Travel Insurance – Are You Really Covered?

With the months turning colder, many Canadians start planning their trips south to sunnier destinations.  One very important item to keep in mind, when planning these trips, is the cost of health care if an emergency should arise while you are away. This is something many Canadians may overlook as we are used to having universal health care at home.

Most people address the risk of emergency medical expenses while on vacation by purchasing travel medical insurance, relying on group coverage, or relying on travel medical insurance included with their credit card benefits. Media reports, about people who thought they had insurance but were not covered, has many people wondering whether their policies will pay if something happens.

First let’s look at two well-publicized stories.  An Alberta couple were told to pay a $114,000 hospital bill resulting from illnesses that were not related to any pre-existing conditions. Their insurance company declined to pay because they had not disclosed all their medications on the application.  The second is the now famous “million dollar baby”.  A couple were vacationing in Hawaii when the wife went into labour at only 6 months. The costs of delivery and the subsequent stay was $918,000 and this was not covered by their insurance.

These are very scary stories which could certainly make it difficult to relax on the beach.  So how can you make sure this doesn’t happen to you and is it even worth buying insurance? To answer these questions let’s take a look at these situations and what could have been done differently.

In the first story the lady applying for insurance answered no when asked if she had, “taken and/or been prescribed six or more prescription medications” in the last four months.  She was taking 4 medications but had also been given prescriptions for 5 other medications which she never had filled.  While this could be an honest mistake, if she had answered yes the company would have declined the insurance, therefore they are allowed to void the policy and refund her premiums.  In this situation, obviously the question needed to be answered correctly. However, mistakes happen: That is why it is a good idea to deal with a licensed insurance advisor when purchasing any type of insurance, including emergency travel medical.  An experienced advisor can ask the right questions, clarify some of the more confusing questions, and address any issues you are concerned about.  It is also a good idea to review the application before leaving to make sure there are no innocent mistakes which could end up being very costly.

The second story is actually based on the most common exception in all travel emergency medical plans.  A pre-existing exclusion applies to medical conditions and/or symptoms that existed prior to your trip.  How this is applied differs from policy to policy, so it is important to ask your advisor and even read the exclusion section of the policy certificate.  Generally there is a required stability period of 90 days or more for any illness you had prior to departure.  The definition of stability can also vary so again it is important to understand the details of your particular insurance: It usually states something similar to, “no changes in symptoms or treatment for that period of time.”  A pregnancy is constantly changing and is almost impossible to meet the stability period.  Some plans will cover out of country, premature delivery but most have very specific requirements for doing so. It’s imperative to speak to an advisor and get the requirements in writing before you leave. 

These explanations should help you understand what went wrong for these two unfortunate couples. Now, here are some tips to help you enjoy your vacation, knowing you are covered if something unexpected occurs.

1. Deal with a licensed insurance advisor who has the knowledge and expertise to guide you to the right product and help you answer the questions correctly.

2. Provide full honest disclosure.  Not doing so could result in a claim being denied.  Some of the questions can, at times, be confusing so be sure to read them fully and ask for clarification if you are not 100% clear.

3. Read your certificate of insurance; particularly the exclusions and limitations.  What is the definition of stability period and pre-existing condition?

4. Know when the coverage becomes effective and for how long.  Is it for specific dates, a specific number of days, or do you have to have a certain percentage of your trip paid by your card for the travel insurance to take effect?

5. Have the global assistance number available.  Almost all plans require that you notify the insurance company within a set period of time if receiving medical treatment and failure to do so could limit the amount of coverage you have.

Langlois Financial Services can help align you with the correct Travel Emergency Medical Insurance. We will help you choose a plan based on your needs and medical history so you can travel with peace of mind.