Quite possibly the most frequent question we got as we told people that we were planning on traveling the world for a year was what are you going to do about health care? I am not sure what sort of indictment this is of the current American health care system that people are compelled to ask about health insurance before our destinations and other much more interesting topics. Below we break out the major lessons we learned from going through the process of preparing to replace our employer supplied benefits. There are some important considerations to be made when planning your travels, and many of them require significant foresight and planning.
Health insurance can be one of the trickiest benefits to figure out. If you are used to the easy and relatively limited choices of employer provided plans, the shear number of choices out there can be daunting. Also there is the complexity of doing this as an American. If there is one thing we have learned in doing this it is that the cost of health insurance in the States is significantly higher and more complex than just about anywhere else on the globe. In fact the plan we went with that provides coverage within the States as well as global coverage is +132% more expensive than the equivalent plan that covers the entire globe ex-U.S. That is a pretty big premium for U.S. health care.
For health insurance on a global trip your first consideration should be ensuring your provider is an “admitted” plan. This is important for any Americans that may at some point need to return and apply for private health insurance. To cover any preexisting condition, you must have had “creditable coverage” with no gaps longer than 63 days from an “admitted” plan that is approved in the State you are likely to return to. While there are many variances state by state, this requirement holds true in Pennsylvania. Many popular global plans may not be admitted in the US, and that is fine for many non-American travelers, but getting a private plan when you return, and avoiding preexisting condition exclusions can depend on your provider while you are away. As was mentioned previously we decided to go with the HTH Worldwide Global Citizen Plan underwritten in Pennsylvania by HM Life Insurance Company of Pittsburgh, PA rated A- (Excellent) by A.M. Best. I would recommend talking with a licensed broker or a potential insurance provider about our options. www.ehealthinsurance.com is a great starting point.
Granted this is a bit of a morbid topic, but an important one and one we learned about by finding out we are “uninsurable”. Getting through life insurance underwriting with eminent world travel plans can be a struggle, if not impossible. Most insurance underwriters will require you to declare if you have plans to leave the country in the next 12 months. And if you lie about it the policy could be voided if it is needed, so telling the truth is the only option here. If you are planning a global trip and are more than 12 months from departure, think about getting a personal life insurance policy (term is probably adequate and most affordable). Even if you have employer provided life insurance, it is important to think about getting your own personal policy that is independent of your employer. Talk to a local insurance broker about pricing and options, but remember that if you are more than 12 months out no need to tell them about your travel plans, it will just complicate matters. This is especially important if you need full life insurance not just death and dismemberment. Full life insurance covers you if you die of natural causes, think heart attack or any illness, but death and dismemberment only covers you in the case of an accident, which is the most likely if you are young and healthy. If you do not have any kids or people that depend on your earning potential, that might be all you need. Good resources for death and dismemberment insurance include:
Disability insurance is a form of insurance that insures the beneficiary’s earned income against the risk that an accident resulting in a disability will make working (and therefore earning) impossible. It includes paid sick leave, short-term disability benefits, and long-term disability benefits.
The key topic for our discussion here is that most disability policies are a percentage (60-80%) of salary. As we now have no predictable, documentable salaries, insurance companies will not underwrite a private disability policy on us. As an American the only real option you have at this point, is to rely on Social Security benefits in the event that you become disabled. But take note that Social Security benefits do not begin for 5-6 months so be sure to have an emergency fund that can cover cost of living in the states for at least 6 months. Similar to private health care and life insurance securing these benefits through private policies before you leave your current employment is the best advice, this way they are in place before you actually need them, because if you wait until you need them they are very difficult, if not impossible to secure.
We welcome your comments or personal experiences on securing benefits, please share below.