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Insurance - Wikipedia
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a large, possibly devastating loss. The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated.
Within the European Union the European Health Insurance Card (EHIC) allows citizens to access emergency medical treatment for free in 27 countries.
Despite this there have been “hundreds” of cases over the last three years in which holidaymakers in Spain have been turned away from hospitals, charged or been asked to claim on their insurance for treatment which should have been free under the reciprocal agreement.
The European Commission in Brussels is now investigating these complaints. In one case reported by the BBC a Spanish debt collection agency tried to collect £54,000 from a British holiday maker for a month’s hospital stay.
You also need to think about the extra costs associated with being ill. You may need a new flight and additional accommodation if you have to stay in the country for longer.
International private medical insurance can provide access to private healthcare when you are living away from the UK. Healthcare provisions can vary considerably around the world and depending on your location public healthcare may not be available at all. An international health plan can provide cover for routine healthcare, emergencies, normal pregnancy, prescription drugs and even chronic conditions.
If you are living away from home and are unwell you would first contact your insurer. Quite often they can advise you regarding English speaking doctors in your area. They will then deal with the medical facility on your behalf providing a guarantee so that you will not be asked for a payment and can concentrate on getting well. The insurer then pays the bill directly.
As shown by the recent cases in Spain, it is important to consider the potential cost of healthcare in countries where you are not able to access public treatment. Even if you are able to access care under a reciprocal agreement those with private healthcare cover benefit from speedier diagnosis and treatment, the highest quality care and lower infection risks. Global health insurers are also able to help with arranging suitable medical treatment, which can be difficult to do alone in a foreign country.
If you would like any further information or advice on arranging international medical insurance visit our Private Health Insurance site or contact one of our advisers on 0208 432 7333.
Macmillan cancer support has recently announced that the number of cancer diagnoses has increased by one third in the last twenty years and that by 2020 half of Britons will get cancer during their lifetime. This is due to our life expectancy increasing.
Even though the number of people getting cancer is rising, due to advances in treatment and research, 4 out of 10 cancer sufferers will survive. This means that there will be a greater number of people living with cancer or having recovered from cancer than ever before. The figures show that there are 2 million cancer survivors in the UK today and this figure rises by more than 3% per year.
A recent report “Cured- but at what cost” looked at the long term consequences of cancer and the treatment of which there were many. For example women who have had breast cancer are twice as likely to get heart failure and men who have had prostate cancer are two and a half times more likely to get osteoporosis. In addition, 200,000 cancer survivors are left with pain often with nerve changes following cancer treatment.
Ciaran Devane of Macmillan said “The NHS will not be able to cope with the huge increase in demand for cancer services without a fundamental shift towards proper aftercare, without more care delivered in the community, and without engaging cancer patients in their own health.”
This programme allows cancer sufferers to receive ongoing support following treatment to enable them to manage their recovery. Bupa’s specialist oncology support team who will advise people how to cope living with cancer looking at physical factors, but also the social, financial and emotional aspects of living or recovering from cancer.
A serious illness insurance policy will pay out for a wider range of conditions but the level of payout depends on the severity of the condition and could range from 25-100%.
With many people looking forward to their summer holiday it is interesting to know that 24% of Brits travel abroad without any travel insurance and this figure is even higher for 15-24 year olds at 48%. This is a real concern as in 2011/2012 3,793 Brits were hospitalised abroad which works out as 10 per day.1
False sense of security
Research by ABTA and the FCO1 found that 16% of people felt that travel insurance was unnecessary as the UK government would foot the bill if they needed treatment abroad and 17% believed that the European Health Insurance Card made travel insurance surplus to requirements within the EU.
Reading the policy documentation
Even more concerning is that whilst 82% of young people surveyed said that they would engage in more risky activities whilst on holiday such as sky diving, quad biking or jet-skiing, only 45% checked that their insurance would cover such pursuits. Even older holiday makers don’t check the small print on their policy; 50% didn’t check that they were covered before engaging in adventurous activities.
With an increasing number of people buying insurance online it is important to stress that you should always read the documentation of any insurance policy to check what you are and are not covered for to avoid nasty and expensive surprises. The FCO reports1 that the average medical claim from holiday insurance is £914 but costs can be much higher. The average post office personal accident claim is for £7,500 and repatriation from some EU countries by air ambulance can cost £16,000 and would not be covered by the European Health Insurance Card.
Travel insurance can also cover you against theft of your passport or baggage. Nearly 30,000 British passports are stolen each year and with the increase in devices such as smart phones, Kindles and iPods being taken on holiday, the average tourist is a major target for theft. Petty crime is on the rise in EU countries with high levels of youth unemployment such as Spain, Greece, Portugal and Italy3.
Tourists need to keep their wits about them especially in crowded tourist hot-spots where pick pocketing is rife. They should also check that their travel insurance covers personal items, items stored in cars and the maximum cover per item.
1. FCO (2013) Travel Insurance Facts. Available from: www.gov.uk/government/uploads/system/uploads/attachment_data/file/206692/Insurance_Infographic_v5.pdf
2. FCO (2012)Know Before You Go. Available from: abta.com/news-and-views/press-zone/brits-unaware-of-medical-costs-abroad
3. Hunter (2013) Tourists warned on travel insurance as European crime soars. Available from: www.telegraph.co.uk/finance/personalfinance/insurance/10115060/Tourists-warned-on-travel-insurance-as-European-crime-soars.html
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