Hopefully you already realise that as a nomad, it’s important to have insurance. If you’re not quite there yet, watch out for a future post on that topic soon. This post is for those who know they need insurance cover, but aren’t quite sure which one to buy – because there’s not just competition between different insurance companies, there’s also competition between different TYPES of insurance policies.
In this post, we’ll cover the main two relevant to global nomads – Travel Insurance, and Medical Insurance.
What is Travel Insurance?
Simply put, travel insurance provides you with protection whilst you’re on your travels, whether that’s a holiday for a week or a year-long trip around the world. Whilst the specifics of different travel insurance policies vary (by “specifics” we mean what it actually covers, in particular the maximum limits you can claim for, and most importantly what it does not cover) depending on the insurance company, they all have the same objective and/or selling point: They protect you against things which could go wrong whilst you’re travelling.
In most cases, this means that with travel insurance, you will be covered for things like:
Emergency medical treatment
Theft of personal possessions
Generally speaking, because it’s “Travel” insurance, you are not fully covered in your home country (often not covered at all, and if you are, there’s usually a strict maximum number of days you’re covered for, and limits on what you can actually claim for), and the general purpose of this type of insurance is to get you back home safely. Note – once you’re back home, its job is done.
Travel insurance is ideal for people making short-to-medium length trips, and is very useful for nomads who travel frequently, particularly if flying with low-cost airlines in developing countries where you’re unlikely to have any assistance whatsoever if your flight is cancelled or significantly delayed.
Travel insurance generally reimburses you for any costs you’ve paid which the travel insurance company approves (note that it’s not guaranteed that you will get reimbursed), which means that you usually have to pay first, then provide receipts and other documentation, and then have the money sent back to you. This works fine for things you’ve already bought, such as a camera which gets stolen and can be replaced when/if you receive the money for it back from the insurance company a few weeks later, but means that you need to be able to pay for medical treatment upfront before you can claim back the cost later. There is usually nobody you can call in advance to check if your potential claim would be covered either. Not ideal for medical expenses!
As a final “value bomb” to drop (yes we are being ironic), when you see something advertised as “Travel Medical Insurance”, note that it is actually “Travel Insurance” with a more marketing-friendly name. It could also be called “Travel Luggage Insurance”, but nobody calls it that because it wouldn’t sell as much. If it has “Travel” in the title, it’s travel insurance, which falls into a completely different regulatory licensing category (it’s classified as general insurance as opposed to personal insurance).
What is Medical Insurance?
Simply put, medical insurance protects your overall health, by providing you with protection for medical issues, in that it pays for private medical treatment when you need it. The coverage levels will vary, depending on the insurer and also the level of cover that you choose, and many have geographical limits too – most “local” medical insurance plans will only cover you in the country that you bought the insurance policy in, and most “international” medical insurance plans will cover you anywhere except the USA (because the USA has a completely different healthcare system than the rest of the world, and it’s super-expensive).
It is CRUCIALLY IMPORTANT, when selecting a medical insurance policy, to check where on the planet you are covered – you do not want to find out that you’re not covered when you need to use it. Some insurance companies specifically do not cover you in areas which *they* consider to be “high risk”, which might actually be very low risk in your opinion.
Typically, medical insurance policies will cover any treatment needed, from the start of a problem all the way through to complete resolution of the medical procedures required, up to the maximum limits of your plan. The best ones (not all of them, so check) will pay directly to the hospital, which means that you don’t need to pay first and then claim it back later. This is hugely important, because in many countries, if you can’t pay, you don’t get treated. It then becomes a bigger health problem, in addition to a bigger financial problem.
Which one is best for nomads?
To answer this question properly, it’s important to note that these two types of insurance, despite some overlaps, are COMPLETELY DIFFERENT types of insurance cover, and provide a solution to completely different problems.
Obviously, medical insurance doesn’t cover you for things like a delayed flight – because it’s got no relevance to your health. Similarly, travel insurance – or “Travel Medical Insurance” – doesn’t cover you for things like cancer treatment, because there’s nothing stopping you jumping on the next flight home if you’re diagnosed with cancer.
