Individual Private Medical Insurance versus Travel Medical Insurance
The debate about what's best – Private Medical Insurance or Long Term Travel Insurance – is an ongoing discussion since people decided to live abroad and nowadays the topic is important more than ever. Our globalized world is not only motivating everyone, especially young people to work abroad, but also makes it much easier these days.
One of the most important questions when deciding to live abroad is medical insurance. Even though this question usually does not concern those who are send to work abroad by their company. Nevertheless, there are millions of people living abroad, who have to take care of their insurance needs by themselves.
This can be the young high school grad who would like to go for a one year work & travel adventure; or it can be the digital nomad who quit her / his job to be able to work remote and independently from a nice island in South-east Asia; but it also can be the family woman / man who did not get an Expat contract but a new local contract without insurance, while living abroad in China or wherever.
Medical insurances are products to cover the financial risk of paying the physician, clinic or hospital when falling ill, receiving treatment after an accident, or any other circumstances where medical assistance is needed. Now, a travel insurance can take care of the same needs and is much cheaper. Why buying a private medical insurance then?
The basic idea of a travel insurance is to provide coverage while outside of your area of coverage through your medical insurance back home or country of residence. In case something happens while travelling – you will be covered and are able to access medical assistance without having to worry about additional costs. This concept is the same for short and long term travel insurances. But what happens after you have been treated and travel back home or your travel insurance is running out, or worse you are repatriated for better treatment to your home base, after you are stable enough for travelling, but you are not fully recovered (if that's even covered)? Ideally you are still covered in your home country or country of residence and you don't need to worry about further treatments in case of any ongoing or existing conditions.
Unfortunately, most cases are not ideal. Even if a travel insurance does not cost as much, most people won't (be able to) afford another medical insurance back home just for the unlikely event it is needed. Long term medical travel insurances costs are approx. USD $30 - $150 a month with coverage for Inpatient and Outpatient and more; depending on the provider, benefits and age. A proper medical insurance on the other hand starts from at least $100 per month for just Inpatient coverage and depends also on age, area of coverage and benefits, which vary from provider to provider, but can add up even to $1,000 or more a month for just one person. Therefore, if you are planing to live or already are abroad long term and you are just covered through a travel insurance then 3 main scenarios are possible.
First, apart of a cold nothing serious happens to you, which means you saved a lot of money by taking out a travel insurance instead of a proper medical insurance. But this is more like a gamble against time, rather than a rational long term investment decision into your health and life. Even if you put aside the monthly saved amount of let's say $100, how much you think you are able to save over 30 years? That amount will hardly cover your medical bills if something serious happens and long term medical treatments are needed, which you can get through a real medical insurance.
Second, you may had an injury and needed surgery. Your insurance pays for it and all is good now, but your insurance is up for renewal on some point. No travel insurance provider in the world will renew your contract at this point, neither will you be able to find another travel insurance which will cover your existing condition. If applying for a real medical insurance at this point most companies will exclude the existing condition as well or charge an impertinent high surcharge in order to cover it.
Last but not least, you may fall ill with a serious condition such as diabetes, cancer, or whatsoever which leads to a chronic condition and need to be treated permanently. At this point you will definitely not be able to renew your contract, neither will you be able to obtain any medical insurance which provide coverage for the condition.
Of course, there are countries like USA or Germany where insurance providers have to provide coverage in some way, even with pre-existing conditions, but at what price? Not only will you face a huge premium surcharge once you find a provider, but also you will not be able to receive reimbursement for the treatment you need while in the process of finding a health insurance. In the meantime, you will have to pay a huge some out of your own pocket for all the necessary treatments, if you are actually able to.
A big concern is that the people who have purchased a travel insurance in the first place are usually the people who can afford less and therefore won't be able to pay for necessary treatments by themselves. Therefore, everyone should speak about the Pros and Cons with an independent insurance consultant before making any decision on what's best in each individual situation.
Perhaps, instead of buying a travel insurance for $50 per month, it is worth considering to buy a private health insurance for $100 per month instead .... usually with less coverage short term, but much better protection and value long term.