Author Archives: Fabienne Rapaz

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Travel Insurance or Expat Medical Cover?

by Alex Routh


The last article about non-admitted medical insurance policies generated questions about travel versus medical insurance, and the appropriate choice.


Let’s define travel cover: Travel insurance is usually for short intervals but some policies from Australia I’ve seen can be for up to 3 years. Travel insurance covers accidents and emergencies only, and won’t cover urgent or elective medical problems. Travel insurers expect you to end your trip and return home for elective or urgent treatment, and some policies require return immediately once diagnosed. For example, if you were diagnosed with cancer while on a travel policy, there might be an urgent requirement to commence treatment, but it is not life or death to wind up your affairs and then return home to commence treatment. Travel insurance is also not renewable, if you have a serious medical problem, your cover will end at expiry or when you return home. The underlying assumption behind travel cover is that you have proper medical insurance at home to return to in the event of an urgent or elective medical condition.


Medical insurance covers everything travel insurance covers plus urgent and elective medical treatment. Importantly, it is guaranteed renewable if you are in the midst of a course of treatment at renewal time. If you have international medical insurance, you don’t need travel insurance unless you are traveling outside your area of cover.


For the Americans, because insurance is governed at the state level, there are laws prohibiting outside insurers from insuring residents in any state. Policies therefore have provisions to limit cover if you are outside of your state for more than 6 months. The assumption is that you are in another state, and if they are covering you, then they are violating another state’s regulations and subject to huge monetary penalties. They don’t seem to consider that you might be living out of the country! So the danger is that they might cancel your policy if they learn you are resident out of your home state for more than 6 months. That’s where expatriate medical insurance comes in to replace your stateside insurance. If you are only resident outside your home state for less than 6 months, then travel cover will do, so long as you maintain your cover back home.


For the Canadian case, if you are resident outside Canada for 183 days annually and satisfy a few other conditions, then you can live tax free. The downside is that you can’t be on your provincial medical plan back home, and it takes 3 months to enroll again after returning permanently. Until you are back on the roster, you could be paying thousands of dollars per day for a hospital bed in Canada. Canadian hospitals charge American pricing to non-resident Canadians and foreigners. So if you are still paying Canadian taxes and a resident, you can buy a “Snowbird” travel policy. If you are not, then you need medical insurance. The British case is similar in that a few years ago the National Health Service changed the rules regarding residency. If you are not “ordinarily resident” in the UK, then you’re not entitled to free NHS treatment and you’re going to pay high prices unless you have expat medical cover.


Questions are welcome, please contact us at

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Admitted Health Insurance?

By Alex Routh


Almost all insurance policies are admitted. That means companies are licensed and registered in the place where they sell policies. For example, if you buy car insurance for a Mexican car, you would have to buy it from a Mexican car insurer. You couldn’t buy it from an American provider.


Almost all health insurance policies are admitted as well. In Mexico you could buy one from a local broker. If you were living in the USA, insurers are admitted in every State, which is why Blue Cross for example, is separately incorporated in almost all States. Every State has laws prohibiting non-admitted outside insurers, selling to their residents. Indeed, the USA for insurance purposes is like 50 separate countries. US medical insurers, in order to prevent other State regulators from fining them, have rules limiting your cover if you are not resident in that home State for 6 months per year. If they limit cover in this way, then they can make the argument to other State regulators that they are not insuring people in other States, and thus avoid million dollar fines and regulatory scrutiny.


So between countries and US States, there are barriers to portability of insurance policies caused by regulation and sovereignty. This can be avoided in the case of a car since you can import the car, and license it in the new country, or sell the one car and buy a new one if you move. For health insurance, when you live in two jurisdictions like Mexico and the USA, or live in one and want to return for medical treatment to the other, things become difficult. A Mexican policy would not let you return to the USA for treatment and force you to buy travel insurance when on a trip home. The catch is you generally can’t buy travel insurance to travel in your home country! US domestic policies restrict your time in other jurisdictions, have residency requirements, or limit the benefits abroad and are expensive! What can you do?


You can consider an international non-admitted health insurance policy. There are about 30 products, mostly British, but about 5 specialty American providers. The big names Blue Cross and Aetna, are generally only interested in group plans for American employee groups abroad. The US industry for individuals got its start insuring tens of thousands of missionaries. Every church sponsors 2 or 3 missionaries which makes a lot of bodies needing international medical insurance. On the back of this missionary business there are good inexpensive solutions allowing you full cover in Mexico (or anywhere you want) and return access for treatment to US hospitals. For the American providers the catch is you must have a residential address outside if the USA and you must live outside of the USA for 6 months per year cumulatively. So you can have international portable health insurance and the best of both worlds.


