Summary of costs for our 2011-12 RTW trip
Replies: 26 - Last Post: Nov 27, 2012 7:27 AM Last Post By: Andreas_at_LP
Nov 26, 2012 7:41 AM
Nov 26, 2012 8:53 AM
16@travelinstyle: I had some random insurance through our credit card (accidental death and dismemberment on flights we booked, car insurance on rentals, etc.) and disability insurance, but no medical insurance. Most U.S. based health insurance will not cover you abroad, and most travel insurance medical coverage options didn't look that great to me. I did a lot of research and looked into a lot of insurance plans before the trip and didn't like a lot of plans for how much they cost considering what they covered.
If you think about it, insurance companies need to make a profit to stay afloat and have operating and marketing costs to cover as well, so the majority of the time they will make money off you and use complex and detailed actuarial science to do so. So in my opinion, there are only three reasons to get insurance:
1. It's required by law.
2. You know something the insurance company doesn't (you're actually riskier or unhealthier than you appear on paper).
3. If whatever you're insuring against happens (and there is a distinct possibility of it happening), it could be a financial disaster for you.
We're young and healthy, and we just didn't find great options for health coverage abroad that we were willing to pay for when the chance of something happening was so low. We also had backup funds ourselves in the six figures in case something catastrophic were to occur, which would cover most emergencies. Plus in developing countries at least, healthcare costs tend to be a lot cheaper (heck, even most developed countries are cheaper than the U.S., but that's a rant for another time).
We are planning on getting health insurance now that we're back in the States (normally we would put it under category 3 above), but we felt ok about not having insurance abroad, and we were lucky that nothing happened that could have been covered by insurance (except maybe $5 dental cleanings in Thailand?). I'm not saying that "self-insuring" with our emergency funds was the right decision and certainly not the right choice for everyone, but I am a doctor (who has also done medical work in several countries abroad) and I do feel like I went into it with my eyes open. We felt ok about taking that risk.
Nov 26, 2012 9:34 AM
17Groan, while I understand your un-voiced belief that you are immortal purplmarsh the fact is you are not.
You cannot say, " If whatever you're insuring against happens (and there is a distinct possibility of it happening), it could be a financial disaster for you." as if you know the answer to that and can therefore disregard it, which you did.
Insurance is just what the name means. You are insuring against something that may never happen and you certainly hope won't happen.
Let me give you an example. A fellow I know was on a Greek island and had an accident while riding a 'scooter'. He nearly died and had to be air ambulanced from the island to Athens. He then spent about a month in hospital there before being air ambulanced home to the UK. He was in hospital there for months. Unfortunately, he is a paraplegic today and needs home help etc. to live his life.
Another fellow I know, a doctor who was a hang gliding competitor at an international level had an accident. His 'chute' malfunctioned and he plummeted to earth. He lived but is now in a wheelchair. Again his medical costs would have been astronomical for him to pay from his own pocket.
Now tell me how you KNOW that couldn't happen to you? If it did what would it cost do you think? You would not need 6 figure back up, you would need 7 figure back up.
You pay for insurance 'in the unlikely event' that you need it, not based on what you THINK is likely to happen. Yes, most people hopefully never need to claim and yes, the insurance company is in business to make a profit but they are also providing us with a much needed service.
To travel (or live at home for that matter) without medical insurance is foolish given the high cost of medical services today. Insurance costs are not something you look for a justification for based on the likelyhood of needing to claim. You hope NOT to get your moneysworth out if it!
Someone doesn't take out life insurance hoping to die or thinking it is likely to happen soon. They take it out to provide for their family IF they die. You can't look at it in the same terms as 'should I buy a car' or whatever. You can't say, 'will I need it?' and conclude 'probably not'. You can't look for a percentage chance of needing it as in , '70 % of people who have it make a claim so it is a good idea'. None of the normal ways of looking at a decision to make a purchase apply in the case of insurance. It is totally the opposite.
Nov 26, 2012 11:27 AM
18@travelinstyle: I certainly don't think I'm immortal, especially as a doctor. I've seen people die before my eyes, including previously healthy children in a car accident or sudden illness. I have family members dealing with chronic illness. That's the reason I took this trip now instead of waiting for retirement - you never know what's going to happen.
I said previously that I do feel like health insurance falls into category 3 and that we are going to get insurance now that we're back in the States. I also mentioned before that I can't say for certain that self-insuring was the right decision (and certainly not for a lot of people), and that we took a risk. However, I do feel that six figures is enough to cover most emergencies (and should comfortably cover the hang-gliding accident you mentioned). If you're talking seven figures, you're probably screwed anyway (you must be really freaking sick, and many insurance policies have a lifetime limit of $1 million or even less). What is the maximum coverage on your policy? Whatever it is, couldn't you imagine some really catastrophic event happening where you go over that limit? Just because you can imagine it, does that mean you should go out today and buy some more insurance to cover that?
As a more general philosophical point, I think there are a lot of insurance agents out there who try to scare people into buying insurance with fear tactics. I'm sorry about the fellow you knew in Greece, but something like that happening is extremely unlikely. According to the National Spinal Cord Injury Statistical Center in Alabama, there are 40 cases per million of spinal cord injury in the U.S. every year (both paraplegic and quadriplegic injuries). People naturally overestimate extremely unlikely but vividly imagined events, yet don't wear their seatbelts every time they're in a car or don't eat well/exercise more to avoid heart disease. They are afraid of their kids getting snatched by a stranger on their way to school so they drive them instead, where their chances of a car accident are far higher. Are you going to buy "getting struck by lightning" insurance just because it could happen to you? There are risks involved with every single decision you make. You could argue that you shouldn't travel at all because it's safer to just stay at home and do nothing. Also, would you buy a health insurance policy that costs $30,000 a year in premiums if that was your only option for health insurance? Not that most travel insurance would cost that much, but I just want to point out that at some point you have to take factors like cost and likelihood into consideration. Neither I nor my husband have life insurance right now because it makes no sense for us in our particular situation, but this may change once we have kids. I do have disability insurance because I found a great policy. I simply reject the basic premise that one should always buy insurance in case something really bad happens without considering factors like cost and likelihood.
