There are many different factors that must be taken into consideration when choosing an international health insurance policy. One of the biggest mistakes a lot of policyholders make is choosing the wrong excess amount. This can lead to problems later down the line, as they may find themselves needing to pay a sum of cash before their insurance provider will pay out. If they cannot afford this sum their health insurer will not foot any of the medical bills. This is certainly a position no one wants to find him or herself in. In this post, we are going to provide you with all of the details you need to know regarding global medical insurance policy excesses, including the options you have available to you and some top tips for choosing the right policy for your requirements.
What Is A Policy Excess?
The term ‘excess’ relates to the amount of money you will need to pay before your insurer will contribute towards your medical bill. This can be per annum, per insurance period or it can be per accident – it all depends on your insurer. This is why it is so important to talk to your insurer beforehand to make certain you fully understand the ins and outs of your policy.
To give you a better understanding of how this works, let’s use a couple of examples…
- Barry takes out an international medical insurance policy. He agrees to an excess of $1,000 per insurance period. What does this mean for Barry? Well, if he falls ill or ends up injured he will need to foot $1,000 of the bill. From then onwards, the insurance company will pay all medical costs until the end of the insurance period.
- Sarah takes out a global health insurance plan. She agrees to a smaller deductible of $300 per year. In February of 2018, she is admitted to hospital and has to have a small operation, which costs $2,000. She has to pay $300 and her insurance company pays the remaining $1,700. Unfortunately, her bad luck continues, as she loses her front teeth whilst skiing in March in 2019. The total bill, including all dental visits and the dental implant process, totals $2,550. As she has opted for a per year excess, she needs to again foot $300 of the bill and her insurer pays the remaining $2,250. If her accident were to have happened in 2018, she wouldn’t have had to pay anything, as she had already met the required excess amount for the year.
So now you know about excesses and how they work. But, how do you decide on the right excess amount for you? Surely it makes logical sense to go for the lowest excess possible? Well, the excess amount and the policy premiums work in tangent with one and other. If you go for a low excess policy you can expect your premiums to be quite high. However, if you increase the excess of your worldwide health insurance plan, you can lower the premiums you pay on a monthly basis.
It is all about finding the right balance. One mistake a lot of people make is increasing the excess amount too much. They, of course, do this so that they can lower the premium rate to the bare minimum. However, trouble arises when they fall ill and they realize that they cannot actually afford the excess amount. You need to sit down and assess your finances. How much can you comfortably afford to pay per month? How much can you afford in a one-off payment if something was to go wrong? The whole point of taking out an international medical insurance plan is to provide yourself with financial cover, the last thing you want to do is put yourself in an even trickier predicament.
You also need to consider how likely it is that you are going to require medical treatment. Of course, there are no guarantees in life, which is why all people need some form of cover. Nevertheless, there are some individuals that are more of a risk than others. Do you have a history of illness in your family? Do you have any pre-existing conditions? How many times have you been to a hospital in the past five years? By assessing these factors, you can determine whether it is going to be cheaper for you to go for a high excess plan or not. Let’s explain this in further detail…
- If you deem yourself less likely to require medical treatment, you are probably best off raising your excess slightly. As you will be able to lower your premiums and thus reduce the cost of your global health insurance plan overall. As you are less risk, there is a smaller chance of you finding yourself in a position where you need to pay the excess.
- If you think you are more likely to require medical treatment, you should consider sticking with a low excess plan. As you are higher risk, you are more likely to find yourself facing medical bills, which will mean that you will need to pay the excess amount. It can, therefore, work out a lot cheaper to lower the excess sum instead of your premium rates.
It is vital to stress that there are no guarantees and calculating your probability of needing medical treatment should only result in small fluctuations in terms of excess amount. Just because you are fit and healthy does not mean you should put your excess amount up to an extortionate sum. Making sure you can afford both the excess and the premium amount should always be your first concern. Establish a cost range for both if this helps. You can then use the other factors that have been mentioned in this post in order to determine the right premium amount and excess amount, whilst ensuring it is in keeping with the range you determined in the first place.
All things considered, the last thing you want to do is increase your policy premiums to such a high level that they essentially make your entire global health insurance plan void. No one wants to experience this, especially when they are unwell. So, carefully assess this aspect before taking out a policy. If you already have an international medical insurance plan, now is the time to assess your excess amount. If you don’t feel confident with what you have in place, give your insurer a call to discuss your options.