Do I need travel insurance?

Posted on Jul 20, 2016 by Rob McBroom

The summer months are well upon us, and many expats in China are either on their way home for a short break or are heading out for shorter trips around the region. Because so many expats will be traveling over the next few months, we have had a number of questions from clients and friends regarding what type of insurance is best suited for providing coverage while away. To help, we have created this short guide on travel insurance in China.

Types of insurance ideal for travel

Generally speaking, there are two types of health insurance available in China that will be able to cover you while you are away on vacation:

Both of these types of coverage offer worldwide coverage meaning that you can receive care in pretty much every country in the world. Of course, there are differences between the two types of plans, with the most identifiable being:

The type of coverage offered - International health insurance plans are usually just that: health insurance. Travel insurance plans, however, are a little more broad in what they cover, with medical care often being simply a part of larger insurance plan which also covers things like travel delays and lost luggage.
Coverage limits - As one can expect, the coverage limits for international insurance are usually considerably higher than most travel insurance plans meaning that the chances of you paying out of pocket are lower with international health insurance.
Cost - Most travel insurance plans come with a time limit that is applied to each trip. For example, the cover will only be valid for the time you are out of the country, or will only be valid for 30 days, while medical insurance can be used at any time and is usually sold on an annual basis.

Do I need travel insurance?

If you already have an international health insurance plan it can often feel like travel insurance is simply not necessary. While this is true when it comes to medical coverage - most international health insurance plans offer far better coverage than travel insurance plans - travel insurance is still recommended.

The reason being that this type of insurance covers far more than just medical issues. As we noted above, travel insurance also covers things like lost luggage, delays, etc. This makes it easier to ensure that, should something go wrong, you are not left paying for say an emergency flight home, or paying for a hotel if your flight is delayed and the airline is refusing to pay. If you are traveling with your family, any delay or need to reschedule can be exceedingly costly and travel insurance can be a useful tool in offsetting these costs.

5 things to be aware of when securing travel insurance

If you are planning on securing travel insurance for your next vacation, here are five things you should be aware of.

Pay attention to the region of coverage

This is important because some insurance companies will offer travel insurance plans with different premiums for different regions. For example, you may see a plan with set levels of coverage but with different premiums offered. The first premium will be for cover only in Asia, the second will cover the rest of the world.

On the other hand, there are travel insurance plans out there which offer one premium for worldwide travel. It is, therefore, important to ensure that you secure the correct coverage for the region you will be visiting, or at the very least be aware of the countries covered by your preferred travel insurance plan.

Travel insurance is designed primarily for emergencies

In the past half decade, we have seen a steady increase in the number of people traveling for medical tourism. For example, people in Shanghai will head to Thailand for surgeries or extended medical care primarily because it's more affordable and the quality is the same, if not better. While this has become popular, most travel insurance plans have not been developed to cover this type of medical care.

They are instead designed to provide cover for emergency treatments and medical care. If you take a look at the coverage limits associated with medical care on travel insurance plans you will see that the limits are usually lower, and often just enough to cover care that will see you well enough to fly home, where your main insurance plan can take over.

Other plans actually state in their terms and conditions that they will only cover medical care if it is deemed to be urgent. This means that a doctor or the hospital you seek care at will need to note somewhere that care was urgent and medically necessary.

Most travel insurance plans are reimbursement-based

Many, if not all, international health insurance plans operate a network of healthcare practitioners and hospitals that all accept payment directly from the insurance company (called direct billing). This means that if you need to seek medical care the hospital will bill your insurer first, often ensuring you don't actually have to pay. With travel insurance plans you may be required to pay first then submit a claim to the provider for reimbursement.

In other words, you may want to budget a bit extra for medical emergencies if you plan on using just travel insurance.

There are time limits attached to most plans

As we stated above, travel insurance plans are not designed to offer long-term coverage. Most, in fact, are single policies meaning that if you will need to take out a separate policy for each trip you take. Other plans offer yearly coverage with an unlimited amount of trips, but will only cover a set period of time e.g., 30 days for each trip.

If you plan on being away for a longer period of time, it may be a good idea to look into another type of plan.

You have options

Finally, you do have options. Most of the major insurers out there offer travel insurance plans. As with other types of insurance, this means that coverage limits, coverage regions, and premiums will all be different. When it comes to travel insurance, it will help to shop around!

If you are traveling somewhere this summer, visit our travel insurance page to learn more about how Pacific Prime can help you secure the best travel insurance coverage on the market.