Kinnell Insurance and Financial

Informative Articles

 

Heading south

Canadian snowbirds appear as ready as ever to migrate to the United States

 

“Well, I Didn’t Actually Read The Policy.”

 

Annual Trips Have Great Potential — But They Need Explaining

 

Early Birds Must Report Health Changes

 

Canadians Moving To U.S. Should First Establish Health Insurance

 

Symptoms Count When Defining Pre-existing Conditions

 

Short Term "Renewals" for Visitors Require Explanation

 

Canadian Life and Health Insurance Association Travel Advisory

Heading south

Canadian snowbirds appear as ready as ever to migrate to the United States

James Daw, Business Columnist

 

The threat of terrorist attacks will not keep Sky Flotron of Collingwood — or most other Canadian snowbirds — out of the United States.

 

Flotron, 59, has merely taken the standard precaution. He bought emergency health insurance before he drives his dog and golf clubs later this month to his second home in Pinehurst, N.C. His wife Geri will join him later.

 

"I didn't give it a second thought that I would be in danger (from terrorists)," says Flotron. But he does recall that three days in a U.S. hospital after a heart attack in November, 1997, cost his insurer $50,000.

 

Insurance sellers say the instinct to migrate south remains powerful.

 

Sales did stall somewhat during the two weeks after the Sept. 11 attacks in New York and Washington. But calls from long-stay, snowbird travellers are picking up as the weather cools and the leaves turn colour, the sellers say.

 

Some are reporting record sales despite stiff prices increases.

 

"People still seem to want to travel," says Mark Simone of Medipac International Inc., whose fall prices for members of the Canadian Snowbird Association (CSA) are up 13 per cent from a year ago. "We are having a record season for sales, which sort of dumbfounded us."

 

Simone says 88 per cent of CSA members normally drive south and do not stay in major American cities that are more likely targets for terrorist attacks.

 

This year, some of those who normally fly are also planning to drive, or find someone to drive them, he says. And other insurance sellers say some clients are planning one last trip to sell properties down south.

 

Medipac has had only 20 clients cancel contracts. "The rest are still gung-ho to travel. They say, `let's live our lifestyle,'" Simone reports.

 

Michael Brattman of the McLennan Group says September sales of the CARP plan for members of the Canadian Association For The Fifty Plus dipped 15 per cent.

 

Yet, total sales of the CARP plan for the year so far are up 10 per cent, thanks to strong early-bird sales before a 5 per cent price increase July 30, he says.

 

Some seniors may be discouraged by prices, however.

 

Many seniors will pay much more for insurance this year because a low-priced but skimpy snowbird plan called Pure Insure stopped sales when the manager couldn't find an insurer.

 

Some plans such as the one offered at credit unions have held the line on prices. But several others have had big increases, blaming higher U.S. medical costs, a weaker Canadian dollar and losses due to high claims costs last year.

 

Travel health is a notoriously difficult market for insurers to make a profit, despite prices of more than $10,000 to cover those past age 80 with health problems.

 

Ingle Life & Health Insurance is under new and stronger ownership after provincial regulators became concerned that it was headed for financial trouble. The former owners, a financial holding company, declared bankruptcy last month.

 

Christine Raymond of Avalon Actuarial Consulting of Montreal, which monitors the travel insurance market, says it's impossible to calculate an overall average for price increases.

 

"Some plans have lowered prices for some rating categories, age groups or trip durations, and raised prices for others," she explains.

 

But her firm has noted increases of 10 to 25 per cent for plans targeted at the snowbird market. Plans targeting a broader market have raised prices 5 to 15 per cent.

 

Meanwhile, many seniors will pay more this year because they are a year older, their health has deteriorated or their favourite plan has tighter rating criteria.

 

Others have lost a favourite cost-saving strategy because their credit card provider has cut back coverage or eliminated it for older groups.

 

John Wilson of M. Butler Insurance Brokers Ltd. in Niagara Falls says most card issuers will no longer cover those over 65, while a MasterCard offered by a local credit union has cut off those past age 70.

 

"This isn't good news to the many 70- and 80-year-old snowbirds that I deal with," says Wilson, noting tighter health and age criteria at free-standing insurance plans, too.

 

"It's getting pretty aggravating," he adds. "One year any given company is a hero (with clients), and the next year it's a hell. Seems like the real dollar winners this year will be the brochure printers."

 

Raymond notes that various multi-trip plans, which snowbirds used to use to save money, have reduced the lengths of trips that will be covered. So it will be prohibitively expensive to fly back and forth to enjoy a long period in the south.

 

Some travellers desperate to maintain their lifestyle at a reasonable cost have succumbed to the temptation to cut corners.

 

About 35 took the suggestion that Pure Insure's president Peter Buchanan passed on from snowbird Frank Oliver when Buchanan wrote to inform his clients he had no longer had plans to sell.

 

Oliver had told Buchanan that he was going to save $1,363 on coverage by accepting a $5,000 (U.S.) deductible charge on a Canadian policy, then buying a $5,000 policy from the United States.

 

But it turned out that the Pennsylvania broker promoting the U.S. policy, his Connecticut managing general agent, and underwriter Gulf Insurance Co. are not licensed to sell to Canadians. And the insurer did not want the snowbird business.

 

"We are going to return the application forms to the Canadian clients and say we are sorry we cannot cover them," says Peter Gehris of Travel Insured International of East Hartford, Conn.

 

Medipac's Simone says a growing number of rival plans are offering lower prices by excluding coverage for pre-existing conditions — a risky option for clients.

 

"Too many people are going away without being covered for what is wrong with them," he says.

 

Raymond says she is often shocked when she asks seniors about the coverage they buy. They assume that because they feel healthy they will qualify for healthy senior rates, such as those The Star compares each year. They also misunderstand the varying health conditions from one policy to the next.

 

Many policies have three sets of criteria. First, there are questions to determine whether the senior qualifies at all. Then there are questions to determine which rate structure will apply. Finally, there are requirements regarding stability and changes of medication for pre-existing health conditions. Different policies can have stability clauses ranging from three months to five years.

 

"Seniors get them all mixed up in their minds," Raymond says. Some fail to consult with their doctors and forget to mention a pre-existing medical condition that has not bothered them lately.

 

Marlies Kinnell, of SCS Travel-Med Plan and Kinnell Insurance and Financial Inc. of Barrie, says an example of non-disclosure cost one of her clients $28,000 last winter.

 

The client had to have his appendix removed, but the insurer denied his claim because it discovered that he had failed to disclose he suffered from asthma.

 

Geoff Burman of Broker Advantage in Hamilton, which specializes in difficult-to-arrange coverage, says that even insurance agents sometimes make errors.

 

An agent told a 72-year-old client who had had a minor stroke and a history of high blood pressure that he would be covered if his conditions were stable and controlled for six months. In fact, the policy said he could not have taken medication for the conditions for the previous six months.

 

Sky Flotron said he gained a keen appreciation of the value of a knowledgeable insurance broker after his heart attack in 1997.

 

His original insurer ordered him to return to Canada, and when he went looking for new coverage to return south he could find nothing. Kinnell, who has eight different plans to sell, found him something.

 

Kinnell says she and the 220 brokers across Ontario who deal with her use a detailed health questionnaire before trying to fit clients to the best policy.

 

Consumers looking for further tips on buying travel health insurance can request a brochure from the Financial Services Commission of Ontario, or print a copy from the Web site http://www.fsco.gov.on.ca/.

---

 

Article courtesy: