September to January is a busy period for international travel: students join their overseas colleges often accompanied by parents; grandparents visit their children in the winter break; and the well-heeled set out on vacation. Most international travellers buy overseas travel insurance because the cost of medical treatment abroad is prohibitive. Cardiac surgery in the US will cost about $100,000, for example. The Schengen countries insist on insurance as a pre-condition for their visa.
In the past few months I have received several claim intimations from international travellers. Unfortunately, all those claims have been rejected, for the right reasons. This set me thinking that most buyers do not fully understand their travel insurance. These are the questions I get asked most often.
Will I be insured for an existing health condition? Most insurers do not cover hospitalisation related to existing health issues. For example, if you suffer from hypertension, cardiac claims are unlikely to be paid. A few insurers now provide limited cover for emergency treatment, even if related to existing conditions. The sum insured is restricted to about $10,000 in such cases.
However, you must declare the existing ailment when you buy the insurance. Non-disclosure is the single largest reason for rejecting claims. Claims will be rejected even if they are not related to the un-disclosed disease.
If I fall ill, will the payment be cashless? If hospitalised, the process can be cashless which means that the hospital will be paid directly by the insurer. Inform the insurer the moment you can so they can initiate the process. Insurers have international assistance partners that manage these claims. If there is a doubt about the claim’s acceptability, for example a pre-existing condition that was not disclosed, then the insurer will have you go for reimbursement where you pay the bill and claim later. Outpatient claims are also covered by travel insurance and are mostly reimbursed after adjusting for a deductible of about $ 100.
Can a senior citizen buy overseas travel insurance? Seniors are a significant proportion of overseas travellers but have the hardest time buying travel insurance. Up until the age 70, travel insurance can be easily bought. Between 70 and 80, the number of options shrink but it is still possible to buy. After that most insurers will turn you down. Some insurers can sell even after 80 but need internal underwriting approvals and will have you undergo medical tests. As you grow older, insurers reduce the maximum sum insured that you can buy. For most countries, with the notable exception of the US, the reduced sum insured is sufficient. If a senior finds it difficult to buy insurance locally, they also have the option of purchasing this in the country they visit. That is relatively expensive though.
Is it better to buy travel insurance in India or overseas? Travel insurance bought here is more economical and just as effective as international travel insurance. A 50-year-old travelling to the US for a fortnight will pay about ₹3,500 for a cover of $0.5 million. This will cost twice as much if bought overseas. It is also easier to follow up with insurers locally. Overseas insurance is better when you have serious pre-existing conditions that are not insurable in India.
Can I get paid if my flight is delayed or cancelled? Insurers pay these claims if delays are caused by specific, pre-identified reasons. These could range from acts of god such as earthquakes, floods and inclement weather to fires, strikes and equipment failure. Delays or cancellations for other reasons will not be paid.
What if my baggage is lost or delayed? If your entire bag is lost you will be paid a specified amount. This will not cover jewellery. If just a few items from your bag are missing that will not be paid for. In cases of delay, you will be reimbursed the cost of personal effects to manage until your bag arrives.
Can I buy insurance after leaving the country? The insurance must be bought while in India. This prevents people from buying insurance when they know they have to visit a hospital. Insurers will make an exception if you have a credible reason but it will take a lot of follow-up.
To summarise, you must buy travel insurance when going overseas. Its main benefit kicks in if you meet with an accident or suffer a medical emergency. The insurance is less useful for routine health issues or travel-related inconveniences.