Never retire profile of the week
Bernie Sanders
The 78-year-old US Senator from Vermont – and Democratic candidate for president – was born September 8th, 1941. He’s passionate about his beliefs, supported by a diverse coalition of voters, and is a rock star to millions of supporters, young and old. If he wins the Democratic nomination and the General Election in November, he will become the oldest elected president in US history. And if he serves two consecutive terms, he will leave the White House at age 87. How’s that for never retiring?!
Ever wonder if travel insurance is worth it? Don’t. The answer is an absolute “yes!”
In my 25-year career, I’ve had three clients die while on vacation. One incident occurred when a couple drifted across the highway median late at night coming home from Florida. They hit an oncoming car. Another situation involved a man who suffered a brain aneurysm, went on life support, and eventually died in a Fort Lauderdale hospital.
I have also heard of numerous situations where people ended up with non-fatal medical conditions that led to significant expenses.
As an example, consider what happened to Canadians Alex and Jennifer Witmer during the recent Christmas holiday.
The couple was travelling in Thailand when Alex was hospitalized with what he thought were persistent migraine headaches. He ended up being diagnosed with a large brain tumour. The local doctors, who believed the tumour was cancerous, gave Alex medication to stabilize his condition and recommended he fly back to Canada as soon as possible for surgery, chemotherapy and radiation. Jennifer contacted the company that provided the couple’s travel insurance to determine if they would cover the $256,000 required for an air ambulance to get Alex home safely. The answer was “No.”
Here’s why.
A month before the couple secured travel insurance and left for their trip, Alex had checked into Emergency at a Moncton hospital near their home with flu-like symptoms. Though the couple had no memory of it – and thought nothing of it at the time – Alex reported to the admitting nurse and attending physician that he was experiencing headaches.
The representative from the travel insurer told Jennifer that because the hospital visit had occurred within three months of their departure, the headaches were evidence of a pre-existing condition. Thus, the cost of the flight would not be covered.
The Witmer’s situation attracted significant attention on social media and in mainstream news outlets, which eventually led the insurer to agree to cover the cost of the air ambulance.
Once Alex was home and treated, it turned out the tumour was benign. But the Witmer’s situation – and less extreme stories I have heard about – is a cautionary tale about travel insurance.
Anything can – and often does – happen. And the majority of expenses you may incur if you need medical care in another country will not be covered by OHIP. Insurance is a must.
Most travel insurance plans contain both medical insurance and cancellation insurance. For the purposes of this article, I’d like to focus exclusively on out-of-province medical insurance.
As a side note, don’t go for the cheapest option for travel insurance. I suggest looking for the most comprehensive plan you can find that comes with a reasonable price tag.
Know what you are buying
To begin with, a word of advice about how to assess insurance policies.
While preparing for this article, I reviewed a range of travel insurance policies. My main takeaway? It’s no wonder Canadians are often unsure about what is – and is not – covered by travel insurance. (One policy I read was 12 pages long and contained 27 separate exclusions for medical coverage!)
As a wealth advisor in Toronto, I read every insurance policy I purchase carefully, including for travel, car (personal or rental) and home.
Yet I know from experience that most people don’t read their policies and make assumptions about the coverage. Is this you?
When you buy insurance, I urge you to either read the individual policy carefully or have someone do it on your behalf. A careful read can make all the difference, especially when it comes to understanding how your potential insurer defines “pre-existing medical condition.”
Just think about how the Witmer’s situation could have been different if they had known what they were buying. Or consider the massive financial implications they faced if their case had not attracted enough media attention to pressure the insurer to cover the cost of the air ambulance. Not good.
Be clear about when your insurance company won’t pay
The point of buying a travel insurance policy is to mitigate the risks of something happening that leads to major medical expenses. So your main priority is to know when insurance will – and will not – pay out.
Most policies cover pre-existing conditions if the condition is stable for anywhere from 90 to 180 days (depending on your age) prior to the effective date or departure date. But what exactly is a “stable pre- existing condition?”
When you apply for insurance, you are considered to have a stable condition if your diagnosis, treatment, and medication have not changed recently. You notify the insurer of your condition when purchasing the plan, they factor it in, and you pay your premiums. Simple.
Where it gets complicated is with “unstable pre-existing conditions.”
Here are some examples of what an insurer might consider an unstable pre-existing condition (if it occurred in the 90 or 180 days prior to your departure date or the effective date of the insurance).
- A new treatment prescribed or changes to existing treatment (this includes stopping a treatment).
- A new existing medication or new prescription drug.
- A worsening of a medical condition.
- New more frequent or more severe symptoms.
- Referral to a specialist or required hospital visit.
- Outstanding medical test results.
- Pending or planned treatments.
This is exactly what came up for Alex Witmer when he visited a hospital within 90 days of the couple’s departure.
While we don’t know if his headaches were becoming more frequent or severe, we do know that tumours don’t spring up overnight. It’s reasonable to assume he had the tumour for some time, even though he didn’t know it.
Alex’s situation was extreme, but the basic premise is the same. If you have an unstable pre-existing condition, your insurance may be at risk. So how do you know if you have one?
Ask yourself the following question: “Given my current symptoms, would an ordinary prudent person have obtained medical attention during the three-to-six-month period before departing on their trip?”
If the answer is “Yes,” you probably have an unstable pre-existing medical condition. That means a travel insurance company may not cover medical costs related to treatments you require.
Also, look carefully for other exclusions that may affect whether your insurer will cover you or not. Here are three examples.
- In the event of an emergency visit, the insurance company must be notified within 24 or 48 hours of the incident. (Failure to do so may result in denial of coverage.)
- Injuries from high-risk activities (mountain climbing, rock climbing, etc.) are excluded.
- Injuries due to acts of terrorism or war are excluded.
Today it’s Coronavirus. Tomorrow it could be anything.
As I write this blog, Coronavirus is spreading across the globe. I can’t help asking myself, “If I get sick with the virus during a trip to Florida, will my travel insurance company cover my hospital stay? Or will they claim I had an unstable pre-existing condition?”
I don’t have the answer to this question, but your insurance company does. (If you are about to travel, call them and find out how they answer this question.)
Here’s the bottom line: don’t cut corners related to travel insurance.
Start by reading your potential (or current) policy closely. Then, as your trip approaches, don’t assume that whatever pre-existing condition you have is stable. Review your medical history and consult with your doctor or insurance company. You want to clearly understand your insurance and the risks you are taking on.
An important aspect of the Stay Rich philosophy is knowing how to protect your wealth. That includes uncovering risks and mitigating against catastrophic costs such as unplanned medical expenses.
Travel – for business or pleasure – is a wonderful and common thing. Don’t let it become something you regret.
Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.
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Call me if you in want to map out how you can Never Retire. You can also subscribe to our Never Retire Newsletter, contact us to order a complimentary book, register for one of our events, and call us to meet with a Certified Financial Planner. We offer you a range of services from a financial plan to investment advice or helping you take advantage of our investment models. Call me at 416-355-6370 or email me at richard.dri@scotiawealth.com.
source https://richarddri.ca/be-careful-and-thorough-when-assessing-travel-insurance/
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