Travel and Health Insurance
Article by: Ed Ditching - CFP, GBA
You have planned your vacation and look forward to having a nice time in the sun, visiting sites or relatives, or maybe just taking in the culture of the country. With all the pleasant thoughts of a vacation are the realities of an unforeseen bout of food poisoning, broken bones, accidents, lost luggage, etc. Only a pessimist may think of these, but isn’t it comforting to know that you have thought of a Plan B for your vacation if something goes wrong?
There are numerous stories of visitors falling ill or having a stroke or heart attack while in the country. Hospital expenses involved can wipe out your savings and even max out your credit cards. Luckily or in truth, wisely, some of these visitors have hosts who had the foresight of spending a few dollars more to cover their vacationing guests with Visitors to Canada travel insurance.
For Canadians traveling abroad, the same risks apply. Cost of hospitalization and medical care in the US for example, are far more expensive than in Canada. One should keep in mind that OHIP will only pay up to the extent of how much it will cost if care was done here in Ontario. Thus, while provincial plans would cover $75 - $800 per day for a hospital stay, American hospitals could cost several thousands a day - even as high as $10,000 a day for intensive care! Doctor’s fees tend to be higher as well.
Ask yourself - “What if…..” and you will realize that spending a few tens of dollars for travel health insurance can make sure that the thousands of dollars you’ve saved for vacation really goes to your vacation.
To help you out during your out of the country summer trips, or for your visitors coming to Canada, here are a few important pointers to keep in mind:
•• Know what you’re covered for. Travel health insurance usually covers emergency (emphasis on emergency) hospital or other medical services, prescription drugs, hospitalization and even emergency or accidental dental services. If you have to get back to Canada for immediate medical treatment, your plan might pay for a plane ticket with a medical attendant accompanying you; or emergency air ambulance. Your coverage may also get a relative to your bedside or return your vehicle back home.
•• If your credit card offers automatic coverage, check for the “some restrictions apply” clause. It’s usually tough to figure out just what you are covered for with all the special deals, offers or programs we are supposed to be getting from credit cards, memberships, etc. Some require that you have to book all travel and accomodations on that card or have limitations on the length of your trip. Compare the coverage available through the card with those that are offered through a separate travel health insurance package.
•• Your company’s group insurance plan may have coverage. Again check it out with regards to purpose of travel (is it for business only?), length of travel, the place you are traveling to and limitations.
•• Insurance is designed to cover unforeseen emergencies, not the costs of what has a good chance of happening. Pre-existing conditions are the source of a lot of disputes between insurance companies and travelers. Each company sets its own definition of “pre-existing conditions”. Some will cover certain conditions if they have been stable for six (6) months, some use nine (9) months as benchmarks. Insurers look for deterioration of your condition, new or severe symptoms or change in medication for that condition.
•• Insurers are also averse to covering risky activities like scuba diving, bungee jumping, rock climbing, sky diving or hang gliding. You may not be specifically asked about any conditions or activities before you buy insurance - read the literature and policy, ask questions to know what is and what isn’t covered.
•• Costs will depend on age, your destination (US or non US) and state of health. Travelers with medical conditions should request for an “underwritten” plan - that is, their conditions are evaluated before being approved for coverage - to make sure.
•• In the US, hospitals bills OHIP first then your travel insurer. Doctors may prefer other arrangements - you may have to pay up front and get reimbursed later. In other countries, it is important that you advise the insurer, as soon as possible, that you are getting medical care. Your insurer may make arrangements to be billed directly depending on your case and if your insurer has worlwide affiliate network. In any case, keep all receipts as costs not accepted may be tax deductible. Always keep the emergency assistance number for your travel insurer!
•• If you have homeowners or tenants insurance, your luggage is likely covered under “goods temporarily away from home”. There may be a deductible, but check out with your broker the extent of your coverage - for example with regard to jewelry, laptop computers, etc.
•• Remember, bank tellers and travel agents are not trained insurance representatives. They may not know all the ins and outs. Read the policy, ask questions and assistance from a qualified insurance broker or call the company yourself if you don’t understand your coverage.
•• If you are a frequent traveler, it is wise to look into an annual plan that will cover you for the whole year rather than purchasing insurance every time you leave the country.
Remember the last time you packed your travel bag with bandages, antiseptics, analgesics, anti diarrhea pills, thermometer, etc. - just in case? It didn’t take a big toiletry bag to fill up $100 worth of drugstore goods. Now imagine how much it would cost if you became seriously ill on your holidays beyond what you packed for. Health care is expensive and often exceeds the savings we’ve stored up for our vacation. Travel health insurance can cost only a few dollars a day. Contrast that with thousands a day if you get ill. Leaving home adequately covered for any emergencies is simply a matter of being dollar-wise!
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Ed Ditching - CFP, of Millenium Financial Services is a Financial Planner and Group Benefits Specialist based in Toronto, Ontario, Canada. You can email him at ed@milleniumfinancial.ca or phone him at (416) 491-1240 Ext. 104 should you require his services. You may also visit his website at www.EDitching.com
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