What are the factors that affect visitors insurance premiums? People shopping for visitors insurance have a wide variety of choices, as there are many products available in the market today, with many agents and internet web sites offering the same kind of products. Therefore, prospective consumers often wonder how the visitors insurance premium is determined and why they have to pay a different amount than what their friend paid for their parents.
Factors That do NOT Affect Premium
First and foremost, a factor that does not affect the premium is the place you purchase the insurance. No matter where you purchase visitors medical insurance from, for the exact same product, the prices are always going to be the same. They will not vary based on the agent, web site, or if directly from the insurance company because insurance prices are heavily regulated by law and it is not legal to offer a different price for the exact same insurance.
That allows you to focus on the benefits of the insurance and service of the seller, rather than your skills to bargain.
Factors That Affect Premium
There are many factors that affect the premium for visitors health insurance, as listed below:
There are primarily two types of visitors insurance plans:
Fixed Coverage: Pays a fixed amount for each and every procedure and you pay the difference entirely out of your pocket. These are low cost plans.
Comprehensive Coverage: Pays in terms of percentage and limits your out of pocket expenses. Such plans cost more.
Various products from different insurance companies have different costs, even if all other factors are the same.
In general, health conditions of an older person are not as good as that of a much younger person. It is definitely possible that some older people are much healthier than some younger people. But as the visitors insurance plans are not medically underwritten, premiums are higher for older age. They have to look at overall average health condition of a particular age group to determine the premium.
Most visitors insurance plans charge the premium on a per day basis. Therefore, you pay only for the exact number of days you are traveling. Of course, premium for 6 months of insurance would naturally be higher than the premium for a weeklong trip. Because of daily premium, premium for 31 days would be higher than premium for just 30 days. Even if someone is renewing the insurance on a monthly basis, and if the insurance charges based on number of days, your premium every month may fluctuate due to number of days in a given month.
Policy maximum is the maximum amount the insurance company pays in case of an eligible expense. As you choose a higher policy maximum, you will pay a higher premium.
A deductible is the amount to be paid by you before the insurance company starts paying for eligible expenses. As you choose a higher deductible, you will pay a lower premium. Alternatively, as you choose a lower deductible, you will pay a higher premium.
Some insurance plans charge higher premiums to non-U.S. citizens compared to U.S. citizens because the plans for non-U.S. citizens would typically include coverage in the U.S. where medical costs are the highest in the world.
If you choose coverage including the USA, you will have to pay a higher premium compared to if you choose coverage excluding the USA. Of course, if any part of your trip includes the U.S., you will have to choose coverage including the USA.
There is typically no difference in premium between coverage areas of 'USA Only', 'USA and During Travel', and 'International Including USA' because the medical costs in the U.S. is the highest in the world. Therefore, as long as the U.S. coverage is included, you are already paying the higher premium.
Some insurance plans provide free coverage for a dependent child under the age of 9 years for every parent insured. Therefore, it would be advisable to choose such an insurance plan for a family with young, dependent children traveling together. Such plans are called "family friendly plans."
Pre-Existing Conditions: Most visitors insurance plans that provide coverage for acute onset of pre-existing conditions provide such coverage at no additional cost. However, some plans may charge a higher amount for limited pre-existing conditions coverage.
Hazardous Sports: If you are planning to participate in hazardous sports during your trip such as jet skiing, scuba diving, bungee jumping, snow skiing etc., those are typically excluded from the base policy and you will have to pay extra to purchase coverage for such hazardous sports activities. As each policy covers and excludes different activities, and their additional premium may be different, please make sure to check various policies with respect to the specific activities you will be doing.
Other: Some policies provide optional coverages for higher loss of checked luggage coverage or to increase accidental death & dismemberment amounts.