Cabo residents should consider one of these policies not only because they are cheaper than a domestic US policy, but because they are really international and allow you to live outside the USA. If you have any questions e-mail us at




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Underwriting Pre-existing Medical Conditions

By Alex Routh


Pre-existing medical conditions are always problematic for people wanting medical insurance. Just like buying car insurance, you have to buy the car insurance before you have the car accident, otherwise nobody would buy car insurance before they had an crash! There are 2 methods of underwriting and approaching this problem that medical insurers adopt. They are called full medical underwriting (FMU), and moratorium underwriting (MU).


FMU is what all American expat underwriters I’m familiar with use to accept candidates into an insurance program. You must answer an exhaustive list of medical questions on the application, and if you have any condition likely to recur, you’re quickly rejected. They say they will accept pre-existing conditions after 2 years, but the reality is that they won’t let you in the door if you have had anything serious in the past. Generally, they will take people with well controlled hypertension. You can always try to see if you’ll be accepted, and this won’t go on the record in the USA where insurers register people declined for medical insurance in the past.


You would think that they might write exclusions on a policy and accept you for every other potential unrelated problem or accident that might come up, but they won’t do that either. The reason is the litigation system in the USA promotes legions of ambulance chasing contingency lawyers suing everybody and anybody especially individuals and corporations with deep pockets. In every other G-7 country, if you start litigation and lose, the judge will award costs to the defendant. That makes you think twice before you start an action having little merit. In the USA you can start any number of suits and walk away with no consequence for losing. In many US cases, out of court settlements end disputes simply because the cost of defending is greater than the potential award, so the defendant makes a business decision and pays the plaintiff to go away. US insurers are afraid to cover pre-existing conditions as this opens the door to litigation where there might be a dispute about covering related medical condition they will probably lose, whether this is just or not. The consequence is that you as an expat with a pre-existing medical condition can’t get cover from a US provider.


The Moratorium method of underwriting is more of a British approach. The Moratorium period on pre-existing conditions is for the first 2 years of the policy, and applies to pre-existing conditions present in the 2 years prior to joining. Anything you knew about, were symptomatic, taking medication, or had a consultation for is not covered for the first two years of the policy. After the renewing for the 3rd year, you may be covered for that pre-existing condition after two clear years, as they will deem it to be a new condition again. There are two versions of MU, what I call hard and soft. Hard MU is where they write exclusions on the policy and you have to petition later for this to be removed. Soft MU is where they don’t do that. In cases of soft MU, I’ve had clients try to claim for a pre-ex during the first two years, and had their policy certificate re-issued with the exclusion written on the document so there’s no ambiguity.


The advantage of MU is you can get insurance coverage. Most people understand they can’t be covered for pre-existing conditions, and are only happy to get cover for everything else. There is also the chance that you can be covered for your pre-existing condition after the moratorium period expires. Realistically, if you have a chronic condition then it will never be covered, as you will never have 2 clear years. Disputes under the British system are referred to an arbitrator before legal action commences, and there is a government insurance ombudsman who will take action on your behalf if you are treated unfairly. I’ve never heard a complaint about the system in the UK, and it seems to work well and private UK insurers don’t nearly have the rejection rate US ones do. Can any country having half the number of lawyers the US has per capita, be that bad??


The bad thing about UK expat insurance policies is that they generally won’t cover you for return treatment in the USA, or do it in a limited way, and if you choose that option are very expensive. If you are happy with the best hospital in Mexico or Switzerland, or anywhere else, then these policies should be good enough for you. Anybody can apply for a British style plan, you don’t have to be British. For older people they have more attractive options for lifetime cover as well.


If you have any questions about the above, please contact us at We exclusively specialize in the expat medical insurance market.

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SCUBA Diving and Insurance


Scuba diving with compressed air is something that many people do when they are on holiday and Cabo Pulmo has the only coral reef on the Baja Peninsula. I dove there in December and it is worth a visit. The unique feature I saw there missing from many reefs around the world was the abundance of big game fish. In many places the big fish have been killed off by spear fishermen. I’ve been diving in Saipan, Guam, Malaysia, Thailand, Okinawa, Hawaii, Cebu, Palawan, Cyprus, Bahamas etc. so I should know! Another thing is you can swim with thousand pound Sea Lions which is quite the adventure. Just beware that they defecate frequently and it is like an underwater brown bomb going off and you will find yourself in a poop cloud! Don’t open your mouth in surprise!


