Why It Helps to Read Your Travel Insurance Policy
Many of us read our travel insurance policies. The question is: how much do we really understand?
There is a world of difference between just reading and truly understanding a travel insurance policy. If you read the paragraph below (taken from an authentic travel insurance policy offered by cruise liners and travel agencies), you would realize that it is a rather common clause. It's also fairly easy to understand and many read it nonchalantly because they are under the impression that reading travel insurance policies is part of their duty. However, that clause is horrendous. Word to the wise? Read it twice.
Medical Expense and Emergency Assistance Benefits
We will pay this benefit, up to the amount on the Schedule for the following Covered Expenses incurred by you, subject to the following: 1) Covered Expenses will only be payable at the Usual and Customary level of payment; 2) benefits will be payable only for Covered Expenses resulting from a Sickness that first manifests itself or an Injury that occurs while on a Covered Cruise.
Well, not that this is a cause for concern, but the first item does seem ambiguous. Who gets to decide who pays the “Usual and Customary” level of payment? Where should payment be made? Payment location is likewise subject to contention. Moreover, how is this customary level of payment any different from paying one's bills? Or does the insurance company adopt a different mode of payment? There's one insurance company that controlled the ebb and flow of U.S. Medicare, paying only 75 percent of the hospital fees, which could only be around 10 to 20 percent of the actual bill received. This means the hospital has lost money on your care. Since the patient was not a citizen of that country, it would have been to the insurer's advantage had hospital bureaucracy caused collections to be ignored. The hospital would then hound the patient to pay the rest of the bill in a bid to offset losses.
A different company would inform the hospital through a letter that they would pay the Medicare fee in full. This comes with a fax requesting for a signature to enable them to authorize payment of the hospital bill. A billing clerk or an admittance staff, thinking that this was part of the usual procedure, would affix their signature and fax the note back. Hardly any U.S. hospital would be fine with this amount. That clerk who signed the faxed note would face certain consequences. Normally, U.S. hospital bills for non-citizens far exceed the value of the typical Medicare rate. Unfortunately, many Canadian travel insurance companies employ this tactic, causing a lot of misunderstandings.
Even more disastrous is the second item in the clause above, which states that benefits will be paid for a “Sickness that first manifests itself” while travelling. Although this sounds reassuring and simple, many of us would think our expenses will be covered should we get sick on the trip. What this clause really means is that if you had any sort of ailment long before you hopped on the plane, you are not covered. The sickness, as well as the treatment for the medical condition, had already manifested itself. Ergo, no coverage. Let us enumerate the things you wouldn't be covered for:
- Any pre-existing medical condition or anything related to that condition
- If you are taking some prescribed drug (or anything related to that condition)
- Visits to the doctor
- Any kind of symptom (even if you did not consult a doctor)
- Because these conditions first manifested before your trip, you will not be covered for any of them.
A gentleman recently sent a rather upfront letter. He had so many intertwined medical conditions that it was difficult to provide full coverage. According to him, he had cruised twice and journeyed to Mexico, fully insured by a provider cheaper than Medipac Travel Insurance. Luckily, he had no claim. He wouldn't have been covered for any of those trips given his condition.
What is the point of such clauses? They are very distressing. Are they meant to deceive clients into buying these types of travel insurance policies? It is beyond my understanding. The insurance industry should make a stand and declare these clauses as wrong and misleading for the benefit of future customers. Is it just for them to continue collecting money on policies that seldom provide clients easy access to health emergency care? All they have to do is print a warning on the front page of the application and plainly tell clients what should or should not be covered.
One last thing to take note of. Isn't this line “up to the amount on the Schedule” misleading? What makes it misleading is that obviously it's not telling you the whole truth. Should not the person in charge of designing and writing a travel insurance policy be kind enough to disclose the amount of any benefits on the aforementioned clause or on the first page of the application and policy, where clients can immediately see them. There is no need to use the ambiguous word “Schedule” and confuse people.
Never forget to take the right travel medical insurance policy with you whenever you travel via plane or cruise ship. Make sure you have read and understood what's written there. Don't buy travel insurance unless it covers at least $1 million worth of medical expenses. Having doubts about the policy? Call the toll-free number and let them know about your health situation and the types of medication you take. Ask if they provide coverage for a medical emergency. If the answer is in the affirmative, then request that they put everything – including your conditions, the medicines you take and other applicable conditions – into writing. Now you can cruise all you want and enjoy your vacation.