Arranging appropriate medical insurance before moving overseas should be made a priority. If choosing a provider in the resident country, expats need sound advice to ensure they are getting the best cover for their needs
With a growing number of people choosing to move overseas, either to work or retire to the sun, choosing a place to live, organising removal firms and transferring bank accounts will be high on the list of things a prospective expat will think about prior to moving. Arranging appropriate private medical insurance should also be a priority.
While medical insurance is often considered a luxury in the UK, in most countries it is compulsory for expatriates to have full private medical insurance (PMI) for at least the first three months or until residency status is granted, in order to avoid a potential influx of people using the state health system. Therefore, it is vital that PMI is in place before a person actually moves overseas.
Some expats choose to take up policies with insurers based in their new country of residence as these may seem relatively inexpensive. Expats sometimes assume that the insurer's local knowledge will mean that a policy is more suited to the health system of that particular country rather than looking at plans available from UK insurers.
If your client is planning to purchase PMI from a local insurer, it is essential that you consider a number of important questions before helping them select a product.
How long has the company been in operation and how reputable is it?
Many UK PMI providers have been in business for many years so may be well-known to you, but when choosing an overseas provider it may not be possible to ensure that they are reputable quite as easily
It is not unusual in some countries where there is little regulation for new insurance companies to appear and then fold very quickly.
Therefore, you should recommend a well established and respected company to avoid the risk of it disappearing altogether, or of your clients' claims not being paid.
Does the policy offer cover for treatment in any hospital and by any doctor, or are there restrictions under the plan?
Some insurers restrict the hospitals and doctors available under a plan. In Spain, for example, some local insurers restrict cover to the region in which the expat lives, rather than giving the freedom to have treatment by any doctor in any hospital throughout Spain. This means that the best or most appropriate specialist to deal with a particular condition might not be available to the policyholder.
Freedom to choose a doctor or hospital is especially important in countries where English is not the first language. If this is the case, it is reassuring to know that the doctors and hospital staff in your local hospital speak English. It is important to remember that medical terminology can be especially difficult to understand in another language.
You should also ensure that your client has adequate cover for travelling both within their country of residence and abroad. While travel insurance covers medical expenses, some private medical insurers also offer portable cover, which means that benefits apply if hospital treatment is needed when outside their country of residence.
Does the insurer provide full policy wording in English?
In order to judge whether a policy is suitable, it is important to be able to read in full all rules and benefits. While most medical insurers in the UK attempt to make the wording of these rules and benefits as transparent as possible, it is vital that the exact implications of the rules are understood. It might also be worthwhile checking that the company employs English-speaking staff should your client need to contact them directly about their policy or about a particular claim.
Does the literature clearly explain exactly what is covered under the plan?
New regulations covering the sale of general insurance products, including PMI, have recently been introduced in the UK and throughout the EEA. In other countries, the level of regulation may be much less robust or even non-existent. It is, therefore, particularly important to study the benefits and rules of a policy from a company based outside of the EEA.
Can the policyholder change their mind after registering?
Most insurers in the UK give a 'cooling-off' period so the policyholder can be sure that they are happy with the terms of their policy. If, before the end of that period your client decides they do not want to proceed with the policy, they are able to cancel it.
Can a claim be made immediately after taking out a policy?
Some insurers state that a claim cannot be made on a policy until the plan has been in place for a set period of time - if this is the case, you should ensure that your client can pay for their own treatment should they become ill between the date on which the policy is taken out and the date on which they are entitled to make their first claim.
Does the policyholder have the right to renew their policy in future?
Most major UK PMI providers are unlikely to refuse to renew a policy unreasonably, or because of a claim on it during the previous year. However, some overseas insurers do consider a customer's claims history when the policy is due for renewal. So you should check the renewal terms of any policy.
Are future premium increases clearly explained?
PMI subscriptions are generally reviewed on an annual basis, often resulting in an increase in cost above the rate of general inflation. This is usually because of the rising cost of medical treatment and an increase in claims costs. It is also important to check whether or not there may be other reasons for premium increases. To give some examples, the insurer may increase premiums on attaining a certain age. Or maybe a discount will be lost, or perhaps there will be a subscription increase due to a claim on the policy.
Is there an appeal process or regulatory body?
In the UK, PMI providers are obliged to provide details of their complaints procedure in the customer documentation, and if there is a complaint that cannot be resolved, then the case can be referred to the Financial Ombudsman's Service. If recommending an overseas insurer, you should make sure that there is a formal complaints procedure and if there exists an independent organisation that can be contacted in the event of a dispute.
Will personal details be secure?
Most countries have data protection laws but the terms of these vary, particularly in countries outside the European Union. It is therefore important that you check any documents carefully before your client signs them.
There are certainly distinct advantages to choosing a UK-based insurer and arranging PMI before a person moves abroad. With the development of the internet and email, it can be just as easy to contact a UK insurer about a policy and any claims as it is to contact a locally-based company.
However, the benefits offered by any insurer should be clarified to ensure that they suit both the health system in your clients country of residence and their own personal circumstances. Some insurers in the UK have specific plans for individual countries which are designed to complement the health systems in place in that country, and this is often the most suitable choice for the prospective expat.
In most countries it is compulsory for expats to have full PMI for at least the first three months or until residency status is granted.
Expats sometimes assume that an insurer's local knowledge will mean a policy is more suited to the health system of that country.
The benefits offered by any insurer should be clarified to ensure that they suit both the health system in a client's country of residence and their own personal circumstances.
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