You think to yourself, there is no way I would ever cancel this trip. EVER. So why buy travel insurance?
Because it is not just about you. And it is not just about canceling your trip. There are many more components to travel insurance, so I wanted to take the next few weeks to discuss the four main reasons you need travel insurance and some real-life examples of how travel insurance helps in each.
- Emergency Medical & Medical Evacuation Coverage
- Trip Cancellation & Interruption Coverage
- Supplier Default Coverage
- Baggage Delay, Loss, or Theft
We will start this week with what I consider the absolute number one reason to buy third-party travel insurance, Medical and Evacuation Coverage.
Travel Insurance is not a scam. To be honest, I used to feel this way. Surely, if something horrible happened to me, suppliers would be understanding and allow me to reschedule. I have learned that this is absolutely not the case. I will give examples that I know of first hand and will end each article with anecdotes from travel advisors that I work with directly.
Please keep in mind that I am referring to third party travel insurance in these examples, which is much more comprehensive than through a travel supplier. Do not buy the trip insurance offered when buying an airline ticket or vacation package. Contact me for help, even if you do not purchase your trip from me.
Why do I need travel insurance for medical coverage if I have health insurance?
You would need to call your health insurance company to determine what kind of coverage, if any, you have when traveling internationally. Some policies provide no coverage internationally. Many policies do not cover you overseas unless it is an emergency, which is defined by the insurance company. There is a distinct difference between emergency care and urgent care.
Before recently buying an annual travel insurance plan for my family, I wanted to understand our international coverage through our health insurance. I would consider our plan to be a good plan through my husband’s job. When we called, we were informed that only a true emergency would be covered. The example given to us on the phone was that if one of our children was sick enough to take to emergency services, but that the illness turned out to be something manageable like food poisoning, the bills would not be covered. If you are not a trained doctor, you are not able to decide whether an illness is severe, so you err on the side of caution.
If an illness was serious enough to be considered an emergency, you would be covered, but there is an important consideration. Even if your insurance does cover the emergency visit, once someone is stabilized and in need for transport back to the USA, the services are viewed as out of network. As you know, these out of network, deductibles are huge.
Why do I need travel insurance for medical coverage if I have Medicare?
Most Medicare policies do not cover services outside the USA. There is an exception though. A Medicare Medigap policy does cover medical emergencies outside of the USA, but there is a lifetime limit of $50,000. Some Medicare Advantage plans also cover international medical care, so check with your insurance agent for more details. Even if your Medicare Advantage plan does cover international medicare care, some of these plans have a maximum for overseas travel benefits and will most likely you will be required to pay upfront and be reimbursed by your policy. It is also important to note that neither Medigap or Medicare Advantage covers medical evacuations.
Does my health insurance cover medical evacuations while traveling?
Nope! Most travel insurance policies provide this and include up to one million dollars in emergency medical evacuation. To be fair, some travel credit cards include this type of coverage but caps the benefit at $100,000. $100,000 sounds like a lot, but these flights can cost much more than this depending on how far the flight is. Another caveat of the credit card coverage is that it must be pre-approved by the Benefit Administrator in consultation with a legally licensed physician outside of the USA.
Why do I need travel insurance for medical coverage if I have a travel insurance policy through my credit card?
Most credit cards with travel perks include some sort of travel insurance. Most coverage is for trip cancellation and interruption. It is decent coverage that I will explain in the future trip cancellation and interruption article, but it definitely has its limitations. Most travel credit cards do not provide any medical coverage, although some pay as much as $2,500 per person. As we all know, this is not enough to cover you if something serious happened to you or a traveling companion.
Another thing to consider is that credit card medical insurance is supplemental. This means that they pay after your health insurance plan which may or may not cover your out of network expenses and will only do so after your annual deductible is satisfied. Instead of trying to figure all of this out, you could quickly have been covered under third party emergency medical coverage for a relatively small cost.
Does travel insurance cover pre-existing conditions?
Yes, it does, but you have to follow the rules. The policy has to be purchased within 14-21 days of the initial deposit for the trip, depending on the insurance company and as long as the client can travel at the time of purchase. You can not purchase a trip and insurance while in the hospital recovering from surgery if you would not be able to travel that very day. Pre-existing conditions are also covered in the cancellation coverage if purchased within 14-21 days of initial deposit which we will discuss later.
