Peter Cornish breaks down everything you need to know about health insurance in Vietnam. Photo by Vinh Dao.

Buying insurance can be a confusing and daunting prospect. The first step is recognising the need for it. Here in Vietnam we don’t have the government health care systems that many of us rely on back home, yet the risks we face in everyday life can be much higher than we are used to.

Once the need is recognised, the next step is doing your homework. My insurance is up for renewal shortly, so I met up with Quinn Miller, Managing Partner at Tenzing Pacific Insurance Services, to ask his advice about my options.

“Due diligence is essential for determining which plan is right for you, and why. Cheaper plans can look attractive but you tend to get what you pay for. Unless you have a keen eye for this, or ask the right questions, you often won’t get the full details for cheaper plans which can cost you in the longer run. It’s important to be a smart buyer.” Quinn explains.

As to be expected, there are a good number of factors that will influence the cost of your insurance, and the extent of its coverage. There are hundreds of packages available and the costs vary significantly. Like a fine wine, the cost tends to rise with age as the likelihood of you making a claim increases. Most providers clump people in age brackets, typically rising in 5 year increments, and calculate premiums from there.

A second factor is the coverage area. “Where you’re covered and the cost of medical care in those countries will have impact on your premium”, Quinn explains. There are typically four main areas of coverage – your country of residence, such as Vietnam; SE Asian coverage, which may exclude Singapore; worldwide, excluding the USA and some other countries; and a truly worldwide package that will cover you wherever you are. Costs of course vary according to the extent of coverage you opt for.

“Another key factor influencing the cost of your insurance are the benefits you choose. The more benefits, the higher the premium” Quinn continues. Standard plans include inpatient treatment and usually emergency evacuation and repatriation. The most notable addition is outpatient treatment, which will cover you for visits to a doctor or clinic for minor injuries and illnesses. Other benefits might include dental work, maternity care or optician visits.

One of the first choices to make is to go with a Vietnamese provider, typically the cheaper option, or an International provider that may have better terms in the long term. Overall, there are many similarities between them, but Vietnamese providers often have lower benefit levels, such as limitations on visits or expenditure per day, which can lead to additional out of pocket expenses.

These limitations may also determine where you receive treatment, and again result in additional expenses. At the time of choosing your policy this might not seem important, but in the case of an emergency you will certainly be wanting the best facilities and doctors treating you. Vietnamese providers can also place restrictions on where you are treated for planned medical procedures, whereas International providers tend to allow treatment for anywhere in your coverage area.

Another significant consideration are the terms under which you renew your policy. “Insurers use two methods to determine their renewal premiums – Experience rating & Community rating. These are important to understand as it will affect your premium at renewal.” Quinn explains.

Experience rating is calculated by looking at how much you have used your policy in the previous year. The more you have claimed, the higher the renewal premiums. This works well if your claims are low, but if you have required ongoing treatment your premiums may skyrocket. This is typically how Vietnamese providers handle renewals.

“International providers tend to use the Community approach. This is where the insurer takes all their members and diversifies the risk among everyone” Quinn says, “they evaluate the performance of their entire portfolio over the year and apply a fixed annual premium increase for everyone, regardless of your claim history in the previous year.” Increases are typically in the region of 5-10% per annum and take medical inflation into consideration.

Direct billing is an important factor in my decision-making process as I want to avoid additional out-of-pocket payments once insured. Local providers have extensive networks for direct billing in Vietnam, but often less so outside of the country.

The opposite is often the case for International providers who tend to offer this service only at the major foreign medical facilities such as FV Hospital, Columbia Asia Hospital or Family Medical Practice. This can mean having to pay for treatment as you receive it, and then reclaiming from your insurance company later.

“One important factor often overlooked is the portability of your policy. This is especially important if you intend relocating to another country after leaving Vietnam, instead of returning home.” Quinn points out.

If you opt for a local provider in Vietnam, you must change once you leave. This can present issues if you have a covered condition as they may now become liable to exclusions. With an International plan, you can move coverage with your location, although there may be premium adjustments when you move.

“Payment options are also less flexible with local providers as they typically want payment upfront. That said, if you need a VAT invoice then this can be much easier with a Vietnamese insurer.” Quinn tells me. International providers tend to offer more flexibility, such a quarterly or biannual payments, which can help to break up the expense. But getting a VAT invoice from an International provider can be a lot harder.

Many expats are concerned about motorbike coverage when exploring their insurance options. The answer is simple – if you don’t have a license then you’re probably not covered, for both Vietnamese and International providers. The same applies if you are driving while under the influence or illegally in any way, regardless of whether the accident was your fault or not.

If you’re a regular sport player, especially those considered extreme or hazardous, then you should also ask about this when choosing your coverage plan. Most International insurers will cover you for injuries sustained whilst playing sport, whereas local providers can exclude you from many contact sports, such as football or rugby. Professional sports tend to require separate coverage and won’t be included in a typical insurance policy.

The last question I ask Quinn is why I would opt for an insurance service provider like Tenzing Pacific rather than going direct to the insurance company. He again tells me to be a smart buyer. “As a broker, our aim is to find the best package for you as an individual, not to sell you the best package for us as a company” he explains.

Local insurers will typically ask you your age, and then provide you with a quote based on this. They don’t delve into your unique needs and often have sales quotas that need to be met. “We don’t charge extra for our services, and offer unbiased advice based on a consultation and needs analysis. We also offer ongoing support at a higher level than you can expect from individual providers.” When it comes to insurance, I now consider myself a smart buyer.