Should Struggling Expats Self-Insure Their Health?

Should expats cancel their medical insurance to try and save a few pounds and just pay for treatment when they need it?

A sad story in last week’s Sunday Times about struggling expats highlights the reality that there are those who are living abroad and who are suffering the fall out from the global financial crisis as much as many who’re still resident in the UK.

We can’t all run and hide from the credit crunch, and recession depression is a reality for many of us, no matter where in the world we’re living.  The fact of the matter is, jobs are harder to come by, property values have deteriorated, and as a result people are having to live with much less in their pocket each month.

So, should struggling expats consider cancelling their private medical insurance and self-insuring their health instead?  Is it a legitimate way to save money, or is it a dangerous risk to take?

The answer is one of those ‘it depends’ type answers rather annoyingly, but in this article we’ll discuss and explore all the options open and available to you if you’re finding that financial times are significantly tougher, and that you really need to cut back and save some cash.

Should Expats in Employer’s Schemes Cancel Health Care Benefits?

If you’re living abroad and are still in employment, and if your medical insurance is linked in with a corporate policy – i.e., you have your medical insurance through your firm, chances are your premiums are heavily supplemented by your employer and the discount that they have with the insurance company.  Now whilst you could approach your employer and ask them to cancel your membership and pay you into your salary the equivalent of any premium they submit to the insurer for you, it is highly unlikely that they will do so.  They will be willing to cancel your membership, but you’re unlikely to receive any extra cash into your bank account as a result.

Your only saving in this instance would be the small amount you pay each month towards your insurance as well.  Therefore the saving is likely to be small.  If you’re looking for ways to save money, this may not be the best way.  The saving will be small, the risk you then take on will be great.

Can Privately Insured Expats Save on Health Care?

If you have a personal policy and you’re of working age, you live in a country with relatively well developed medical infrastructure and you have some savings in the bank, you could cancel your expat private health insurance and save a tidy sum each month as a result.  The risk you’re then taking is that you fall ill and have to eat into your savings as you self-insure on a day-by-day, doctor’s visit by doctor’s visit basis.  This could be a viable option for you if you feel that taking this short ‘holiday’ from being insured could see you through a tough financial time.

Why Retired Expats Need Health Insurance

Expats approaching retirement or those who are already living off a relatively fixed pension income need to think incredibly seriously before they consider cancelling their health insurance however.  This is because getting re-insured later could be very difficult as insurers become less willing to take you on the older you get, and also because you are statistically more likely to need medical care and intervention the older you get.  Therefore, if you have no policy in place and you self-insure instead, you could end up eating up all of your savings with medical bills.

Some say that private medical insurance is a luxury, a benefit that’s ‘nice to have’ rather than a necessity.  For those resident in the UK where there is a fantastic national health service that’s free and accessible for all we would be inclined to agree, but for expatriates who are resident abroad and therefore not entitled to NHS care, who have to pay for all medical treatment they need, we would say that ideally you’ll find better ways to save money before you even consider cutting back on this rather essential insurance.

Money Saving Options for Expats

If you shop around for expat medical insurance you may well find that you can reduce your monthly premiums and therefore save money whilst still maintaining a level of insurance in case of illness.  We’d therefore suggest that you get alternate quotes, and if in doubt, even speak to a financial adviser who may know of other insurers currently offering deals to sign up new customers.  Think carefully about any action you do take – because without your good health, you won’t be able to enjoy any of the money you’re attempting to save anyway!