Important factors to consider in residence planning
Andrej Beuth, Managing Partner, Swiss Insurance Partners, Switzerland
People who have citizenship from one of the top-ranked QNI countries (The Henley & Partners – Kochenov Quality of Nationality Index) certainly enjoy various advantages, chief among them being travel freedom. However, the more opportunities and travel freedom people have, the more they need to carefully choose their international health insurance plan. While many countries run a compulsory health insurance scheme with basic cover, this is often inadequate for international travel, as only supplementary and worldwide cover can fulfill the necessary requirements when abroad.
Global citizens, expatriates and frequent travelers usually expect an unrestricted choice of doctors and hospitals worldwide. Although an international insurance policy which provides such cover — independent of the place of residence or duration of the stay in any particular country — is naturally more expensive, it is often well worth the extra cost. More often than not such policies will also provide for repatriation, the need for which many travelers take for granted. On the other hand, some national health plans offer a restricted-area option (for instance in Europe only) for people who do not need worldwide cover. This option is usually preferred as it allows travelers to reduce their premiums.
Cover offered by local health insurers is typically limited to residents of that country and has limited coverage for temporary stays abroad. If someone moves overseas permanently, their health insurance policy will not, as a rule, be continued in their destination country. They are then left with a choice of either finding a local insurer in their new country of residence or turning to an international health insurance provider.
Having private international health insurance makes sense for expatriates, global citizens and frequent travelers alike. About two thirds of expatriates with private health insurance are covered by a corporate plan arranged by their employer. Those who prefer to make their own arrangements or are not eligible for these benefits can do so by taking out individual private health insurance policies.
Even those who have no plans to live abroad would do well to choose an international health plan over a local private health scheme, as the public health systems of most countries provide only basic services and do not offer choice regarding doctors and hospitals. Comprehensive cover is strongly recommended and is sometimes available only by choosing an international health plan.
To ensure uninterrupted health insurance cover at a reasonable cost when moving abroad, one should be aware of the relevant legislation of the various countries. Some countries make provision for all residents to be covered by mandatory basic health insurance, so nationals returning from abroad may also benefit from at least such basic cover. However, it is naturally at the discretion of private insurers to decide who is eligible for their private health cover.
There are many health plans to choose from whose benefits and prices vary widely. Policies differ greatly, not only in their coverage of optional extras such as dental treatments, but also with regards to major eventualities such as transplants and chronic illnesses. It is therefore relatively difficult to compare the wide range of products available internationally, and a considerable amount of time and effort are needed to at least obtain an overview of the key features, benefits, exclusions, options and premiums.
Very often, people look at what they are currently paying but neglect to consider what will happen when they get older. Most insurers charge tiered premiums, with the tiers typically rising in age bands of five years. It comes as little surprise then that the premiums of some health plans become extremely expensive for higher age bands. This pricing policy is justified by the fact that the need for medical care becomes more likely with increasing age. However, there are a few companies that offer more balanced premium curves.
Persons over 55 years of age or with health problems may find it difficult or even impossible to obtain such insurance in addition to the basic healthcare provided by the country to which they are returning. As such, it is highly advisable to take out appropriate health insurance at a younger age and before the first signs of any health-related disorder manifest.
When considering long-term cover, it is important to look not only at the product being offered but at the company itself. There are many attractive policies on the market, some of them at very affordable prices. Even so, it is advisable that individuals review the company’s claims-handling procedure before purchasing the cover. When reviewing, also consider what the situation will be like in 10 years’ time and whether the health plan — or even the company — is likely to still be around.
Nearly all private health insurers operate through insurance brokers who give advice to those seeking tailor-made insurance coverage. In return, brokers receive a commission from the insurer whose product is chosen. However, no provider reduces the premiums by the value of this commission if the client buys from them directly. Therefore, it makes sense to seek such advice, provided that the insurance broker is truly independent, has the necessary expertise and experience, and does not work under contract for only one insurer. The benefit of using an independent insurance consultant is that they are experienced in identifying potential problems because they continuously monitor the health insurance market worldwide and compare cover, premiums and level of service.