You Bought Travel Insurance. But Did You Buy Coverage?

This winter, millions of Canadians will vacation out of the country inadequately insured for emergency medical care. About half will have no travel insurance, while others will have policies they didn’t read, or that they bought at the last minute after shopping around for the cheapest price. Insurance is insurance. Once size fits all, right? Wrong.

Over the years I have seen many people come close to financial ruin because they didn’t take proper care when buying travel insurance: They didn’t know that it has exclusions and limitations, they didn’t fill out their medical questionnaires completely and accurately, but they still thought they would be out of harm’s way once they had their policies firmly tucked away in their pockets.

Let me put it to you this way: What if when you return from your winter vacation in 2010, you find yourself faced with demands from a US hospital for $125,000 that your insurer says it will not pay? What will you do? Run to your lawyer? He or she is not going to help you if made a bad deal. And believe me, the implied threat that you will “have no choice but to refer this action to your lawyer” does not strike terror into your insurer’s heart. They deal with this kind of threat all the time.

If you are in perfect health, take no medications, see your doctor once a year for a routine physical, and have never been in hospital except when you were a kid, insurance is a pretty easy buy. No pre-existing conditions to worry about. The cheapest price. Away you go.

But if you don’t fit that paradigm and you have to provide some medical information—such as the number of medications, conditions, and symptoms you have had treated over the past five years, or whether you have ever been treated or investigated or been referred for consultation for any of a long list of medical conditions—then you need to take care and think over your answers. I have seen countless applicants say—after the fact, when their claim is denied—that though they had certain symptoms, neither they nor their doctors thought them important or relevant so they didn’t check them off on the application.

And there have been other times when I have listened to sales agents and clients running through a list of medical terms on the phone: “Have you ever in the past five years had… a blood disorder, gastrointestinal disorder, chest pain, etc., etc.,” asking you questions you hardly have time to think about before you answer. Total time: 45 seconds. And when you get to the end of the list you think, “Well, that was easy.” Maybe it was easy, but you put yourself at risk in the process. You should never settle on those questions and your answers becoming a basis for your contract until you have had a chance to see in print how they were transcribed. I say this because not all sales agents follow the script they are supposed to follow and, believe it or not, they can make mistakes. If you don’t take the opportunity to correct those mistakes or give more thought to your answers, you will be stuck with the result. And saying “that isn’t what I meant to say” doesn’t hold much water when faced with a denial based on your recorded answers.

Doctors spend many hours of their training learning how to take a medical history. Sales agents try to do it in 45 seconds because their next sale is waiting on the line.

Insist on having a transcript of your medical questionnaire, with your answers recorded, faxed to you for verification and sign-off. Better still, have the medical questionnaire sent to you and complete it by your own hand, on your own schedule, and after giving adequate time and attention to your answers. And if you need to, get your doctor to vet your answers against your medical record and stick to the facts. Don’t try to sort out what you think is relevant or not. Answer the questions as they are put. If you have had a medical consultation or treatment or investigation for degenerative disc disease, you answer “Yes” when asked whether your back hurts or not.

If you don’t think you have time to do this before you leave on vacation because you put off buying your insurance until three days before departure, think again. How many days will it take you to pay off that $125,000 hospital bill? If you think you are immune from hospital debt collectors because you are in another country, think again. Make the time to do it right. Don’t wait to get your insurance on the way to the airport. Do it well ahead of time. Take control of your insurance purchase. Saving a couple of bucks on your premiums is nice. Paying up on a denied claim is not.

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