In any case, I have a feeling I'm not going to convince you. I think we have pretty different worldviews based on some of your other posts, which is fine. Let's agree to disagree, and thanks for all of your thoughtful comments on this thread.
Edited by: purplmarsh
Nov 26, 2012 11:44 AM
19six figures wouldn't cover an air ambulance from most places, and certainly not from one hemisphere to another. Tiny risk, huge potential cost, insurance not that expensive.
hope it never happens - but it does, and there are people in big trouble because they didn't insure for it. I would say that the bits of insurance that you could dispense with are...well, anything except medical and medevac.
thanks for the other clarifications.
Nov 26, 2012 11:47 AM
20Sorry, one more thing. I could argue that it's just as "foolish" (your word) to go hang gliding or ride a scooter as it is to travel without medical insurance. Have you ever participated in any sports activities that are risky? Many travel insurance policies won't even cover a lot of adventure sports unless you buy a special rider on your policy, and even if you buy a rider, won't cover you for things they view as especially extreme, like hiking over an altitude of 4500 meters.
Nov 26, 2012 12:03 PM
21@neverwinter: Six figures should definitely cover an air ambulance from anywhere. One website I looked at: "For a flight from Arizona to Australia, Air Ambulance 1 charges about $155,000 on a light jet, if staffed by paramedics (about $160,000 if staffed by a doctor and nurse) or about $177,000 on a mid-sized jet (about $182,000 if staffed by a doctor and nurse)." Expensive, definitely, but not over a million dollars expensive.
Nov 26, 2012 1:21 PM
22My brother just got standard travel medical cover for spending a winter in Florida, from Canada. Cost a couple of hundred bucks and coverage is $5 Million. They used to just cover $2 Million but that is no longer considered sufficient for travel to the USA.
Write what you will purplmarsh and of course you are free to make your own decisions but anyone travelling without medical cover is a fool or an ostrich in my opinion. It doesn't cost that much and INSURES you against the unexpected.
My serious advice to you is never be that silly again.
Nov 26, 2012 2:38 PM
23Look, here's my thought process. I try to make rational decisions instead of thinking about anecdotes.
Here's a grossly oversimplified version of what an insurance company does for you:
1. Multiply the probability of Y event times its cost. Add up the probability times cost of a bunch of the unlikely events they cover and they come up with a number of how much you're likely to cost them.
2. Add in operating costs to rent their offices and pay their employees and buy their computers and make phone calls and do paperwork and all their marketing costs to buy a bunch of ads to get consumers to give them money.
3. Add a profit margin so they actually make some money and stay in business.
4. Your premium includes the cost of 1, 2, and 3.
5. Don't forget to try hard not to pay out with misleading fine print or claiming a preexisting condition when there isn't really or whatever (I have definitely heard a lot of stories on this end for many companies).
Now, if you don't have a lot of money, it probably makes sense to get insurance because you're screwed if anything happens. Conversely, if you're a billionaire, it's stupid to get insurance, because you can pay for everything out of pocket and there's no point in giving an insurance company extra money to run their electricity (surely you agree with this statement, right, travelinstyle?).
We certainly aren't billionaires, but we are lucky to have a good amount of savings that will cover the vast majority of the most common accidents and illnesses (that are all still pretty unlikely). We basically provided our own insurance policy with our savings for an unlikely event without any of the extra costs we would have given to an insurance company. If we had liked some of the real policies we had seen better, we would have probably gotten one for the peace of mind anyway. And we have no problem with anyone else making a different decision with our same situation or their different one or whatever. I think it's a personal choice based on how risk-adverse you are and the particulars of your situation.
If an insurance policy is really cheap, that also means that the chance of whatever they cover happening is extremely low (or they're going to try their hardest just not to pay you) - they are still including their operating costs and profit even in that cheap price they provide for you.
What I don't quite understand is why you've resorted to groaning and calling me silly, foolish, and an ostrich. Really?? We thought through a decision carefully and took a calculated risk based on the resources we had. Have you ever gone skiing or skydiving or ridden a motorcycle in dangerous traffic or any sort of remotely risky activity? Did you eat anything remotely unhealthy today? Would you like me to berate you about a personal decision you made that involved any sort of risk, no matter how small? Geez. Let's just agree to disagree and leave it at that.
Nov 26, 2012 9:30 PM
24I self insure for dental based on that kind of thinking. I don't have life insurance since I don't have dependents who would need it. I used to work with a company that self-insured their fleet vehicles based on that kind of thinking. But I don't see why you think it is the same thing if you apply it to medical Insurance.
I still think you are vastly underestimating what it can cost if you have a serious accident or illness when travelling. I understand you feel comfortable with the idea of paying for a birth at $5-6k yourself or even a bypass at around $66k. But a catastrophic accident while travelling will go far beyond those kinds of numbers. It isn't just the immediate care but the ongoing care that has to be considered.
But even ignoring all that, how does saving a few hundred dollars on insurance make sense if like Norwegian, you get bit by a rattlesnake in Arizona and the bill for treatment comes to $143K. Even if you have $143k lying around, do you really think the math adds up?
Anyway, enough said.
Nov 27, 2012 3:58 AM
Nov 27, 2012 7:27 AM
(3 star Hotel)
From US$320.13 per night
(4 star Hotel)
From US$193.08 per night
(3 star Hotel)
From US$214.90 per night