You have to check carefully to see if your travel or medical insurance policy covers recreational scuba. If it does then there is usually a requirement to be accompanied by a Dive Master (a professional guide) when you dive. If you stay above 33 feet, you cannot get the bends and the only bad thing that can happen is if you ascend while holding your breath. If you go deeper for longer, then nitrogen which is 80% of the air you breathe, will dissolve in your blood. If you dive deeper and stay down too long and your blood becomes saturated with nitrogen and then ascend too fast, nitrogen bubbles will pop out in your blood stream like carbonated soda pop when you take the cap off the bottle. This can have horrible permanent consequences if one of these bubbles pops out in your brain not unlike a stroke. It is called the bends because the bubbles congregate in your joints and it is painful to move so you are literally all bent up.


The idea behind the Dive Master insurance requirement is that he will monitor your dive times and depths, to ensure safety. Some insurance policies have a limit of about 90 feet which is about the safe limit of sport diving. You can spend half an hour at that depth without having to worry about saturation problems according to the dive tables.


Let me emphasize that scuba diving is a very safe sport! My analogy is that scuba is like being on the edge of a cliff; it is very safe so long as you don’t step off into space and fall. With diving however, we know that there is a cliff in terms of time and depth, but we can’t see it. I was diving on a car freighter that ran aground on the West Coast of Vancouver Island and sunk bow up at about 30 feet. It was almost standing up on its stern as the bottom had such a steep incline. By the time you got to 90 feet past the deck cranes you were in front of the wheel house with an open hatch to the bridge. The water was very clear and I wanted to go through that hatch and explore, but my 30 minutes was up and if I wanted to stay within safe limits I could not go deeper. I did not step off that cliff, but it occurred to me that if I wasn’t watching my time and depth, I could have easily done so inadvertently given that the water was so clear and I was not with a guide. So you can see why insurers sometimes insist on a professional guide. Realistically, any dive you do as a tourist you want to be guided by a Dive Master anyway because they take you on a tour to all of the good spots on the dive site be it a wreck or a reef with their local knowledge.


There is one specialty travel insurance policy called “DAN” which is an acronym for Divers Alert Network that offers cover for dive tourists. This policy has limitations that many people are unaware of. For example, it covers diving accidents up to $250,000 but only covers other accidents up to a very small limit of $10,000. Also, they have a limitation that it only covers you if you are diving 100 or more km from your home. So for the dive master that was using it as his international medical insurance in Malaysia, you’re not covered for diving there as your home is not Germany but now Malaysia since you live and work there. For a sail boat cruiser that was using it as his international medical insurance policy, $10,000 is a drop in the bucket for non diving related accidents and it only covers for accidents, nothing else. It is meant for dive tourism so please use it as such and it will certainly be an adequate supplement to your travel or medical insurance if those don’t cover scuba.

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The U.S. Department of State Advises…

More and more older U.S. citizens are traveling abroad. The U.S. Department of State’s website has a lot of useful information for older citizens moving or just traveling abroad. If you are planning on relocating overseas, you might want to review their webpage on retiring abroad. Here is a list of things that is recommended that you think about prior to your travels:


Travel Documents

For less stress it is best to apply for your passport at least three months before you travel.  If you already have one, make sure to check the expiration date; check as well the visa and documentation requirements, if any, for the country you will be visiting.  Some countries ask that passports be valid for six months after your trip ends. This information can be found in the Country Specific Information pages of the U.S. Department of State’s website.

Stay Connected

The U.S. Department of State offers the option of the the Smart Traveler Enrollment Program, where you can enroll your emergency contact information. This allow’s the Department of State, U.S. embassy, or U.S. consulate to contact you, your family, or your friends in an emergency according to your wishes.

Health Information

Health care is one of the highest concerns for many older U.S. citizens who are planning relocating abroad. It’s a good idea to consult with your doctor before your travels to identify your healthcare needs at your destination.  Take time to research the environmental conditions at your overseas destination that might contribute to your specific health concerns, especially if you are sensitive to altitude, air pollution, humidity, or other conditions. Also check availability and standards of health care in that area.  For more tips related to health issues, visit the U.S. Department of State’s website.  You may also find health information at the Travelers’ Health page of the Centers for Disease Control and Prevention (CDC) website.

