Student insurance: do your homework first

August and September are the key months when students travel overseas. Nearly 100,000 students from India travel every year to study abroad, but just about 5-6 per cent of them buy overseas travel insurance plan from India.

This is even as universities overseas insist on students having proper medical coverage of $250,000.

What happens, therefore, is that students end up shelling out huge premiums in the United States and the United Kingdom for what they could well have bought from India at one-third the price.

Indian insurers are offering the same risk cover with all additional new requirements for Rs 12,000 to Rs 15,000 against premium rates of Rs 45,000 to Rs 50,000 in the west.

"There is lack of awareness in India among students of the need for this cover and the fact that the same can be availed of from India at one-third the rates," said Sudhir Menon, head-travel insurance, ICICI Lombard.

It is mandatory in the US and the UK to have an insurance policy as the cost of health insurance is exorbitant, says Atanu Singh Mukherjee, national head for institutional relationship, Bajaj Allainz General Insuance.

What has also happened, of late, is that many foreign universities are demanding more than just medical insurance cover.

Many insist that students take risk cover that includes treatment of mental or nervous disorders. Probably the lifestyle in the west has promoted universities to insist that this coverage encompasses alcoholism or drug dependency, as well as medical expenses related to pregnancy, inter-collegiate sport injuries, cancer screening and mammography examination in addition to childcare benefits.

Universities of Massachusetts, Virginia, Purdue, Syracuse, and Polytechnic are some of the many foreign educational institutes that insist on what ICICI Lombard has recently included in its risk cover under the 'plus plan'.

Student overseas travel insurance covers available in India are university compliant as also cater to diverse needs of students studying abroad.

"As our policies are comparable to that demanded by foreign universities, they are eligible for the waiver policy, whereby the student need not buy a more expensive university policy," said Menon.

In the event that he has already paid for one, part of the fees become eligible for refund.

While US universities allow waiver of policy if a student has availed the same from India, UK universities do not. This is because of the National Health Scheme (NHS) prevalent there, which does not allow for the waiver, Menon said.

"Since NHS is, however, only applicable to government hospitals there, students can still buy risk cover from India as this would help them when they are hospitalised in private medical institutions," he added.

V Ramsaamy, general manager, United India Insurance, however, gives a word of caution that students will have to ensure that the overseas university, in which they will be pursuing their studies, will accept the insurance cover taken in India.

At the same time, by availing the Indian cover of players such as ICICI Lombard and Bajaj Allianz, students can avail of two-way compassionate visit, bail bond in case of arrest and enhanced medical benefits, in addition to medical exigencies and outpatient treatment sickness.

In case of discontinuation of studies owing to the student's illness or parent's illness, the tuition fee is reimbursed. In case of the death or injury to the sponsor, the remaining tuition fees will be reimbursed.

These are benefits that may not be included in a plan purchased from the US or the UK.

In a major move to build awareness, insurers are roping in their bancassurance partners especially at a time when banks are pushing student loans.

Students who go in for educational loans to fund their higher education overseas are our potential customers, Menon said.

Considering the way airline tickets are moving south and many airline companies are offering discounts to students. With the huge savings in medical coverage, students can purchase their air tickets too from these savings.