Travel Medical Insurance

Travel Medical Insurance

     After you have filled out the Travel Medical Insurance application, the agent will decide whether to accept it. If he or she does not believe you will be an acceptable risk under the guidelines of the insurance company, your application may be rejected then and there. In such case, there is obviously no contract. If the application is acceptable to the agent, you and the agent will discuss important matters such as the terms of the contract (see below) and the price.

     At that point, if you wish to be obligated (bound), a contract may or may not occur, depending on which of the following two Travel Medical Insurance scenarios occurs.

Scenarios 1: Binder

If he or she has authority from the Travel Medical Insurance company, the agent may fill out a document obligating the company to provide immediate coverage. This may occur even before you have actually paid any part of the premium. This document is called a binder, and it will remain in effect until the actual policy is issued. Once a binder has been issued and accepted, a contract exists between you and the insurance company the agent represents. Travel Medical Insurance agents often have the power to bind the company. Life and health insurance agents usually do not. If your agents agrees to give you a binder, make sure it is in writing. In that way, a Travel Medical Insurance agent won’t be able to say, “Binder, what binder?” in the event you have a claim. (If you are given an oral binder, be sure to write down what was said, the time it was said, and who said it. Then, make sure you get a written copy of the binder as fast as possible. You might even write a confirming letter yourself, just to be sure—see Chapter 40.)

Scenario 2: No Binder

If the agent does not have the power to bind the company or chooses not to do so, the agent will merely accept the application and send it to the insurance company for underwriting. During this period, a contract does not exist because the insurance company, through its agent, has not promised to do anything of value; all it has agreed to do is review the application. During this time period, you may be requested to do some things to help the insurance company make a decision about whether to insure you and/or how much to charge.