Overseas Study Insurance Benefits and Protection Scope Vary Hugely “Infectious Disease” Protection Subjects to Definitions and Policy

14 May 2020
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Overseas Study Insurance Benefits and Protection Scope Vary Hugely   “Infectious Disease” Protection Subjects to Definitions and Policy

For parents who have sent their sons and daughters abroad for study, their primary concern is whether the best medical treatment and care are available in the soonest manner when their beloved children get sick or are involved in an accident. In particular, parents are concerned with the benefits that overseas study insurance plans can provide against the backdrop of the recent global COVID-19 pandemic. The Consumer Council reviewed 12 overseas study insurance plans offered by 10 insurance companies. Results showed that not only did insurance premiums and benefit amounts varied greatly across plans, but also their claims conditions and limitations as stated in the policy. Prospective policyholders should read into the policy details to see whether sickness, body injuries, and other losses that are caused by specific incidents or conditions are covered. Before signing up an insurance plan, consumers should clarify their questions with the insurer to avoid any dispute when making claims. 

Taking the one-year global coverage (including the US/Canada region) as an example, insurance premiums varied hugely across the 12 plans, ranging from the lowest HKD $1,800 to the highest USD $1,109. As for the areas of protection, the scope was broad and the benefit amounts range was wide, spreading across medical expenses, hospitalization cash allowance, personal accidents, kidnap protection, compassionate visits, loss of personal belongings, interruption or cancellation of study, and overseas emergency assistance service, etc. Taking medical expenses as an example, there was insurance company offering it as an "optional benefit", meaning additional premium was required for such medical protection. Some other plans have put a cap on medical expenses benefits. The cap ranged from USD 100,000/HKD 750,000 to USD 250,000/HKD 2 million.

Amongst all plans that provided medical expenses benefits, they also provided follow-up medical treatment benefits for expenses that were incurred after the insured person returned to Hong Kong. However, consumers should note all plans imposed conditions and limitations on making claims, such as benefit amount being capped at a range of USD 5,000 to HKD 450,000 varied across plans. While some policies required the follow-up visits be made within 60 or 90 days (or 3 months) after the insured person returned to Hong Kong, other policies stipulated that specific types of follow-up medical treatments such as traditional Chinese medicine/acupuncture etc. were subjected to maximum limit per treatment, as well as a maximum limit per annum.

Amidst the recent coronavirus pandemic, consumers are keen to know whether infectious disease falls into the coverage of the insured benefits. Of the plans surveyed, some policies did provide protection against losses due to infectious diseases. Nonetheless, insurance companies adhered to different definitions of the term “infectious disease”. Some companies defined it as “any kind of infectious disease which is publicly announced and requires quarantine by the local government”. Other companies defined infectious disease as "any kinds of infectious disease with human-to-human spread in a large cluster(s) of a local population and which is announced by the World Health Organization.” 2 out of the 12 insurance plans would not provide any coverage if an infectious disease broke out in the city in which the insured person attended school. 4 policies would reimburse the insured person for the medical expenses incurred. The rest of the plans would only compensate for the follow-up medical expenses incurred in Hong Kong, and the costs incurred due to cancellation/interruption of study.

With regards to the coronavirus outbreak, some insurance companies have lately set up specific benefits or claim arrangements for their travel insurance plans. Some of these arrangements were also applicable to overseas study insurance. Depending on individual insurance company’s decision, those specific benefits and claim arrangements may only apply to policies that were applied or purchased on or before a certain date. Policies that were applied or purchased after a certain date may not be able to benefit from those arrangements. Prospective policyholders should also beware that the compensation and claims procedures for COVID-19 may not necessarily be applicable to other infectious diseases or epidemic diseases. To avoid any misunderstanding, the Council advises prospective buyers to clarify with the insurers before taking out an insurance plan.

Hong Kong parents have been vigilant of the recent global pandemic and urged their beloved children to come home from abroad. This may cause losses from the cancellation/interruption of study, like irrecoverable school and accommodation fees and deposits, and the travel expenses incurred by the insured person returning to Hong Kong. In the unfortunate event that the insured person was infected and medical expenses were incurred, or the insured person was healthy but was subject to compulsory quarantine, it is worth noting that although most plans have cancellation or interruption of study provisions, the insurable conditions did vary. It is usually set out in details in the policy provisions what causes or circumstances for study cancellation or interruptions were insurable. Reimbursement may not be granted to circumstances that were not listed or did not fulfill the conditions specified in the policy details. For instance, there were policies stipulating that compensation would only be considered for cancellation of study due to the occurrence of an unforeseen “infectious disease” within one week before the insured person made his/her departure. Compensation for school fees that were paid in advance and were irrecoverable ranged between HKD 40,000 and HKD 200,000.

The Consumer Council reminds consumers that overseas study insurance plans do not necessarily cover high risk activities or extreme sports. Prospective policyholders should pay attention to the different limitations imposed by the policy on adventurous sports. For instance, policies generally have a 30-meter depth limit for scuba diving. For mountaineering/trekking, most plans provided coverage for up to 5,000 meters above sea level. However, there were plans that did not provide coverage for mountaineering/trekking activities, and activities that required the use of equipment or ropes, or guided rock climbing/mountaineering activities.

The scope of coverage and benefits amounts differ across plans. Before signing up a plan, prospective policyholders are reminded to consult with the prospective school that the student is going to attend. In particular, if there were certain coverage requirement and policy effective period that the school expected the student to have. Different countries, regions or colleges may require foreign students to come with certain protections. For example, in Mainland China, Taiwan, Japan, and the United Kingdom, foreign students were required to pay to join the local public medical plan and thus have most of the medical expenses covered. For Australia and Switzerland, foreign students were required to choose and purchase a medical insurance plan provided by a local insurance company before a specified date. It is advised to find out more on the requirements from the prospective college/region of study in order to make advance arrangement and assess whether buying additional insurance is needed.

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