a function of having grown up and lived in the U.S., where health costs are so out of whack with reality—and the rest of the world—that we Americans generally fear that the slightest hang-nail will bankrupt us if we don’t have health insurance.
Thankfully, that’s not a fear in much of the rest of the world. Here in Prague, even though I have local health insurance (a requirement for my residence visa), I still pay out of pocket for certain procedures. A trip to the dentist for a wisdom tooth issue cost me $35, and the dentist told me a tooth extraction—which I didn’t need—would have been about $85.
Nevertheless, when I’m outside the Czech Republic, I still worry about emergencies that could cost me a small fortune. So, when I’m traveling abroad, I buy short-term travel health insurance. It’s inexpensive and comprehensive, but only if you know what you’re looking for.
As someone who regularly buys travel insurance, I learned how to make a quick assessment of a policy’s value and what kind of coverage I’d need. Here is my advice for buying travel medical insurance:
Know What You’re Looking For
First, let’s be clear on our terms. “Travel insurance” is typically coverage for cancelled flights, lost luggage, etc. Most good travel-related credit cards offer that (and if your card doesn’t, and you’re a traveler, you absolutely need a better credit card). “Travel medical insurance” covers, or, more typically, reimburses covered healthcare costs when you’re away from home. That’s the insurance I really care about when I’m crossing international borders. (Most of these policies also cover travel insurance for lost luggage, etc.)
Second, you should generally avoid any product called “travel protection insurance.” It passes itself off as insurance, but typically it’s not, which means it’s not subject to insurance regulators. These policies can, and often will, deny coverage for costs that it logically should cover if it were true insurance, and they’re frequently larded with severe restrictions that, in the end, often make these products all but useless.
In short: Stick to real, travel medical insurance offered by legitimate insurance companies that are regulated by state insurance regulators.
Here’s What Your Policy Should Cover
The best travel medical insurance policies cover you for:
• Emergency medical and dental costs (dental is sometimes an added fee)
• Hospital costs • Ambulance services
• Prescribed medications
• Medical evacuation and repatriation
• Accidental death and dismemberment
• Sundry travel interruptions/cancellations/delays.
Be sure the policy covers you where you’re traveling. Some insurers won’t cover you in destinations that are on a travel-advisory “no-go” list at the U.S. State Department or the U.K.’s Home Office.
As with all forms of insurance, the policy you buy is only as strong as the insurer backing it. The world is awash in too many sad stories of consumers who buy all types of insurance policies from financially weak—or even fly-by-night—insurers, only to find that in an emergency they have nothing but a piece of paper. As a minimum, stick to insurers with an “A” rating (or the equivalent) from insurance-rating agencies such as Fitch, A.M. Best, Moody’s, or Standard & Poor’s.
And remember the term “primary coverage.” You generally do not want secondary coverage, which only kicks in after another insurer pays first. With primary coverage, you’re filing your claims directly with the travel medical insurance provider, you’re not having to pay two deductibles, and in an emergency there’s no runaround with you trying to coordinate coverage.
How Much Coverage Do You Need?
At minimum, you should buy a policy that covers you for $50,000 in emergency medical care. As I noted earlier, healthcare costs in much of the world are not detached from reality, as they are in America. So $50,000 should be plenty to see you through a week or so in a hospital overseas.
You also want at least $100,000 in medical evacuation coverage. Med-evac isn’t cheap. Costs often start at $50,000, so it’s best to have some excess coverage, just for peace-of-mind.
Even though I regularly travel off the beaten track to what some might consider risky destinations (think Lebanon’s Bekaa Valley), I tend to be conservative when it comes to travel medical insurance.
The last two policies I purchased each provided $500,000 in medical coverage and between $500,000 and $1 million in medical evacuation. That’s probably too much coverage, but when the cost of a policy is just $20.86 for a week, or $187.24 for a couple months— the real costs I paid—I don’t mind dropping an extra $5 or $10 for coverage overkill.
As with all types of insurance, the deductible you choose also factors into the price you’ll pay for a policy. One of my policies had a $100 medical deductible, the other was $500. There’s no rhyme or reason to that; it was purely a function of how the policy pricing changed as I played around with coverage and deductibles. I just went with what I was comfortable paying based on the coverage I was buying and the period of time that coverage would be in force.
The best advice I can give you: Determine the absolute maximum you can afford to pay and set that as your deductible.
Chances are you will not have a medical emergency while traveling, and if you travel frequently, then over the course of multiple trips the cost savings on the high-deductible policies you buy will more than offset the deductible you might ultimately pay one day.
The Best Travel Medical Insurance Companies
This is part subjective, part objective. There are too many carriers I could mention, since there are quite a few very good, financially strong insurers who offer travel medical insurance.
For many of those carriers, though, travel medical insurance is the equivalent of a hobby, meaning it’s something that they offer but not something they really care about focusing on. As such, they tend to price these policies expensively, happy to bring in the marginal bit of income for not much effort. But these aren’t the insurers you should be looking for.
Ideally, you should be getting your insurance from carriers that are specialists in this area, if for no other reason than the fact that their customer service will be highly attuned to dealing with travelers’ medical-claims needs. And when you’re managing a medical matter in some random spot on the globe, the last thing you want to deal with is insurance rigamarole.
For that reason, I believe in the “wisdom of the crowd” when it comes to finding value in a travel medical insurance product. But you must shop around and compare apples to apples. Policies differ markedly from one carrier to another in terms of what’s included in a particular policy.
Some will offer, say, $50,000 in medical coverage and $250,000 in emergency transportation, while others might offer the same medical coverage but only $100,000 in medical evacuation. Some will provide coverage for dangerous events, like whitewater rafting or winter sports, and others won’t.
So, you really need to compare all the key elements to determine what’s best for your needs or your peace-of-mind.
4 of the Best Travel Insurance Companies
As I noted, there are many high-quality insurers offering travel medical insurance policies. But these four insurers stand out as some of the best and will get you going in the right direction as you research insurance for your next trip.
1. Seven Corners. This insurer, based in Carmel, Indiana, focuses on international travel insurance and specialty benefits management. Aside from global wanderers like me, Seven Corners’ customer list includes U.S. government agencies, agencies of various foreign governments, NGOs, corporations, and non-profits.
Plus, Seven Corners has been providing travel medical insurance for a quarter of a century. Though I have never had to file a claim (knocking on wood vigorously), the majority of customer reviews I’ve come across praise the company for its quick claims-paying process and its customer service.
All of that is good enough for me, which is why Seven Corners tends to be the provider I personally use most.
2. Allianz Global Assistance. This is a unit of Germany’s giant Allianz SE insurance and asset-management company. They’re also the world’s largest travel medical insurance company and among the most trusted by the world’s individual global travelers. In fact, Allianz insured the Wright Brothers’ first flight, so they’ve been tied to airline travel insurance literally from day one.
Allianz Global Assistance’s client list includes travel agencies, airlines, credit-card companies, resorts, and on and on. Again, that’s a solid indication of Allianz’s strength and reputation. They’re know particularly for their multi-trip plans for frequent travelers.
3. Generali Global Assistance. This is a U.S. division of Generali Group, Italy’s largest insurer and the third largest in the world. The company earns high marks from global travelers for their products, prices and customer service.
4. John Hancock. Based in Boston, John Hancock Life Insurance Co. has been around for nearly 160 years. The company offers three levels of travel medical insurance, each with $0 deductibles. But the company doesn’t offer an extreme-sports rider, which means if something happens to you while you’re scuba diving, let’s say, this policy won’t cover you.
Written by Jeff Opdyke