Within a day of arriving on the lush island of Kauai, several years ago, I was suddenly felled by intense nausea and abdominal pain, which worsened to the point where I told my wife, "It's time to see a doctor." And so, after notifying my credit card's travel insurer, I spent a night in the Lihue hospital where I went through a battery of tests and spent a sleepless night. The next morning, I was discharged, relieved it was no more than a case of gastroenteritis.
Six weeks later, back at home, we received a copy of the US$3,000 bill, which was stamped, "Paid." Only a portion was covered by Ontario's health-insurance plan and the majority by our credit card. "Thank goodness for travel medical insurance," we said in unison.
While we've always taken precautions when travelling outside of the country, it's astonishing that many Canadians don't. To their peril, they learn that provincial health plans will cover only a small amount of out-of-country costs. "There are still some people who don't purchase insurance," says Isabelle Forget, head of travel for North America at RBC Insurance, a unit of RBC Financial Group. "It always strikes me when people leave the country uninsured because of the risk they are taking that something might happen."
According to a recent RBC survey, 23% of Canadians had no out-of-country medical insurance on their last trip, either through a credit-card program or employee health benefit. "That's almost one out of four, which is quite an alarming number," says Forget. "These people could be in for a nasty surprise. Oftentimes we take it for granted, living in Canada where we have provincial health-insurance plans. But as soon as you cross the border, it could be financially devastating."
And those risks are higher for those over the age of 65. "Some of the most common claims are for heart attack, stroke, fractured hips, pneumonia, renal failure -- anything you'd expect in a population over 65, we'd see claims for those," says Julie Barker-Merz, vice-president and chief operating officer at BMO Insurance, a unit of BMO Financial Group. "People underestimate the costs. A broken leg could cost you $20,000, a heart attack up to $70,000, and a fractured hip up to $120,000 -- which covers everything from your hospital stay to private nursing care and medical procedures." In some cases, there could also be air-ambulance costs of $50,000, or more, to fly you home for further medical attention.
"These costs are quite substantial, compared to the few hundred dollars in travel insurance," says Barker-Merz. "It's really worth getting if anything should happen."
While some people may have employee group plans, they may not be aware that only a portion of any costs is covered. "There is a real lack of education. People underestimate the costs. Or they think they're covered," says Barker-Merz, adding that a recent BMO survey showed that about 50% of Canadians do not appreciate they will have to pay out-of-country costs. "We tell Canadians, 'Find out what you're covered for. Get clear on that. And top up where you need to.'"
Insurance premiums vary in cost, benefits, deductibles and the frequency of travel. You have to weigh the duration and frequency of your travelling to determine which plan is right for you. But one thing common to all insurers is the requirement for full disclosure, especially when it comes to pre-existing medical conditions.
At BMO, coverage for a single 10-day trip is $196.31, based on a 67-year-old who disclosed in a questionnaire that he or she is diabetic and taking prescribed medications. A person who is 76, and suffered a heart attack five years ago, will pay $401.63 for a 10-day trip. Plans can be bought through BMO branches or its MasterCard program.
But it is more economic if you buy an annual plan that will cover you for several trips. A 67-year-old individual with the above health condition who takes several 10-day trips will pay $200.94 a year. If he or she wants to travel for 21-day trips, the top-up costs $249.76, for a total of $450.70 a year. Annual plans are available up to age 74. A 10-day multi-trip plan costs $259.72 per year. It would cost $598.46 a year to obtain additional 11-day top-ups for 21-day trips.
At TD, pricing is based on age bands. For instance, a single person between ages 65 and 69 would pay $48 for a seven-day trip. It costs $76 a week for a couple. Between ages 70 and 74, it costs $70 a week for an individual and $119 for a couple. "Across the insurance marketplace, generally speaking, there is an incremental increase in risk when you move from one age bracket to another," says Dave Minor, vice-president at TD Insurance, a unit of TD Bank Financial Group.
Annual packages, which include trip interruption and cancellation benefits, require that you answer a medical questionnaire and reveal any existing conditions. An individual between ages 65 and 69 can buy an annual plan for $221, which covers multiple 17-day trips. The cost for a couple is $416. A single person, between 70 and 74, would pay $309 for an annual plan with multiple 17-day trips. It costs $592 for a couple between ages 70 and 74. You can top up the annual plan, to cover trips up to 28 days, but you have to contact TD and answer its questionnaire. Plans are available through the TD branch network or its VISA program.
Unlike its competitors, RBC offers deductibles that can bring the cost down. For instance, a person between ages 65 and 69 will pay $142 for up to 30 days of travel for the TravelCare Gold package, which carries a $500 deductible. To qualify, he or she must answer "No" to most questions in the medical questionnaire.
The TravelCare Silver package, with the same $500 deductible, costs $390. The cost is higher because there are more restrictive pre-existing medical exclusions, and the individual answered "Yes" to many of the questions in the questionnaire. The cost of an annual Travel HealthProtector plan, which covers you for unlimited trips of up to 30 days, is $460 for a person between ages 65 and 69, or $920 for a couple. At RBC, plans are available through the branch network or VISA credit-card program.
Coverage varies from product to product, which can make shopping a confusing exercise. "Exclusions and limitations differ among competitors," says BMO's Barker-Merz, adding that some policies exclude, for example, risky activity such as mountain-climbing and bungee-jumping. "That's why it's important to understand the exclusions and buy the coverage that you need," says Barker-Merz, who admits that last year BMO rejected 12% of the medical claims mainly because the claimants didn't answer the medical questionnaire properly. The other two institutions declined to disclose their rejection rates.
While cost plays a factor in choosing an insurer, it's not the key consideration. "Understand where the network, or underwriter, operates. Who's going to be there on the hotline, when you call with a medical emergency?" says Barker-Merz, noting that her firm's underwriter is global insurer Allianz AG. "If the company is not widely dispersed around the world, it may not be able to help you with the proper care. Remember why you're buying the product. It's not just about cost."
RBC's Forget agrees that price should not be the overriding factor. "Choose the coverage that is appropriate to your needs. Also understand what type of after-sales service is available, and the professionals you may need if something should happen to you. All of these factors should be part of your decision-making," says Forget.
Echoing BMO's Barker-Merz, Forget adds: "There are still a number of people who don't purchase insurance. So making sure you do purchase it is paramount. The cost is small, compared to being admitted to a Florida hospital for two days and paying $30,000 for a broken leg. The choice is obvious."
