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What is the difference between International Private Medical Insurance (iPMI) and travel insurance?

This article asks and answers:

"What is the difference between International Private Medical Insurance and travel insurance?"

But, more importantly…

"As an expat, why do I need to know?"

Broadly, travel insurance is for people who are away from home for short periods (usually six months or less). Travel insurance usually covers things such as lost luggage, flight cancellations and emergency and/or short-term medical treatment.

Health insurance or International Private Medical Insurance (iPMI) is more comprehensive in relation to health care and covers a multitude of areas including: medical emergency cover, doctors' visits, maternity care and the treatment of on-going or chronic conditions. It can also cover non-medical costs such as transportation (to receive treatment) or repatriation.

Expats could find that travel insurance falls short in certain situations, which could mean they would have to self-fund their own treatment, or risk being without the medical care and services they need. In some cases, people are left without the medical care and services that they need. IPMI is tailored for individuals and their families who live abroad and, as such, offers access to comprehensive health care cover, as the article 'Medical crisis: one family's story' shows.

The differences

Living or visiting?

Some countries require iPMI before issuing residence visas. In Switzerland, UAE and Australia for example, you would need a tailored plan that ensures you're covered for local mandated benefits in order to obtain a visa or residency permit. Travel insurance doesn't meet the regional regulations so if you're moving abroad it is essential to check this before applying for visas.

Length of stay

As travel insurance is only available for up to six months, it isn't sufficient to cover all the health care needs of students studying abroad, those on secondment (which are usually for longer than six months), or those retiring abroad. The indefinite or longer stay means that travel insurancewon't be sufficient.

Cost differences

iPMI usually costs more than travel insurance but this reflects the level of cover — as iPMI covers the actual cost of health care treatment or service that can occur while living overseas.

Health care costs vary greatly from country to country, and there can also be significant variations in the cost of commonplace procedures within the same country or city. The U.S. website clearhealthcosts.com shows that walk-in clinic visits can vary between $15 and $982 in the country, while a mammogram can vary between $50 and $5,841 across different states. It can be equally difficult to pinpoint the true cost of health care around the world. Members with iPMI will benefit from reduced health care costs associated with day-to-day outpatient treatmentand long-term condition management, or no costs at all, as the article 'The power of a second opinion' demonstrates.

Managing costs

Travel insurance excess

Travel insurance typically applies a flat excess per claim, which is non-negotiable. This means you will pay the same rate upfront regardless of your treatment needs or how often you claim. As it's a fixed flat cost, plan holders don't have the opportunity to make their payment options more affordable.

IPMI deductibles

IPMI has a full suite of different deductibles (amounts members pay towards a covered claim) to help employers and individuals keep their costs in budget.

  • Budget control for employers

    For employers looking for cost effective iPMI options for their employees, our Aetna Summit plan comes with a standard excess or coinsurance, depending on the plan the employer chooses. These are the amount that employees will pay towards a covered claim.

    At Aetna International, an excess is a flat amount a member must pay towards the cost of part, or all, of a covered claim or claims in a plan year.

    Coinsurance is a of percentage payment applicable to specific benefits, such as covered dental, outpatient treatment, maternity or optical claims. As the rate is a percentage of the treatment cost, this means that the rate is applicable across different currencies and medical rates, making it popular with the globally mobile who might receive treatment in a number of different countries in a plan year.

    You can select a higher excess or coinsurance to benefit from savings on your Aetna Summit plan premium. Alternatively, you can choose to have a plan without any excessor coinsurance payments so that your employees can enjoy cashless access to treatment.

    In addition you can choose to apply a flat monetary amount to outpatient treatments. For example, US$20 per outpatient visit. At Aetna International, we refer to this as a copayment. For example, employees might need to pay US$20 towards every outpatient consultation (treatment consultation that doesn’t require the employee to be admitted to hospital).

  • Budget control for individual members

    For individuals looking to control their premium and keep their costs in budget, the Aetna Pioneer plan enables you to choose your level of excess (the amount you pay towards a covered claim), as well as your level of coinsurance (paying a percentage of covered claims for outpatient, dental, optical or maternity treatment).

Medical emergencies and travel for treatment

If you only have travel insurance you are likely to have less control over your treatment options if you have a medical emergency. For example, you may not be able to fly home or to a hospital of your choice, you will simply be taken to the nearest place that can deal with your situation. IPMI gives members and their families the ability to choose where they want to receive treatment in an emergency. In most cases, your iPMI provider will be able to arrange the evacuation and on-going treatment on your behalf, which isn’t always the case with travel policies

Read more about flying for treatment here.

Pre-existing conditions

Travel insurance won't cover the needs of any pre-existing conditions. You have to disclose any conditions when you apply for travel insurance and if you don't, and then try to claim using travel insurance, your claim will be declined.

iPMI can cover pre-existing conditions as long as these are disclosed by a medical declaration. So, unlike travel insurance, your iPMI provider can then agree to cover any treatment related to these existing conditions.

Mental health factors

IPMI can also address mental health issues because relocating to another country can be stressful. Americans who live and work abroad are 2.5 times more likely to suffer from stress and anxiety than their counterparts back home. IPMI providers will often work with organisations and individuals on preventative cover.

Flying home for treatment

With travel insurance, you might not always be able to travel home for treatment. Your ailment might not be severe enough to warrant flying home, but you might nevertheless need ongoing treatment. Travel insurance wouldn’t permit you to claim. And of course, if you’re very ill, you might not be well enough to travel home.

So how and when do I use them?

As part of your pre-trip planning process or if you're travelling to prepare for a more permanent move, travel insurance is a good option. If you decide to take the assignment or make a permanent move, iPMI may be a more suitable option. At this point, iPMI can support members and their dependents with their health and wellness needs before they make the move, helping to set them up for a healthy future in their destination country.

When to choose iPMI?

While iPMI and travel insurance may have overlapping benefits, they have significantly different purposes.

iPMI vs travel insurance?

As an expat or globally mobile individual, it's vital to choose the health care cover you need. The simplest way to look at it is: if you're living abroad you will probably need a more comprehensive range of health care to cover ongoing and preventative care — as well as emergency cover — than if you're simply on holiday or travelling for fewer than 180 days. IPMI is also there to provide cover in those countries where there isn't a public or state-run scheme (such as the UK's National Health Service (NHS)) that you can rely on when you are away from home.

If you're in doubt about what you need for an upcoming trip, you can always give one of our expert sales consultants a call — just click here to find the right phone number for where you are.

Are you looking for expat insurance? Click here to get a quote.

If you’re an employer or broker looking for international Private Medical insurance for clients or staff, you can call us to discuss your needs. Get the right telephone number for your area, here.

Further reading

For more details on choosing plans for a global workforce, try reading our article 'Tailoring plans for a global organisations'.

Meanwhile, individuals can understand more about the benefits of iPMI in this article: 'International doctors — the difference'.

You can find out more about our International medical insurance by clicking here.

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