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 bill. 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 medical condition – 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…

A)

Barry takes out an international medical insurance policy. He agrees to an excess of US$ 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 US$ 1,000 of the first bill. From then onwards, the insurance company will pay all medical costs until the end of the insurance period.

 

  1. B)

Sarah takes out a global health insurance plan. She agrees to a smaller excess of US$ 50 per medical condition. In February of 2014 she is admitted to hospital and had to have a small operation, which cost US$ 2,000. She had to pay US$ 50 and her insurance company paid the remaining US$ 1,950. Unfortunately, her bad luck continued, as she broke her arm whilst skiing in March 2015. The total bill, including an X-ray, cast and doctors visits, totals US$ 1,000. As she opted for a per medical condition excess, she needed again to foot US$ 50 of the bill and her insurer paid the remaining US$ 950.  Even though her skiing accident involved multiple visits to medical practitioners as well as drugs and dressings, she only paid the excess once as each treatment was related to a single medical condition.

Considerations

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? No always.  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 premium you pay.

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 realise 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? How many times have you been to 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 could increase your excess which will lower your premiums and thus reduce the cost of your global health insurance plan overall.
  • 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, which is why it’s important to have international health insurance in the first place. 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. So, carefully assess this aspect before taking out a policy. If you already have an international medical insurance plan, now is the time to look your excess amount. If you don’t feel confident with what you have in place, take note of when your policy renews and when it’s time, give your insurer a call to discuss your options.