A study in covers

If you’re planning higher education abroad, take a medical cover from India. It’s cheaper and offers more benefits.

Tanvi Varma/Money Today        Print Edition: July, 24 2008

Durga Jaiswal
Durga Jaiswal, 27

Studied communication design in Australia

• Bought a health-cum-travel insurance in India

• Supplemented it with another health insurance policy in Australia

• “I bought health insurance because I was aware that medical facilities are expensive abroad”

Click here to see graphic: Student medical insurance

When Ketan Patel, a student in Ohio, US, went for a stroll in the snow, he didn’t know it was going to be one of the most expensive walks for him. Patel slipped, broke his ankle, and ended up with a medical bill of over $20,000 (Rs 8.6 lakh). Fortunately for Patel, he was covered under a student’s medical insurance plan which would have reimbursed his medical expenses up to $100,000 (Rs 43.2 lakh), besides offering a host of other benefits. So even as Patel flew to India for treatment and stayed for 76 days before flying back to Ohio, all of it, including the return airfare, was covered by the plan. It cost him Rs 2 lakh, but Patel paid only Rs 11,730—the premium for his insurance.

It’s a fact that medical insurance is mandatory for students going to the US, Australia, Canada and New Zealand, the favoured destinations for studies. But it is well worth it. Most students begin planning and saving for their studies abroad many years in advance. Any increase in cost due to medical expenses can strain the budget, says Rahul Aggarwal, CEO, click2insure.com.in. Which is why overseas medical insurance is crucial. “It caters to medical and other exigencies that a student might face abroad, especially when the expenses overseas are three times as high as in India,” says Shreeraj Deshpande, head, travel insurance, Bajaj Allianz General Insurance. In fact, medical costs could be up to 10 times higher, depending on the nature of illness or exigency and the medical price index of the country.

Over 50% of the nearly 1 lakh students who go abroad every year buy their insurance in India. This, says Deshpande, is largely because of the low pricing, benefits offered and convenience in processing. Indian policies offer a blend of medical as well as non-medical covers, including expenses in case of hospitalisation, loss of baggage, loss of passport and personal accident.

These policies typically cost less than Rs 16,000 for coverage of up to $100,000 for one year; onethird the amount you would pay if you bought your policy in the US or the UK. “Compared with the US university plan rate of an equivalent of Rs 40,000-45,000, our plan costs about Rs 15,000,” says Anuj Gulati, director (services & business development), ICICI Lombard.

Although overseas universities offer medical covers through their tie-ups with local firms, several benefits like loss of passport/baggage, bail bond and other legal liabilities are not covered. Most foreign universities waive off on-campus health insurance if you have comparable domestic insurance policies. However, as Gulati says, some ask for compulsory covers like treatment for mental and nervous disorders, including alcoholism and drug dependency. So, check with your college on the additional coverage required.

Once you have the university’s approval to take a cover in India, compare the coverage offered by various policies rather than simply opting for the cheapest one. For instance, if you are prone to dental problems, it may serve you better to pay a little extra premium and take a policy that includes a dental cover rather than footing a bill of $300 (Rs 12,970) for a filling. Similarly, a higher coverage for sponsor protection may be important for you if you are being funded by a sponsor. “Important covers that are frequently taken include medical expenses, medical evacuation cost, dental treatment, checked-in baggage loss, compassionate visit and personal accident,” says Aggarwal.

Unlike typical policies where the coverage is extended only for one year keeping in mind the duration of a student’s stay abroad, the medical insurance is available for a continuous period of two years. These policies can also be bought online if the student has no major illnesses and requires no medical check-up.

Although all private insurers have tie-ups with hospitals abroad, the process of treatment and payment could be cumbersome. You still have to give advance intimation to the insurer to make arrangements for a cashless claim. Opting for the reimbursement facility will leave you cash-strapped for more than 30 days. Also, finding a network hospital and physicians, and running after the insurer to authorise your claims will simply worsen the agony. Nevertheless, the benefits extended by these policies are imperative and mandatory in most cases.

So before you board that flight, make sure you have a medical policy that suits you.

What to keep in mind when taking a student medical plan

• Decide how much medical cover you need based on the medical price index of the country you plan to visit

• Compare the coverage offered by insurers rather than opting for the cheapest plan. For instance, you may also need sponsor insurance

• Find out whether the coverage offered by the company fulfils the criteria set by your university or college

• Select an insurance company which is a recognised player abroad and has tie-ups with local insurance firms in the destination country

• Look up claims settlement record of the insurance company, see if it offers cashless facilities and read up the exclusion clauses

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