As the coronavirus spreads across China and a growing number of cases are being confirmed around the world (latest figures from CNBC), our thoughts naturally turn to our health and just how important it is.
As the American humourist Josh Billings famously said, “Health is like money, we never have a true idea of its value until we lose it.” Of course those words always ring true but they certainly become more pertinent at times like this in the face of a very tangible threat to our wellbeing.
Who hasn’t read about the alarming spread of this nasty disease and not pondered, even briefly, their own mortality? Death suddenly doesn’t seem such a remote prospect and that brings alarming clarity and focus to the mind. We react by going into protection mode. We don masks, safeguard our health, and start stockpiling food, water and supplies to ensure we have the essentials necessary to sustain ourselves should the situation deteriorate. But we may not have considered protecting our finances.
The coronavirus has caused me and colleagues in my industry to reflect anew on the importance of protection. I have long been of the opinion that financial planning is, at its core, about peace of mind. Which is precisely why medical insurance and protecting both yourself and your family is page one, chapter one of the financial planning manual.
When you take out medical insurance you are essentially insuring yourself against bankruptcy in the event of a medical emergency by transferring any liability for healthcare that you may need in the future to an insurer.
And while that may sound extreme, it is not hyperbole to talk about bankruptcy. Just think about the cost of spending even a relatively short time in a Chinese hospital. Here are some figures to ponder:
- 1 night in a public hospital – CNY 50
- 1 night in a public hospital VIP ward – CNY 2,000- CNY 4,000
- 1 night in a private hospital – CNY 4,000 – CNY 6,000
- 1 night in a high cost provider – CNY 6,000 – CNY 10,000
On that basis, just one week’s stay in one of China’s top hospitals will cost upwards of CNY 70,000, without even taking into account the cost of any care or treatment you require.
It’s easy to see just how quickly savings or emergency funds could be eaten up if you have to cover these costs from your own pocket. And what if you don’t have savings or an emergency fund? Your options are bankruptcy or relying on a family member to bail you out in your time of need.
The latter option is not removing the risk but simply transferring it to someone else. You may be a risk taker and genuinely feel comfortable with no medical insurance and the risk of bankruptcy, however if you’re relying on someone to bail you out in a worst-case scenario, you are laying a heavy burden on them. They may not be a risk taker, yet it is them that will pay the price for your laissez-faire attitude.
Like many risks, the risk of incurring onerous medical costs can be mitigated. That is what a good medical insurance policy does. Even a basic level of insurance, such as inpatient cover, will go a long way towards limiting your exposure and giving you peace of mind. It would potentially cover any costs of hospitalisation which is where the costs really start to mount up.
If keeping your premiums affordable is a concern you could also look at country-specific insurance, for example cover in mainland China, if that is your country of residence, as opposed to a more expensive international policy.
Don’t let the fear of high premiums put you off taking out medical insurance when the consequences of not having it could be so disastrous. There are solutions to fit every pocket. While the coronavirus has shone the spotlight on this issue, and probably isn’t going away any time soon, it’s far from the only risk to your health. Any illness or accident could pose a threat to your finances which is why medical insurance is an absolute must-have for all expats living in China, and elsewhere in Asia.
If you would like further guidance on the best medical insurance policy for you then be sure to get in touch at jordan.donald@infinitysolutions.com.
Financial Consultant
I work as a Financial Planner with expat clients to meet their financial planning needs and goals, with a focus on adequately protecting expats & their families, and helping people to grow their savings over the long term. I strongly believe in building meaningful and lasting relationships with clients to ensure the best client outcomes are achieved.
