Study Abroad: Insurance matters

Here is some good news for students going abroad. Medical insurance comes cheaper in India and sometimes, with better coverage. For instance, the premium of UniCare Life and Health Insurance Company (approved by Florida International University, USA), is Rs 75,000 a year ($1,794) for a sum assured of $200,000. A similar policy from an Indian insurance company would cost Rs 32,000 a year (including 12.32 per cent service tax), almost 65 per cent less.

The coverage is also similar. Under the policy of Unicare, $200,000 can be used for common illness, injuries, maternity benefits, mental health care and also a minimum of $25,000 for the patient to transported back to India. Both Tata AIG and ICICI Lombard offer maternity benefit (for termination of pregnancy), treatment of mental disorder, substance abuse (alcoholism and drug), cancer screening and mammography examinations.

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Additionally, ICICI Lombard offers cover for sports related injury in their Plus plan, an extension of the Gold and Bronze plans. Tata AIG offers two other services, relocation support (only for students covered for the entire year) where they help the student to open bank account in the new place and even give cover against terror attack or natural calamity.

Also, domestic policies cover a large number of additional things like a two-way visit by a person the student chooses, in case of emergency that foreign policies do not. If the sponsor expires, some policies even cover for the completing education (some universities even specify this condition) and financial claims against the insured, if there is no criminal case.

However, the Indian policies do not cover pre-existing diseases. ICICI Lombard's product only insures pre-existing life saving diseases. On the other hand, foreign insurance companies cover pre-existing disease after an initial period of between six and 12 months.

So despite similarity in tenets, the main reason for the cost difference, according to Indian insurance companies is because the cost of operations abroad is higher. "Foreign insurance companies have high costs of operation compared because of higher manpower and other costs leading to higher premiums," says Sudhir Menon, head, travel insurance at ICICI Lombard.

The claim ratio in medical insurance in the US is 100 per cent whereas in India, such policies come under travel insurance, where the claims ratio is as low as 10 per cent. A majority of the universities abroad accept insurance taken from India as long as the policy fulfils the guidelines from the university on the health insurance. To buy a plan from India, a student needs to fill in a waiver form.

However, some universities do not allow this. According to Khim Lok, office manager, international programmes and services at San Jose State University, students need to compulsorily buy health insurance from the university. Some like, Temple University, Philadelphia even include the insurance premium in the tuition bill. Even the Harvard University insists on a US-based insurer.

Some students even see the sense in buying insurance from abroad. Ashwni Warke, a post doctoral student with University of Georgia, says that buying a policy through the university is a better option. "In emergency, I don't have to call up and coordinate with my insurance company about the best options available," Warke said. She also opted for university-based insurance because she can freely participate in the university's health immunisation programmes and regular doctor's visit.

In countries besides the US, such as the UK and Australia, students are covered under the government's medical scheme. That is, the UK has a National Health Service that offers medical coverage to students free of charge. The Australian government charges for students medical insurance in the visa fees itself and provides the applicant coverage from Overseas Student Health Cover, a government body.

Since it takes about a month or two to kick-in, it is better if one buys a policy for that time period. "Students should need to take a bridge policy till they avail the cover from the country's health department," said Shreeraj Deshpande, AVP, Health Insurance, Bajaj Allianz.

And if a student is in medical trouble abroad, there is a toll free number that one has to call that will connect him to the International SOS organisation (when a policy is bought, the student is given a card that has the number of International SOS). Members from this organisation represent the Indian insurer. They visit the student to assess the requirements and also, make the final settlement.