Travel Insurance – why travel medical insurance policies have 10,000+ words?

The average policy for travel insurance contains 10,000 words and typically takes the form of a 20+ page document which outlines all the terms and conditions of the policy printed in a tiny font that is smaller in size than the average paperback novel and difficult to read as a result. Every travel insurance policy advises that you should “READ YOUR TRAVEL INSURANCE POLICY CAREFULLY” or some wording to that effect which is often on the first page of the policy.  Good advice but rarely followed.

I have been in the travel insurance business for over 25 years and have read many policies which takes me more than a hour on average due to the complexity of the text.  Reading your travel insurance policy is one thing, comprehending what is basically a legal contract is quite another. In my experience most travel insurance policies are not written in plain language, are extremely difficult to understand even for the most experienced traveller and are intended to protect the travel  insurance company in the event they choose to deny your claim.

Policy Definitions

All travel medical insurance policies sold in Canada include a long list of definitions of commonly used words. For example, one of the leading travel insurance company’s policy included over 30 definitions which took more than 1,500 words – almost 15% of the policy was dedicated to defining commonly used terms. These definitions also included verbiage that was designed to limit, restrict or exclude coverage.

For example most people would naturally expect that their travel medical insurance would pay for prescription drugs should they become ill when travelling.  Here is an example of a typical travel health insurance policy’s definition of “Prescription Drug”;

Prescription drug is  “drug or medicine that can only be issued upon the prescription of a licensed physician or dentist and is dispensed by a licensed pharmacist”. Prescription drug “does not mean such drug or medicine, when you need (or renew) them to continue to stabilize a condition which you had before your trip, or a chronic condition.”

In this example the travel insurance policy defines what is meant by “Prescription Drug” and what is NOT meant – confusing to say the least. In other words, buried inside the definition of Prescription Drugs is an exclusion which can be used by the insurance company to deny your claim if you’re prescribed any medication for a pre-existing condition.

Many definitions of standard terms in a travel medical insurance policy are really exclusions, limitations or conditions in disguise that can be used by the insurance company to reject or deny your claim or otherwise reduce benefits.  A more serious example of this is the definition of the simple English word “Stable”.  Every travel insurance policy has a different definition of the word Stable and it is critically important because it will affect your claim which may be denied as a result.

Under Webster’s medical dictionary the word  “Stable” is defined simply as “not changing or fluctuating, the patient’s condition was listed as stable” (11 words). Here is an example of typical definition of the word “Stable” in a travel health insurance policy;

Stable – any medical condition or related condition (including any heart condition or any lung condition) for which there have been:

• no new treatment, new medical management, or new prescribed medication; and

• no change in treatment, change in medical management, or change in medication; and

• no new symptom or finding, more frequent symptom or finding, or more severe symptom or finding experienced; and

• no new test results or test results showing a deterioration; and

• no investigations or future investigations initiated, or recommended for your symptoms; and

• no hospitalization or referral to a specialist (made or recommended).

Here again a simple word is defined in the travel insurance policy with 100 words and includes very specific language which may limit your coverage and result in a claim denial. You may have reasonably felt that a medical condition that had not changed prior to travel ie. “Sable” would be covered under your travel medical insurance policy. Unfortunately this may not be the case if your claim is reviewed using the stricter definition.  In fact many claims are  denied by travel insurance claims departments simply because your doctor has changed your medication prior to travel or there was “new medical management” whatever that means?

Policy Benefits

The average travel insurance policy provides 15 to 20 benefits or sometimes called the “what’s covered” section of the policy which is the main reason why you choose to purchase the travel insurance policy. These benefits typically include such things as hospitalization, physician fees, prescription drugs, ambulance (air and ground), emergency dental treatment etc. This is the section of the policy that most people pay closest attention to in order to compare one policy to another before making a purchase decision.

In one of the leading travel insurance company’s policy the “What’s Covered’ section had 15 specific benefits numbered 1 through 15 and took 1,800 words to describe.  However, the policy also includes a “What Is Not Covered” section with 26 exclusions that took almost as much space and as many words.

Most of the exclusions  are standard in every travel medical insurance policy and are common sense such as “If you incur expenses covered under this insurance due to the fault of a third party, we may take action against the party at fault” which is reasonable. Others are more restrictive and can substantially impact the quality of the coverage you’re purchasing and vary significantly from insurer to insurer.

For example a more serious exclusion that can be used by an insurance company to deny your claims is;

“Any medical condition if any answer provided in your medical questionnaire is incorrect, in which case the policy is void and the premium paid is refundable at our option.”

This means that if you had to complete a medical questionnaire to purchase the travel insurance, when you submit your claim the travel insurance company will obtain medical information from your physician. If it turns out that the information you provided on the insurance application is different from what is listed on your medical records your claim can be denied.

Claim Denial

There was a real life example of a large claim over $50,000 that was denied by an insurer using this exclusion.

In that case the person had been rushed to the hospital for emergency treatment of a respiratory problem while vacationing in Florida. After investigating the claimant’s medical records provided by their family physician in Canada, the insurance company determined that this person had been prescribed 2 medications for a lung condition. Although the claimant’s condition was “Stable” prior to travelling and would have been covered, the travel insurance company denied the claim because the person had only indicated that they were on 1 medication not 2 as was recorded in their medical records.

Did this person intentionally mislead the insurance company in order to get a lower rate?  In fact the reason why they had only indicated 1 medication was because they were using a “puffer” or inhaler to treat their lung condition – 1 prescribed device so they thought. Unfortunately, they were not aware that the “puffer” they were prescribed by their physician actually contained 2 different medications in the single device. A simple error and misunderstanding on their part caused their claim to be denied.

Know Before You Go

Now you know why every travel insurance company policy includes a disclaimer that the policy is subject to terms and conditions which may limit coverage and that you should “READ YOUR TRAVEL INSURANCE POLICY CAREFULLY”.  Please read your policy and if you are unsure of something in your policy contact the insurance company and ask questions.

As the old saying goes you get what you pay for! This is especially true when shopping for travel insurance so make sure you understand  “what’s covered” and more importantly what is “not covered” which is often a much longer list.

Always travel Safe & Secure – GoInsured

Mark Anevich
Travel Insurance Expert
LinkedIn Profile

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