If you asked a medical insurance company to pay for a new flight if your airline told you they had cancelled yours, the medical insurance company would tell you that they don’t cover flights, they only cover your health and related medical requirements, and that you should sort out your travel plans yourself. Similarly, if you asked a travel insurance company to cover the cost of a hospital operation a doctor says you need in the near future, the travel insurance company would tell you that they do not cover hospital operations, they only cover things which get in the way of your travel plans, and that you should stop travelling and go home to get that operation you need – and sort it out yourself.
Where the two overlap (usually the only place they overlap) is on EMERGENCY medical treatment, OUTSIDE of your home country – things like breaking your arm, coming down with a mystery illness, being hit by a bus etc. Generally speaking, that’s it. Both will provide you with the immediate emergency treatment you need.
For non-emergency medical procedures such as a scheduled operation, kidney dialysis, organ transplants (and anything else which is planned by medical practitioners in advance which you have an appointment for), MEDICAL insurance will pay for it – and TRAVEL insurance will tell you to go home. If you go home, MEDICAL insurance will still pay for your medical treatment, and TRAVEL insurance won’t be relevant because you’re not travelling anymore, and won’t pay for it.
So it’s not really a question of “which one is best” – that’s a bit like asking if an apple is better than a banana. They’re not really comparable, apart from the narrow range of things they overlap on.
A better question to ask is: Which one is best for YOU. And the answer to that, will likely depend on the answers to the following key questions:
- What are you trying to achieve by purchasing insurance?
- Do you have access to full free medical treatment at home?
- Would you want to be forced to move back to your home country if you needed regular medical treatment?
- Would you prefer to use private hospitals immediately, rather than join a waiting list for public healthcare?
- If you were forced by travel insurance to go “home”, and had to wait for medical treatment whilst on a waiting list, would you have somewhere to live and be able to pay for the cost of living whilst waiting for treatment and whilst recovering after treatment?
- How much is the cost difference between the two insurance types?
As a general rule, if you are on a relatively short (a year or less) trip abroad and want to make sure that you are protected in the event of an emergency whilst you TRAVEL only, and want to make sure you receive assistance to get back home ASAP if anything goes wrong, travel insurance is the way to go.
If you’re looking for protection for MEDICAL issues on an ongoing basis – particularly if you permanently live “abroad” as a global nomad, or simply would rather get any health issues fully fixed at the best hospital available if something goes wrong (rather than have a travel insurance company looking for the quickest way to have you deported back to your home country), medical insurance is the way to go.
If you’re only considering buying travel insurance for the medical protection, you’re probably better off buying actual medical insurance. And if you can afford it, it’s always good to have both! That way, you’re covered for missed flights and lost luggage on your travel insurance, and also taking care of your actual health and medical needs with your international medical insurance.
It’s also worth noting that anytime there’s government advice against travelling (this has always applied to travel to specific areas/regions/countries, i.e. war zones), travel insurance won’t cover you, because you shouldn’t be travelling. In the age of Covid-19, with wide-ranging “do not travel” restrictions in place, it means that if you travel from one country to another, you’re likely breaking the terms and conditions of your travel insurance, which often will then simply not pay out, even in a medical emergency, because it legally doesn’t have to. Because proper international medical insurance covers you anywhere, international medical insurance companies don’t get fussy about where you are and why you’re there, if and when you need to make a claim.
In summary, these are the key questions to ask yourself:
- What do you actually want to achieve by purchasing insurance?
- What is each product designed for, and which one fits your personal objectives best?
- What is covered AND not covered on each type, and which are you more comfortable with?
If you’re looking for an international medical insurance, designed for long-term global nomads and expatriates, to compare to a travel insurance policy, check out https://www.MedicalForNomads.com, which has the full details of the four different cover levels available. You can also get an instant online price based on your age and current location at https://MedicalForNomads.com/get-a-quotation.