did you know that if you get sick or injured abroad, you could be covered for up to 40% of your medical expenses abroad if you have a primary accidental death and dismemberment policy? Plus, duplicate coverage with your travel insurance, pro-rata coverage, and claim forms. everything you need to know about medical bills in a foreign country, all in one article.
table of contents
prologue: Daughter's Surgery, Dad's Worries in a Foreign Land
accidental Loss vs Travel Insurance: The Fundamental Difference You Need to Know
waking up a sleeper: The hidden 40% overseas medical expense benefit of first-generation stop-loss policies
digging into your travel insurance policy: 'You're not covered for this' key exclusions
when two insurance policies meet: demystifying the tricky 'proportional indemnity' (case analysis)
practical guide: From A to Z, from receiving care abroad to filing a claim when you return home
frequently asked questions (FAQs): key Q&As about medical expenses abroad
conclusion: A final checklist to become a smart traveler
1. prologue: Daughter's Surgery, Father's Worries in a Foreign Land
mr. Park, in his 50s, was on a dream trip to Italy with his family. while marveling at the grandeur of the Colosseum, his daughter suddenly clutched her stomach. Breaking into a cold sweat and in excruciating pain, he rushed her to the emergency room of a nearby hospital. the diagnosis was acute appendicitis, more commonly known as appendicitis, and Park's head turned white when the doctor told her she needed surgery immediately.
he was worried about his daughter's health, but at the same time, he was faced with a hospital bill that could run into thousands of euros. "Will my accidental death and dismemberment insurance in Korea work here?" "Will the travel insurance I hastily purchased before leaving the country be enough?" "Who should I contact first?" and countless other questions raced through his mind. Medical emergencies in a foreign country can be a double whammy of health concerns and financial burdens. this article is the most definitive and detailed guide to help you navigate the waters.
2. accidental Loss Insurance vs Travel Insurance: The Fundamental Difference You Need to Know
the name "insurance" often confuses many people about the roles of these two products, but they are completely different from one another, from their origins to their purpose.
accidental death and dismemberment insurance: Your 'domestic' health protector
at its core, Shilson Medical Insurance is designed to cover medical expenses incurred within the Korean National Health Insurance system, which means it covers deductibles for covered items and noncovered expenses incurred when receiving treatment at a hospital in Korea. it's your 'domestic' health protection that protects your health in the long run.
travel insurance: your 'overseas' safety specialist
travel insurance, on the other hand, is a "short-term specialty" product that covers you for the unpredictable risks you may encounter abroad during a short trip. it covers medical expenses for injuries and illnesses abroad, as well as various events and incidents that may occur while traveling, such as theft or damage to your belongings, liability to others, and extra expenses due to flight delays.
the notion that "I don't need travel insurance because I have accidental death and dismemberment insurance" can be dangerous, especially since second-, third-, and fourth-generation accidental death and dismemberment policies sold after October 2009 rarely offer overseas medical expense coverage, making travel insurance a necessity, not an option. This is partly a result of the insurance industry's strategic shift to clearly distinguish between domestic medical risks and overseas travel risks, and to manage each with specialized products. consumers need to be smart about understanding this market structure, and buying the right insurance for each situation.
3. waking up the sleepers: The hidden 40% overseas medical expense benefit of first-generation stop-loss policies
if you purchased a stop-loss policy before September 2009, chances are you have a 'hidden treasure'. that's because these policies, called "first-generation stop-loss policies," include a special benefit: overseas medical expense coverage.
who is eligible for first-generation stop-loss insurance?
anyone with a pre-standardization stop-loss policy sold through September 30, 2009. pull out your policy today and check your inception date.
key: What the 40% overseas medical expense coverage rule really means
first-generation stop-loss policies typically state that they "cover 40% of medical expenses incurred at a medical facility located abroad. but here's the most important pitfall. this doesn't mean that it will reimburse you 40% of the total amount of the overseas hospital bill you paid .
the insurer considers the treatment abroad to be "uncompensated medical treatment not covered by the National Health Insurance" and pays 40% of the cost as if the treatment had been performed in Korea.
for example, even if you paid $500,000 for a cold in a U.S. hospital, the insurer will determine that "the uncompensated cost of a cold in Korea is about $50,000" and pay you $20,000, which is 40% of $50,000. This can make a big difference, especially in countries with high healthcare costs, so it's never a good idea to rely solely on the first-tier stop-loss coverage.
nevertheless, this 40% coverage is very important. if your travel insurance denies coverage for a specific reason (such as playing a high-risk sport under the terms of your policy), your first-party accidental death benefit can pay out 40% as long as the need for treatment is recognized, regardless of the cause. In other words, your first-party accidental death benefit can act as a strong "second safety net" to fill in the gaps in your travel insurance coverage.