What is Primary versus Secondary Travel Protection?
I only sell primary travel protection. This means that the claims are submitted to the travel insurance company and paid directly to you for reimbursement of eligible expenses. Compare that to secondary travel protection which requires you to submit to your primary provider, wait for eligible costs to be reimbursed, submit to your supplemental provider, and then wait for those remaining eligible costs to be reimbursed.
This travel insurance benefit is actually the reason why buying travel insurance for a domestic trip is also a good idea. In an effort to reduce costs, many people use high deductible policies. These deductibles are even higher for out of network expenses. Knowing that your medical expenses are covered out of network is a big deal.
Do foreign hospitals refuse treatment until the bill can be guaranteed?
Absolutely. Your travel insurance will step right in and guarantee that bill, but that is not the case with many other types of service. Many foreign hospitals will insist on prepayment before they will begin life-saving procedures. Do not get caught in this situation. It is worth 4-8% of your trip cost to protect yourself and your loved ones.
Some countries will hold patients “hostage” until they can pay their medical bills, although I would hope the American embassy would be able to help out in this situation. I have never heard of this happening to an American citizen, but I suppose anything is possible.
What about additional costs incurred because of a medical emergency?
Emergency medical coverage does not end with your medical expenses. If your family needs to stay at a hotel near the hotel, that is covered. If the doctor orders you to stay a few extra days in a hotel to recover after the hospital, that is covered also. Also covered is an upgrade to a first-class seat so that you can lay down on the way home if the doctor orders this. This happened to my sister’s coworker recently. After staying in the hospital for several days, her daughter was released but required to lay horizontal as much as possible during her Transatlantic flight home from London. Travel insurance will even pay for a travel nurse to accompany you home if necessary. Wow. You will also be reimbursed for any parts of your trip that you and your travel companions were forced to miss as a result of your medical emergency.
What really sets third party insurance apart is how they handle medical emergencies. The preferred third-party travel insurance vendors that my host agency works with have been vetted. They step in and take care of everything including guaranteeing medical bills. Let that sink in. I have read countless stories of hospitals insisting that they pay upfront for medical care before beginning life saving or pain reducing measures. Please read the examples below from the people I work with. These are not random stories on the internet. Third party travel insurance makes this process as easy on the client as possible so that you can concentrate on your loved one instead of figuring out how to wire money to the hospital.
Examples of Medical Coverage Saving The Day From Other Travel Advisors
- The client had a medical emergency while on an excursion. The client was rushed to the hospital for surgery. Her husband booked into a hotel near the hospital so visiting was easy. The client and husband flew home in first-class so surgical wounds would not be compromised.
- A woman whose husband had a heart attack while visiting Mexico was required by the hospital to pay $25,000 upfront for medical care. The woman called every one of her credit card companies and her bank begging for assistance – all of which denied her any help. Finally, she had to call her employer and ask for an advance on her salary. They stepped in and guaranteed the bill. Who wants to go through this?
- The client fell and broke a hip on the first night of the cruise. She had to leave the cruise and receive medical coverage outside of the US.
- A client fell and broke kneecap on the fourth day of an escorted tour.
- A young couple visiting Cancun rented a scooter to sightsee. They were in an accident and the man broke his arm so severely that it would need surgery. When they got to the hospital they told him that they needed $25,000 to pay for the treatment and no one would see him until they could prove they had those funds in hand. They did not have that much money available on credit cards, so they had to call friends and ask them to wire them money. Meanwhile, the husband is on a stretcher in a hallway in lots of pain but they would not give him any pain medications until they secured the funds. That took about 4 hours.
- A client slept walked off a 13-foot balcony in Punta Cana. She was airlifted to Houston and the out of pocket costs were $50,000. They did not have travel insurance.
- A fellow travel advisor was visiting Uganda with her husband and three young children. The husband’s appendix decided to rupture during this trip and he had to have surgery. Unfortunately, there were complications which meant their 10 day trip turned into a five week stay. Not only was every last one of the costs associated with this medical emergency covered, but they almost had to take a medical evacuation to South Africa, which would also have been covered.