Opportunities in Expat Health Insurance Sector

Generally people think of individual International Health Insurance if they are not covered under a group medical insurance program. These policies include worldwide medical protection and also can include evacuation services. Many of these plans have direct-pay with hospitals & global networks worldwide as well as worldwide emergency assistance to help you find the best facilities to treat your conditions. Cost of expatriate insurance depends on a myriad of factors, including your age, medical history, country of coverage, national resources and In many cases, a country’s level of industrialization. However, international healthcare and insurance may be less expensive than US domestic insurance and healthcare.

An International Health Insurance policy will typically calculate premiums based on a policyholder’s age, current medical history, and area of coverage, rather than on their claims history. Currently these plans usually offer one of two areas of coverage: Worldwide; or Worldwide excluding the USA (other countries may be excluded as well). The reason for this is that medical care in the USA is the most expensive in the world, but most international insurance companies (e.g., AXA PPP International, Now Health International, BUPA, Cigna, Clements Worldwide and Expatriate Healthcare) will rank countries by medical costs and have premiums adjusted accordingly.

The majority of international health insurance plans for expatriates are, however, globally portable. Although this allows foreign nationals overseas to move fluidly from one country to the next without periods of no cover, but this may also make the premiums go high at a fast click. Another gap that people may discover is that for the most part, however, an international health insurance policy will not cover an individual when they have returned to their home nation (“home country coverage”), making the investment practical only if the policyholder is planning to be overseas for an extended period of time. Very few policies cover treatments in a person’s home country often for a limited period of time.

Yes people may rely on travel medical policies if they are traveling abroad for shorter periods of time, which can provide assistance during emergency medical situations abroad. These policies are less expensive as they are time specific rather than annual policies. A majority of international travel insurance policies will also allow the policyholder to be evacuated to the nearest center of medical excellence in the event of a serious illness or injury; it is also possible to obtain repatriation coverage.

To think of it, most of the expatriates barring a few really heavy traveling personnel, base their families in one foreign country even if they themselves have to travel due to job requirements, and most of the expatriates are stationed in their work country for most of the time and then return to their home country when they choose to return or in any untoward eventuality.

Doesn’t that create a need or opportunity to create dual country insurance products, one being the work country and other being the Home country. It may present following benefits

  1. It will drastically reduce the burden from the high premiums
  2. May reduce the risk factors of the individuals which can be exposed by giving a comprehensive worldwide coverage
  3. Within a reasonable price they could be offered more comprehensive cover
  4. Create the insurance inclusion of large amount of foreign low wage workers to come in the umbrella of expatriate insurance cover

Another important and often overlooked element of international health insurance policies is the underwriting criteria used by the insurance provider. Policies are underwritten in one of two ways: moratorium; and full medical underwriting. With moratorium underwriting, applicants are not required to disclose any medical declarations, and so some pre-existing conditions may be covered; although, there are restrictions to the coverage of pre-existing conditions. New or unexpected conditions occurring after the start date are covered according to policy conditions. Full medical underwriting requires the collection of a full medical history, and usually excludes coverage of pre-existing conditions.

It is also important to review the policy benefits (what is covered) and exclusions (what is not covered) prior to purchase. One should be able to obtain a “certificate of coverage” which will provide comprehensive details prior to the policy purchase. Often, some benefits are limited either by the amount of coverage provided for certain treatments or for a period of time. For example, maternity benefits are typically excluded for the first 12 months of coverage. Benefits may also be limited or excluded for travel to certain countries.

What stops people from creating a mutual insurance groups and create an alternate insurance solutions just like mutual funds so that the premiums could be driven down. I understand that would already be done by reinsurers in certain market conditions, but why not democratize it. Coverage should be a right for people, and they should get it at a price that’s affordable to most.

Our responsibility is not just to educate people about insurance but to look beyond. Let us make insurance an engaging topic than a chore.

The blog was first published on FinExtra by the same author.

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