Snowbirds can face devastating financial consequences without the right travel medical insurance coverage. Stephen Fine and Michael Camacho walk us through the issues.
Some of your clients have no doubt left Canada and temporarily relocated to warmer destinations until spring arrives. But while these fortunate snowbirds are enjoying the warm weather in places like Florida, Arizona, California, Mexico, and beyond, many of them may have inadequate travel medical insurance coverage.
Unfortunately, myths and misinformation about travel medical insurance are far too common, which is why edu- cating your snowbird clients is vital to protecting both their phys- ical and financial well-being. Let’s examine the most important issues snowbirds need to consider when it comes to emergency travel medical insurance coverage, and how to successfully navigatethose issues.
SINGLE VERSUS MULTI-TRIP ANNUAL PLANS When it comes to travel medical insurance, snowbirds generally have the option to choose between single-trip and multi-trip annual plans. Single-trip plans provide emergency medical coverage for a single trip beginning on your departure date and ending on your return date. On the other hand, multi-trip annual plans provideemergency medical coverage for an unlimited number of trips over a 12-month period.However, multi-trip plans limit the number of days you can travel per trip. Limits vary depending on the provider and policy, but commonly start at 10 days and go up to 30 days or more. Once you reach your limit, you must return to your home province before travelling again for your coverage to continue.Most multi-trip annual plans allow clients to be covered for a longer period on a particular trip by purchasing “top-up” coverage for the extra time they want to spend away.It’s best to compare both options, as the right choice will depend on a traveller’s specific travel plans.
One reason why travel medical insurance claims are denied is not meeting a policy’s stability requirements. Standard travel medical insurance policies contain what is commonly referred to as a “stability clause.”These clauses require pre-existing medical conditions to be “stable” (i.e., have no changes) for a specific period of time before a policyholder travels. Stability periods vary across providers and policies but are often 90, 180, or even 365 days.If there are any changes to a pre-existing medical condition during the stability period, that condition will be excluded from coverage, meaning the policy will not cover any expenses
incurred that are related to that condition while travelling. And any changes really does mean any changes, including some your clients may not think of, such as starting or stopping medi- cations, changes in medication dosages, and having diagnostic testsfor possible medical conditions not yet diagnosed.
If your client has a standard insurance policy with a stability clause, they should ensure all pre-existing medical conditions meet the stability requirements. Alternatively, they should consider a personalized policy with no stability requirement for pre-existingmedical conditions.
Personalized travel medical insurance policies are a great cov-erage option for individuals who either don’t meet the stability requirements found in standard travel insurance policies or want the peace of mind of not having to worry about stability clauses all together.Personalized policies (unlike standard policies) base coverage eligibility, and premiums exclusively on one’s personal medical his- tory and characteristics, and provide coverage for pre-existing med- ical conditions with no stability requirement.They also don’t require clients to complete a lengthy medical questionnaire. Rather, they simply need to answer a few pre-screen- ing questions and disclose all of their past and current medical conditions at the time they apply (they may also be asked follow- up questions about each of those conditions). As long as their conditions are eligible for coverage, they’ll be covered for all pre-existing medical conditions, regardless of how long they have been stable.
In many situations, the cost of a personalized policy is the same or less than a standard policy, because personalized policies are tai- lored specifically to your client’s conditions and risks — so they won’t be grouped into a category with other travellers who may have more serious or numerous medical conditions. Of course, there are situations when a personalized policy will cost more than a standard policy, but this is usually due to certain pre-existing medical conditions being covered that would otherwise be excluded from coverage under a standard policy. Note that personalized policies aren’t offered by all insurance providers.
FULL AND ACCURATE DISCLOSURE
Failing to fully and accurately disclose medical history and other required information is the top reason for a denied travel medical insurance claim. Whether your clients are applying for a standard or personalized policy, they must always complete their insurance application truthfully and accurately. Failure to do so can be grounds for the insurance company to deny any claim made under a policy, even if the claim is unrelated to a medical condition your client failed to disclose.Be aware that it doesn’t matter if the failure to disclose is inten- tional or unintentional, which means that even an honest mistake may result in their policy being voided or their claim being denied. If your clients are unsure, advise them to speak with their doctor for assistance in completing the medical questionnaire. And if your client is tempted to intentionally provide inaccurate or incomplete information in the hopes of getting a lower premium or coverage for an ineligible medical condition, don’t let them. Once a claim is reported, the insurance company will review their medical records and become aware of the missing or inaccurate information.
Your clients’ disclosure obligations don’t stop after they purchase a policy, as their policy will require them to inform their insurer of any changes to their pre-existing medical conditions or new medical conditions that arise:
• After they have purchased their policy and prior to their departure date.
• At any time while they are in their home province during their coverage period (i.e., if they have travelled back home after departing on their trip, but their coverage period hasn’t ended)When your client informs their insurer of a change to their health after purchasing a policy it can result in one of three out- comes, depending on the change: 1. No change in premium or coverage;
2. An increase in premium; or 3. The cancellation of the policy and a refund of the premiumif the new condition is severe enough that the insurer won’t cover it.
While price is obviously an important factor when choosing a travel insurance provider, it shouldn’t be the deciding factor. Other important factors include coverage features, expertise, customer support, and track record.Buying travel insurance based on price alone can be dangerous, as any upfront savings could end up costing your client much more down the road if it doesn’t cover them when they actually need it. Ultimately, your client’s goal should not be to just find the cheapest travel insurance policy possible, it should be to find the least expensive policy that provides the coverage and assistance they need should they ever require it.
MICHAEL CAMACHO (MBA, CFP, CLU, CHFC, CHS, FLMI) and STEPHEN FINE (LL.B) are the co-founders of Snowbird Advisor Insurance Inc., a travel insurance brokerage that specializes in assisting Canadians snowbirds, Boomers, and seniors with their unique travel insurance needs.
This article has been edited for clarity and length.
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