4. digging into your travel insurance policy: key 'you're not covered for this' exclusions
travel insurance is your best friend abroad, but it doesn't cover everything. One of the most disputed areas of a claim is the exclusions, or "what it doesn't cover." If you don't want to bother reading the fine print, you should at least familiarize yourself with the key exclusions outlined in the table below.
exclusion detailed description and reason real-world examples pre-existing conditions (preexisting conditions) insurance covers unpredictable risks. treatment and management of chronic conditions such as high blood pressure, diabetes, and other pre-existing conditions are not covered. if a person with high blood pressure forgets their usual medication, leaves the country, and is prescribed medication at a local hospital, the cost is not covered. high-risk activities dangerous recreational activities that fall outside the scope of normal travel activities, such as scuba diving, skydiving, rock climbing, and paragliding, are excluded from basic coverage. if you are injured while on a guided scuba diving trip, you may not be able to recover unless you have purchased the 'Dangerous Recreation' specialty rider. mental and nervous conditions we don't cover psychiatric treatment for depression, anxiety or panic disorder. if you visit an emergency room for symptoms of panic disorder while traveling, we won't cover related medical expenses. pregnancy, childbirth, and miscarriage pregnancy and childbirth are considered a natural process, not a sickness or injury, and are not covered. however, some policies may cover unexpected complications of pregnancy. if a pregnant traveler has a premature birth locally, maternity-related expenses are not covered. alcohol and drug-related accidents we don't cover accidents that are caused by your own gross negligence, such as being intoxicated. if you're drunk and fall down on the street and break your arm, your insurer may refuse to pay your claim based on the fact that you were drinking. non-emergency dental care we don't cover predictable or non-emergency dental care, such as cavity fillings, cleanings, etc. However, emergency treatment for a broken tooth due to sudden trauma may be covered. if you get a cavity that suddenly becomes painful while traveling, it's not covered, but if you break a healthy tooth in an accident and receive emergency treatment, it may be covered. travel for medical purposes we don't cover all medical expenses incurred while traveling for medical purposes in the first place, such as cosmetic surgery or treatment for an illness. if you go to Thailand for a cosmetic procedure and have an adverse reaction, all related medical expenses are not covered.
5. when two policies meet: demystifying the tricky 'proportional indemnity' (case analysis)
if you have both primary and travel insurance and you incur medical expenses abroad, the two insurers will split the benefit according to the principle of 'proportional reimbursement'. proportional compensation is a system in which each insurer shares the loss according to a set calculation so that you don't get double the amount of the actual loss, even if you have multiple insurance policies.
your insurer will do the complicated math, but understanding how it works will help you know your rights. let's take a step-by-step look at the proportionate compensation process using a hypothetical example.
case: Mr. Lee fractures his wrist in a fall in London
situation: Lee, a first-generation physical loss policyholder, fractures his wrist while traveling in London
total hospital expenses: £2,000 (approximately $3.4 million)
insurance coverage:
first-generation accidental death and dismemberment insurance: 40% coverage for overseas medical expenses
travel insurance: 30 million won limit for overseas medical expenses (10% deductible)
3 steps to calculate proportional compensation
step 1: Calculate each insurer's " stand-alone liability" Stand-alone liability is the amount each insurer would have to pay on its own, assuming no other insurance.
independent liability amount for travel insurance: Total hospital bill of 3.4 million won minus 10% co-payment (340,000 won) 3 ,400,000×90% = 3 , 060 ,1,000,000 won
independent liability amount for first-generation D&O insurance: Assume the insurer estimates the non-payment cost of the treatment in Korea at KRW 2 million 2 ,000,000×40% = 800, KRW 1 million
step 2: Substitute into the proportional indemnity formula Now divide the calculated stand-alone liability by the actual benefit payable. the formula is as follows
payout = Totaldamages× Sum ofallpolicies'independent liability Individualpolicies'independentliability
sum of all policies' independent liability: 3 , 060 ,000 + 800,000 = 3 , 860 ,000
final amount to be paid by travel insurance: 3 ,400,000× 3 ,860,000 3 ,060,000 ≈ 2 ,691,710 KRW
the final amount to be paid by the first-generation actual loss insurance: 3 ,400,000× 3 ,860,000 800,000 ≈ 704,663 KRW
step 3: Check the final result Lee receives about KRW 2.69 million from the travel insurance company and about KRW 700,000 from the property and casualty insurance company, for a total of KRW 3.396 million (rounding differences), covering most of the KRW 3.4 million in actual hospital expenses.
key practical tip: You don't need to do this complicated math yourself - just filea claim with both insurersafter you return home, letting them know that you're "also insured by another insurance company," and they'll coordinate with each other to proportionally compensate you. it's important to keep your paperwork organized, though, as you'll need to submit it to both and check on the progress of each.