Medical Insurance Beyond Medicare

Medicare, the U.S. government health plan for people aged 65 years and older, does NOT cover health care overseas. It is highly recommend that you obtain health insurance to cover emergency medical and dental treatment and for medical evacuation to the United States.  Many companies offer short-term and long-term health and emergency assistance policies to cover healthcare expenses incurred overseas, including emergency services such as medical evacuations, it’s up to you to choose the right one for your personal needs at the best price.

Pharmacies and Medications

Be sure to include an ample supply of your prescription medication for your trip, and don’t forget to adjust your medication schedule as you cross time zones.  Having a letter from your doctor describing your conditions and the medication you require will help avoid questions or delays at customs or immigration. Keep medications in their original and labeled containers.  Consider asking your physician and pharmacist for the generic or chemical name of your medication just in case; pharmacists and physicians abroad are more likely to recognize it with this name. Check with the embassy or consulate of the country you plan to visit to make sure that your medications are not considered illegal substances under their local laws.

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Insurance Ombudsman


The UK Insurance Ombudsman was created in 2001 by the Financial Services Act in order to settle disputes between insurers and clients. Other countries like Australia and New Zealand also have Insurance Ombudsman offices.

The types of disputes that come up most often in the UK related to Travel/ International Health insurance policies were where the client either didn’t understand an exclusion or was unaware of it, or there were limits in a policy that were either not understood, emphasized by the insurer, or not plainly disclosed.

The Ombudsman will look at how the policy was sold and determine the information disclosed to the consumer, and ensure that the information was available. One situation was a case were a trip and flights had to be cancelled and the consumer lost money and was told by the agent/ insurer that trip cancellation of flights and travel was covered by the policy. What wasn’t disclosed was that there was an arbitrary low limit on this benefit of $2000 and the loss was $6000. The Ombudsman ruled that this fact was probably not plainly disclosed by the insurer, and they ruled in his favour. The insurer paid!

Isn’t it nice as a consumer to know that you have a powerful advocate on your side that can overrule the very occasional, sometimes arbitrary decisions that insurers make to deny or limit a claim. With a UK governed policy you don’t have to hire a lawyer to get someone to review decisions with the power to force an insurer to pay. If you are unhappy with any decision of the Ombudsman there is another level of redress you can seek though another functionary; the Independent Assessor.

The UK Ombudsman in the case of travel insurance rules 45% of the time in favour of the consumer in travel insurance disputes. In general their findings are 58% in favour of consumers. 90% of all cases were settled informally after the intervention of the Ombudsman.

IMG Europe is governed by the Financial Conduct Authority and their Travel and International Health insurance claim settlement decisions are subject to review by the Ombudsman in the event you choose to dispute anything.

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International Health Insurance Fatal Flaws

How would you feel if you bought a medical insurance policy and two years later you were diagnosed with bowl cancer and they denied the clam?

The medical director of the insurer sent you a letter saying that “After reverse extrapolating the growth of the tumor, it started growing a few months before inception of the policy with medical certainty and there for this a pre-existing condition and not covered. We fully realize you were asymptomatic and there was no way of you knowing it existed or could have been diagnosed with this condition.”

I would feel terrible and cheated as insured and as the broker that sold the policy I would not be able to sleep at night until I found an alternative so this could never happen again. Insurance above and beyond the contract is supposed to be governed by the utmost of good faith between all parties to the contract. I believe this decision was a violation of good faith.


There is a great book by Simon Winchester called “A Crack in the Edge of the World” about the San Francisco Earthquake. All those people that bought earthquake insurance were denied because it might have been the fire in the aftermath that caused the destruction, or it was because they had fire insurance and the earthquake caused the fire. All American insurers found a way to weasel out of paying claims. The one British Insurer involved in this market sent a famous one word telegram to his claims adjustors: “Pay all claims!” This was prescience as for the next decades he justifiably cornered the market in property insurance in the USA. Consumers rewarded that Good faith!!!

You should check the policy wordings on pre-­‐existing conditions so you don’t get caught. If they say that they don’t cover pre-­‐existing conditions including the ones you don’t know about or couldn’t know about then choose policies that less restrictive and reward those insurers that will apparently act in good faith right from the contract.

What policies do have fair pre-­‐existing conditions policy wording? There are only two that we can recommend right now for expats in Mexico, IMG Europe and Morgan White. If you consider these policies the cancer scenario as above won’t happen to you and you won’t pay more.

Protexcare has you covered, contact us today for a personalized quotation!