There are two million UK citizens living overseas at the present time and a good proportion of them ...
There are two million UK citizens living overseas at the present time and a good proportion of them arrange their private medical insurance (PMI) before they move, retaining links with their UK intermediaries.
The international healthcare market therefore offers excellent opportunities for UK-based IFAs, but with one proviso - they must understand the subject matter and be able to offer the best advice to clients wishing to live or work abroad.
The problem for IFAs lies in assessing what is a good plan and what is a poor plan, from the client's point of view. At face value, some schemes can seem attractive but contain serious pitfalls that can expose the client to financial embarrassment, inconvenience or distress when a claim has to be made.
IFAs should therefore consult an expert before making a choice as to which plan to sell. They need to step into the shoes of the expat and assess what the customer really wants when it comes to their healthcare provision. They also need to be bold enough to offer consultancy advice to the client, steering them away from options that might appear to be appealing, but which could be less satisfactory if and when a client comes to claim.
IFAs need to get to grips with what is, quite simply, a minefield. Each country has its own rules and regulations when it comes to healthcare provision, with not a single one mirroring the UK's all-encompassing NHS.
An important starting point therefore is to check that their preferred insurance provider has the required registration for the country in which they are operating and is paying the taxes required by the national government. It is important to make sure that the insurance provider fulfils these criteria and that its underwriting division has the authority to handle policies across Europe and other countries worldwide.
However, if the IFA opts to recommend a local plan in their client's new country of residence, they need to be equally careful. Often in countries such as Spain, plans offer a voucher system that allows a claimant to take a coupon to their doctor and receive medical attention without having to part with any cash. At face value this seems attractive, but these policies tend to be poor when it comes to intensive care treatment and they typically exclude treatment for a number of other key areas.
The most distressing thing for many expats, however, is that these policies will not allow the expat to elect to receive treatment overseas, perhaps in their home country.
While many enjoy their life abroad and are perfectly happy with their new existence, the picture can change if they find themselves in hospital. In many instances, they are forced to cope with a different healthcare environment to that which they are accustomed, and one which throws up a range of linguistic and cultural challenges that they may find difficult to cope with.
Local links
The best answer to these problems is to work with an insurance provider that knows the market inside out and has local staff on hand that can answer any queries or iron out any problems. Intermediaries should also check when choosing a provider that it can handle claims on a localised basis, which would ensure a quick turnaround time all over the world.
It is important the insurance provider works hand-in-hand with brokers and IFAs, guiding them through the international PMI maze and ensuring that intermediaries can consistently offer best advice to their client, whatever the query.
Having overcome the first hurdle of selecting an informed and efficient international PMI provider, the next stage for IFAs is to ensure that they sell the product effectively and keep the client updated about new situations and options as they arise.
The international PMI scene is constantly shifting as governments review their healthcare systems, bring in new regulations and either cut back or increase what they will offer as the basic level of State care.
Factors that can help an IFA determine whether an insurance provider is going to be up-to-date on a daily basis and right for their need are the things the insurer can provide in addition to the policy. A huge benefit to the UK-based IFA is a website where they can be assured their clients' needs are being continuously guarded and that no client will be left high and dry without cover simply because the local scene has changed.
Diving in
Intermediaries who have dipped their toes in the water of international PMI cover may have met with failure simply because they have lacked the in-depth knowledge that can help make all the difference.
While most are geared to explain the need for international healthcare plans for those living or working overseas, for some intermediaries the knowledge stops there. The most successful agents are those that are able to come to grips with the products, seek advice and help explode the myths about local plans and other less comprehensive plans within the UK market.
International PMI is an attractive proposition for those IFAs who are willing to throw themselves into it and learn how to sell it. The good IFA will encourage their clients to seek out a high quality product at a competitive premium, while explaining that a client should no longer be penalised for moving their policy between providers and that moratorium arrangements will allow pre-existing medical conditions to be covered.
Now is the time for UK brokers to consider selling international cover. The shifting pattern of working arrangements in this country has made early retirement a goal of many of today's 50-something population. Undoubtedly, the expat population will swell in the coming years.
Added to this is the increasing trend for people to work abroad in overseas offices and satellite companies. This also presents very real opportunities for those intermediaries that understand the small print of the products and seek out the right insurance partners.
Paul O'Sullivan is director of sales at Goodhealth
