Going abroad? Buy health insurance first

In 2005, Simran Jagdev was all set to go to the UK to pursue a Masters in Finance Investment at the University of Nottingham. Like all other students going abroad, she had to buy a health insurance policy.

Jagdev played smart and opted for a student medical cover in India itself from ICICI Lombard. Apart from offering medical cover up to $100,000, the policy took care of eight non-medical risks, including personal liability, luggage damage, passport loss, bail bond, and a visit by her mother from India in case she is hospitalised.

For all this, Jagdev paid an annual  premium of Rs 7,617."The policy covers all important situations in which one might need insurance," she says.

Jagdev is just one of the lakhs of Indian students at universities abroad. And universities, particularly in the Schengen (15 countries in Europe), the UK, the US and Australia, insist that students get medical insurance, either at home or abroad.

n the UK, for instance, the National Health Service provides limited cover but does not cover hospitalisation expenses; the student's insurance has to take care of that. Jagdev recommends taking the policy in India, where the premium works out cheaper, "It is not practical to go abroad to study without an insurance policy," she says."Insurance is one of the most important criteria for the Schengen visa, and thankfully I bought it in India."

The cost factor

Students can choose to insure themselves either in India or abroad. Student insurance policies cost $500-900 per year in the US, and around Australian $400 in case of Australia. The amount can change depending on the university. The cheapest worldwide cover offered by Indian insurers is $168-234 and the most expensive is $355-575 per year.

The insurance policies offered by universities abroad provide only medical cover; non-medical risks are not insured. Which is why most students prefer to buy cover in India itself. However, some universities insist that students take insurance policies from them and do not accept policies taken in the home country.

But, adds Sudhir Menon, head, travel insurance and worksite marketing, ICICI Lombard, "Universities in the US grant students a waiver from their medical insurance policies if the policy that the student buys is comparable to theirs."

Why buy insurance?

Students, especially from India and other developing countries, invariably have a hand-to-mouth existence thanks to an unfavourable exchange rate. And medical treatment in most western countries is very expensive, often several times over what the same treatment would cost in India.

That's something Mohit Garg, 23, found out the hard way. Garg left for the US in 2005 to study structural engineering at the University of Florida. A viral infection affected his foot and he had to be operated upon to remove the infected part. What would have cost him a couple of thousand rupees in India cost him over Rs 22,000 in the US. Thankfully Garg had medical cover, so his bills were taken care of by ICICI Lombard.

Student travel health insurance policies offered by Indian insurers cover the risks right from when the student boards the flight out of India. Hospitalisation expenses are paid even if the insured falls sick and has to be hospitalised in some country while on his way to the destination-country.

What is covered?

Apart from paying out-patient medical expenses and hospitalisation charges of $50,000-250,000 depending on the policy, Tata AIG offers to bear your nearest family member's round ticket cost, if you are hospitalised for more than seven consecutive days. Bajaj Allianz offers to pay the costs of most direct flights for the same. Tata AIG also offers to bear the cost of the student's flight to India if a close relative is hospitalised back home.

Many insurers offer a bail bond of $5,000 if the student gets into trouble with the law. Others offer to reimburse tuition fees paid in advance if studies are interrupted due to medical or compassionate reasons. These policies also provide sponsor protection benefit.

Since for most Indian students their parents are the sponsors, the tuition fee is fully or partly contributed by them. Insurers are offering to reimburse the remaining tuition fee in case of death or permanent disability of the sponsor, to the extent of $10,000, so that the student can continue with the course.

Apart from this, insurers are offering to take on students' liability risks, and pay up to $100,000 for any unintentional damage caused by the student to either private or public property. TATA AIG Student Guard has gone a step further, and offers to cover felonious assault, where the insurer will reimburse the loss or damage done to a student's property in case of attacks based on racial discrimination or for any other reason.

All these benefits will continue to apply even when the student leaves the university to travel to any other country on holiday.

The flip side

It's not all about low premiums and unlimited cover. Students say the biggest problem with Indian insurers is the tedious process of making a claim. Even though insurance companies say making a claim is as simple as informing the third party administrator in the host country to make cashless claims, policyholders say in reality it's different.

Garg, who claimed for his foot treatment, had to pay all the bills upfront and then courier the bills back to ICICI Lombard in India. He says, "Even though they made the reimbursements after I filed all the bills, as a student it was very difficult to pay all the bills upfront in dollars and then file a claim."

Insurers, however, say that they can do little if the policyholder does not give them advance notice about claims. Menon says, "If the policyholder informs us about their hospitalisation in advance, we will make necessary arrangements with the hospital concerned so that we can make it a cashless claim." If, however, the student does not give advance notice, it will take a while to settle the claim. So, the onus is on the student.

Whether you opt to pay your bills and claim afterwards or go cashless; whether you buy cover in India or abroad; whether you opt for pure medical insurance or for all the add-ons, the bottomline is that if you are a student going abroad, insurance is almost as important as a visa. So look around to find a policy that suits your needs, before you take that flight out.