Buying the wrong insurance for working holidays could cost you what may be the wonderful chance of your life to combine work with holiday overseas.
This came to light in enquiries and cases brought to the notice of the Consumer Council for assistance. Admittedly, complaints of such nature are rare, but they do drive home the message of the importance of buying the right insurance cover for working holidays.
Otherwise, not only is it a waste of money to procure inappropriate protection but also inadequate coverage could result in potential serious consequences should accident strike while abroad.
In one case, the complainant's application to Korea was rejected because the insurance policies she submitted were not suitable to meet the visa requirement under the country's Working Holiday Scheme - purportedly on grounds that repatriation was not included in the insurance cover.
Working Holiday Insurance is not the usual travel insurance for business or holiday travel, and can cover work place injuries and accidents. It is therefore a better choice for working holidays.
As a prerequisite for visa requirement for most schemes, the applicants are required to purchase a medical insurance with prescribed coverage in some cases valid for the entire period of stay in the country.
The Working Holiday Scheme allows young people aged 18 to 30 to stay in 9 hosting countries which have bilateral arrangement with the Hong Kong Government, usually up to 12 months (2 years for the UK) to take up short-term courses and employment. Austria will become the 10th hosting country with effect from March 2, 2015. Since 2001, some 46,000 people from Hong Kong have joined the Scheme.
The Council has collected 4 Working Holiday Insurance plans, a relatively new insurance product in the market, from 3 insurance companies, with annual premium ranging from US$238 (HK$1,856) to US$750 (HK$5,850). As with other insurance products, the Working Holiday insurance plans varied considerably in fees and scope of protection.
A major indispensable component of the insurance plans is the coverage on medical expenses and emergency assistance service including medical evacuation and repatriation.
The medical protection covered (in 3 plans), surgical and hospitalization expenses varying from US$100,000 (HK$780,000) to HK$1,200,000, including the necessary follow-up medical treatment reasonably incurred by the insured, within 30 days to 3 months, after his or her return to Hong Kong.
For emergency assistance, all 4 insurance plans provided coverage up to the maximum of US$100,000 (HK$780,000) to US$250,000 (HK$1,950,000) or placing no caps on the protection.
The means of medical evacuation may include air ambulance, surface ambulance or regular air transportation. The insurers will make all the decisions based solely upon medical necessity as to the means of transport and the final destination.
Another requirement of such insurance coverage concerns personal accident and liability. In the case of a personal accident resulting in the death or permanent total disablement which occurs within 90 days or 12 months after the date of the accident of the insured, the maximum payout varied from HK$300,000 to US$100,000 (HK$780,000).
In respect of personal liability, the coverage ranged from HK$1,500,000 to HK$2,000,000 - but no benefits will be provided to cover employer's liability, ownership, possession or use of vehicles, aircraft, or watercraft, etc.
In addition, consideration should also be given to the provision of compassionate death cash which can be paid, in the event of death to the next of kin of the deceased, ranging from US$2,000 (HK$15,600) to HK$20,000. Of the 3 plans with immediate cash relief benefit, 2 restricted the death of the insured to solely from sickness during the journey.
Consumers are advised to pay close attention to whether the insurance plans they purchase will provide adequate coverage for working holidays, particularly in respect of medical expenses, medical evacuation and repatriation which could be costly but essential.
Be wary that Working Holiday Insurance only covers legal employment, it is not uncommon that the insured may switch jobs, therefore it is important to ensure that they are employed in accordance with the local legislation.
Moreover, some types of work are excluded in some Working Holiday Insurance plans, for instance, engaging in a capacity of a professional athlete for sports or games, movie or TV filming crew, tour guide or escort, or being employed as driver of any kind of conveyance, diver, security guard or in casino, construction site or night club, etc.
Furthermore, consumers are advised not to rely solely on the presentation of insurance agents and be well aware of the requirements in detail for the working holiday visa applications, particularly the specific coverage that an insurance policy must possess before signing any agreement with the agents for any insurance plans.
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