Navigator: Medical Insurance

The idea of International Medical Insurance /Private medical Insurance traces its origins back to 1972, when a Danish sea pilot from Mauritius wrote to the Danish insurer: Sygeforsikringen “danmark” (the mutual health insurance “danmark”) complaining that recent legislative changes in Denmark meant that overseas health insurance was unavailable to expatriate Danes.

Sygeforsikringen “danmark” began then to provide international medical care to Danes, and later Scandinavians, living abroad and towards the end of the 1970’s began to provide international health insurance to other nationalities.

In August 1979, International Health Insurance (IHI) danmark a/s was founded in order to specialize in this growing market of expatriates abroad. IHI’s vision was far reaching and non discriminatory. It offered medical insurance to any one who applied (outside the US) and it permitted anyone to continue cover once they returned ‘home’. It also provided insurance to local nationals and guaranteed renewal.

Other companies soon joined in to compete, but generally preferred to compete on price, rather than the IHI hallmark, which was service.

Few were as brave as IHI to offer continued cover if you returned home to live. Few apart from those with a connection to Lloyds of London would offer cover to local nationals, preferring not to be seen as taking away business from the local markets.

Unlike IHI, few competitors envisaged needing to care for someone’s health beyond retirement and among their clients, few clients took the time to review the possible costs of healthcare in their older age.

Cigna in the US was one of the first to actively enter the expatriate group market overseas.

Long established insurers were generally slow to move into the area of international medical insurance and so we have seen the rise of managing agencies, companies that do the marketing, selling, underwriting and claims handling on behalf of an insurer. William Russell from the UK was one of the first managing agents to emerge.

With a growing requirement for insurers to ‘know their clients’, it remains to be seen how well the managing agents can argue their dealings on behalf of their principals are done with full transparency.

The typical Hong Kong health plan is riddled with limitations which mean the customer is never quite sure what he can and can not claim.

Insurers justified taking this approach as they argued the limits were in place to discilpine the doctors, as their is no mandatory scale of medical fees in Hong Kong.

When owners and directors of local firms began to encounter these limits in practice, there emerged a demand or higher levels of cover, such as you see in the BUPA Crystal and Bupa Gold plans.

Bupa is probably the largest specialist provider of medical insurance in Hong Kong and its competititors are typically agency driven life companies like AIA, Manulife, Prudential, FWD, AXA and so on or general insurance companies like Liberty, Blue Cross, Tokio Marine, MSIG and so on.

The strategy of the life companies is, it seems, to use the health plan as a door opener to savings plans to help fund the life cover in later years..Such companies do not generally guarantee renewal, nor to they make any promises that the amount you save with them will be sufficient to cover future premiums.

The typical Hong Kong individual plan will be bought on price and emphasise reimbursement of routine smaller bills.

In a bid to perhaps discipline the medical profession, the typical Hong Kong plan will be riddled with limitations and caps that make it especially difficult with a hospital claim where you will find it hard to be sure as to exactly what you can claim.

Part of the problem in Hong Kong is that the medical profession is a powerful lobby that will pressure the government to restrict entry of foreign doctors, in part by requiring them to sit added qualifying exams and in part by possibly arguing Hong Kong already has ‘enough’ doctors.

Another part of the problem is that the scale of fees set down by the HK Medical Association is a non binding guide. So if the removal of a skin cancer for example is regarded as a minor operation with a cap of HKD5,000 in the policy, but the doctor charges HKD50,000 for his time and skill, then you will be forced to pay the difference.

The Bupacare and Bupa Healthnet are good examples of local individual and group policies.

Short Term health insurance offers you just the kind of flexible, fast coverage you need for those dynamic times of change in your life.

Short-term medical insurance is not guaranteed-issue and is a temporary health insurance plan designed for people who are without health insurance and are waiting for longer term, major medical insurance coverage.

Short Term health insurance plans do not meet the minimum essential coverage requirements under the Affordable Care Act (ACA), also known as Obamacare, and may result in a tax penalty. They are designed solely to provide temporary health care insurance during unexpected coverage gaps.

With Short Term health insurance, you are not buying an ACA health plan. That means you need to keep a few things in mind as you plan your purchase:

• ACA health plans are guaranteed issue, meaning you cannot be denied coverage based on pre-existing conditions
• Short Term insurance plans are not guaranteed issue, do not cover pre-existing conditions, and you must answer a series of medical questions to apply for coverage
• ACA health plans are required to cover 10 essential health benefits, including maternity and new-born care, mental health and substance abuse disorder services
• Short Term insurance plans do not have coverage requirements, so plans vary in what they cover. Check your plan details carefully.

Universal Life Insurance

Universal life insurance (often shortened to UL) is a type of permanent whole of life insurance, where the excess of premium payments above the current cost of insurance is credited to the cash value of the policy.

Essentially the more you pay for a given amount of life cover, the greater will be the accumulated cash value.

This product initially gained popularity in the US in the 1970’s in response to consumer objections over the fact that a traditional life insuarance policy did not reveal the allocation of premium between the costs of life cover and savings!

Features of a typical UL policy are as follow:

• Flexibile Premiums
• Flexibile benefits
• An “unbundled” pricing structure; and
• A facility to accumulate a cash value. 

Flexible Premiums:

Subject to certain limits, the policyowner may pay more or less than the premium stated in a given year, after the first year. At his option, he can even omit premium payment for a particular year (again subject to certain conditions). Of course, the amounts of coverage and cash value depend on how much premium is paid. 

Flexible Benefits:

Subject to certain limits, the death benefit purchased may be increased or decreased, although proof of insurability may be required for an increase in benefit. The Death Benfit will be the face amount plus the cash value, or the face amount only.

“Unbundled” Also known as ‘split dollar’ pricing:

With UL policies he insurer separates and individually discloses, both in the policy and in an annual report

1. the pure cost of protection (covering the death risk adn any health or occupation loadings); 
2. interest; and 
3. expenses.

Cash value:

After the first premium payment, additional premiums (subject to an individual limit) can be paid at any time.

These, with interest earnings, are added to the cash value after the deduction of expense.

Call the helpful crew at Navigator 2530 2530 or drop us a line at cr**@na*****************.com for any help you’d like with landlord or any other form of insurance.