6. practical guide: A to Z: From checking into a hospital abroad to filing a claim after returning home
now that you know the theory, it's time for the practice. it's easy to get caught off guard and make mistakes. keep the steps below in your head or save them to your smartphone.
part 1: At a local hospital abroad (golden time to get documentation)
contact your insurer immediately: The first thing you should do is call the '24-hour Korean help service' or emergency assistance number listed on your travel insurance policy. They can help you find a nearby hospital, connect you with an interpreter, and in some cases, even offer a 'payment guarantee service' that will pay your hospital bill for you.
obtain the 'essential set of three documents': After your treatment, you must request the following three documents from the hospital's front office
diagnosis Report / Medical Certificate: An official medical certificate that includes a disease code (disease classification)
itemized Bill / Statement: a detailed itemized statement of all medical fees, tests, medication, treatment, etc. simple card receipts are not acceptable.
receipt: An official receipt that serves as proof of full payment of a hospital bill
prescriptions and receipts: If you were prescribed medication by a doctor, you should include a copy of the prescription and any receipts from the pharmacy.
part 2: After you return to Korea (Claims process)
translation and notarization issues: Most insurers will accept documents in English, but they may require a translation if they are in a third world language or complex. you'll usually have to pay for the translation, so it's a good idea to contact your insurer first to make sure it's necessary and if they have a designated translator.
file a claim withboth insurers: With your documentation in hand, file a claim with both your property and travel insurers. these days, most make it easy to file through their mobile apps or websites.
the ultimate overseas medical claim documentation checklist
category required Document where to get it key points and notes common forms claim form, personal (credit) information processing consent form each insurer's website/app initiation of a claim. be sure to fill in the information correctly, including account numbers. proof of travel copy of your passport (photo side, immigration stamp side), airline ticket (e-ticket) in your possession proof that the incident occurred during your actual stay abroad. if you don't have an immigration stamp, you'll need to get a "Certificate of Entry and Exit". medical proof medical certificate, medical bill details, medical receipts, prescriptions hospital/pharmacy abroad the most important key documents. keep the originals handy and make multiple copies to be on the safe side. other mishaps (Police report from local police department (for theft), photos of damaged items and repair estimates (for damage) local police department, repair company you'll need these to file a claim for medical expenses, damage to your belongings, and more.
7. frequently asked questions (FAQs): key Q&As about medical expenses abroad
Q1: It's been a while since my trip, can I still file a claim now? A: Yes, you can. the statute of limitations for filing a claim is three years from the date of the incident. as long as it's within three years, you can file a claim for forgotten overseas medical expenses as long as you have supporting documentation.
Q2: I paid the hospital bill in dollars, but the insurance payment came in Korean won. Why is the amount slightly different? A: The insurer will pay you in Korean won based on the "Telegraphic Exchange Rate" (the exchange rate when you send the money) on the day the claim is reviewed, not the rate you paid with your card. this may result in a slight difference due to fluctuations in exchange rates.
Q3: I paid $50 to get a medical certificate from a hospital, can I be reimbursed for this? A: No, it is not covered. The cost of obtaining documentation for a claim, such as a medical certificate or doctor's note, is not a direct medical expense and is not covered under the policy.
Q4: Is it okay to travel to the United States with only a first-generation physical loss policy? A: Absolutely not. as we explained earlier, the 40% coverage in a first-generation policy is based on the cost of living in Korea, which can be a "piss in the wind" in the US, which is notorious for its murderous medical costs. if you're traveling to the US, Canada, Europe, or any other country with high medical costs, make sure you have a solid travel insurance policy with a coverage limit of at least 100 million won.
Q5: I'm not feeling well and bought an over-the-counter cold medicine without a doctor's prescription. Can I claim for this? A: No, you can't. travel insurance only covers the cost of specialty medications purchased under a doctor's diagnosis and prescription. over-the-counter medications purchased without a prescription are not covered.
8. conclusion: A final checklist to be a smart traveler
an unexpected illness or accident abroad can happen to anyone. however, thorough preparation beforehand will empower you to respond in the best way possible without panicking in a crisis. to wrap up the key takeaways from this article, we offer a final checklist for your safe travels.
traveling should be a time to make happy memories, not worry, and a few minutes of forethought and preparation can protect you and your family from unexpected risks. we wish you the best of luck as you take confident steps into the world. safe travels!