Wednesday, February 28, 2018
Is Travel and Health Insurance Really Worth it?
When it comes to medical bills it is important to know where you stand. We have all heard the horror stories of someone getting sick abroad and having to use half rate hospitals at insane prices. When you are from Canada it can be easy to assume everyone has the same level of health care we do. That is definitely not the case. Even our lovely neighbors to the south have far less coverage than we are accustomed to unless of course you are insured. Weighing the cost versus the possible benefits is not so cut and dry. The same is true when it comes to personal health insurance coverage. Is what we spend every year on our medical bills enough to justify the cost of buying personal health insurance? A cost analysis will have to take place to find this answer. In today’s post, I will show reasons why you shouldn’t get travel or health insurance and why you should. Knowing why you shouldn’t, will tell you exactly the reasons why the majority of us should purchase these types of coverage.
Travel Medical Insurance
It is ingrained in us that when we go on a trip, we need personal medical coverage. We don’t want to be stranded in some hospital in the Dominican with a $5,000 bill attached to our bed. Having the coverage gives us peace of mind that we can enjoy our trip without worrying about the what if’s. The real question for travelers is: Do we really need travel medical insurance? First, let’s look into what it actually covers.
1) Emergency Medical Care:
Includes physician services, ambulance services, semi-private hospital accommodation, diagnostic tests, treatment by registered specialists/therapists such as chiropractors and physiotherapists, and more. May cover the cost of bringing someone to your bedside and/or transporting you home.
2) Trip Cancelation and Interruption
Receive reimbursement, up to a certain amount, of the cost of the trip should it be canceled or interrupted.
3) Baggage loss, damage or delay
Receive a benefit should your luggage get lost, damaged or delayed during your trip. This benefit has a cap as well.
4) Flight and travel accidents or death
Coverage should you have an accident during your flight or trip including dismemberment or loss of life. Similar to personal accidental death and dismemberment coverage.
These are all valuable forms of coverage, but only if you need them. Here are my reasons to not get coverage.
1) You are already covered
You may be already covered through work. Some group plans have health or medical coverage that goes along with you, should you leave the country. You might also have coverage through your bank or credit card company. Sometimes your credit card will provide you with added benefits including travel coverage. It is important to understand what these groups offer. Remember you are paying for them, so why not take advantage if you can.
2) You only want the life coverage
If you are only worried about the scenario of you dying while on your flight or during your trip, you are better off getting personal life insurance coverage. It is important to remember that you are more likely to die walking across the street or in your car than you are while vacationing. Like the above point, you might already be covered through work for life insurance and if you already have personal life insurance, it is definitely not needed.
3) You only want the medical coverage
Medical travel insurance can be very cheap. There is usually a deductible so be prepared for that. The higher the deductible the cheaper your coverage will be. If you do not care about lost luggage or trip cancelation, opt for the stand-alone medical coverage and you will be fine. Unless you are covered through somewhere else, I believe this form of insurance is crucial and should be purchased by everyone.
It may be annoying but understanding what type of coverage you already have and what you think you will need could save you time and money. Take the steps to make sure you have the right coverage in place, so you aren’t trapped in a tough spot in an unfamiliar place.
5 Reasons You Should Not Buy Travel Insurance – Money and Career Cheat Sheet
Personal Health Insurance
When you are part of a group plan it is important to understand exactly what they cover. The problem with most group plans is that they are full of confusing insurance jargon and the average person has no clue what they say. When you have a plan that pays all your costs, it is pretty sweet. Not much thought has to be put on your medical expenses. The issue is what happens when you leave that plan? It is important, like with travel insurance, to analyze what you will actually need every month/year before you make the decision to buy personal health care coverage. It can cover things such as:
1) Prescription Medical
2) Dental
3) Optometry
4) Registered Therapists
5) Orthotics
6) Emergency Medical Costs
The question then becomes: What do I actually need when it comes to these services? This is where a cost analysis comes into play. Here are some reasons why not to buy personal medical coverage.
1) You already have some form of coverage
Any form of coverage that is free, or close to free, is better than something you must pay for. That point is fairly obvious, but it is important to know what exactly you are covered for with your workplace plan. Each plan is completely different, and many have customizable options. You can often choose exactly which parts of the plan you want most. Understand that most of the time, adding extra coverage comes at a cost. It could be more productive to get your own personal plan or even pay out of pocket depending on the situation you are in.
2) Your medical costs are low
If you are young and don’t use that much benefits during the year, you might be better off paying out of pocket for certain costs. For example, if your only medical cost is going to the dentist once a year for a cleaning, do you really need to buy a personal health insurance plan? The same is true if you only have very small optometry or prescription costs. Calculating how much you use versus what you will pay for a personal plan is crucial to know whether it is worth it.
3) The deductible is too high
Some plans make you pay so much out of pocket that it makes no sense to have the plan at all. If you have a plan that charges you a monthly fee, but then only offers you a certain amount of coverage that is inadequate to your monthly costs, you must evaluate its usefulness. Sometimes the sole purpose of the plan is for prescription medication costs. You must find a plan that is geared towards that area, so you can keep costs down, otherwise, it is not worth it.
I’m Not Cheap……I’m Frugal!!! – Budget Boss
Whether it is travel insurance or personal health benefits, it is important to understand what you spend money on every month. That is where budget analysis comes into play. Often shady salesmen will sell you on the benefits of a package without understanding what your personal situation is. It is important for you to understand that and weigh the pros and cons of any insurance coverage. Take your time and do a little research and you will come out on top.
Thank you for tuning in today as Insurance Week continues at Budget Boss. Join us tomorrow as we discuss Term versus Whole Life Insurance. If you would like to do a personal insurance analysis, please do not hesitate to contact me at joe@budgetboss.ca. Have a great day Bosses!
“How often I found where I should be going only by setting out for somewhere else.” – R. Buckminster Fuller
Email – joe@budgetboss.ca
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