While it’s easy to find health insurance policies online, it’s still not always clear how much expats should budget for health insurance in Thailand.
When you first came to Thailand you most likely had three months of health insurance cover issued from your home country. But now your travel insurance has expired and you’re living here as a long-term resident.
As a tourist, we often look for the most affordable travel insurance because those policies generally cover everything we need as a tourist.
But be careful, insurance policies in Thailand don’t always cover everything you may need.
Yes, you can definitely find cheap health policies, but I guarantee you that they will exclude many important benefits.
As a financial advisor I always recommend that people take the following steps before they buy insurance;
- First, calculate a rough insurance budget based on your income.
- Understand the main factors that affect the insurance premium.
- Finally, find the best insurance that is right for you.
Calculate your recommended health insurance budget
You’ll be happy to know that there is actually a recommended amount of money people should spend on health insurance, and it’s probably not as much as you think it is.
Whatever your situation is in Thailand, the short and simple answer is around 5% of your net income.
As an individual, your net income is basically the amount on your paycheque that you get out.
Your paycheque will already have deducted tax and some other expenses. That’s why it’s called your net income.
If you calculate 5% of your net income you should find it quite a reasonable amount, and it should act as a good starting point for your health insurance budget.
Depending on some other factors which I’ll list in the next section the final amount can be a bit higher or a bit lower.
But let me first explain why it’s not always the best idea to spend too much over your recommended health insurance budget.
Health insurance is a long-term commitment. Essentially, you’ll want your health to be covered right through retirement.
But what happens with health insurance is that sometimes people don’t get sick for years, and because they don’t claim they feel like the insurance is a waste of money.
Many people in this situation stop paying and end up with no protection at all.
Having no cover at all is a risky situation to be in, but with a bit of planning it can be avoided.
Over many years of research, insurance companies have been able to use their data to find the sweet spot where customers feel comfortable paying for their health insurance.
The average percentage was found to be around 5% of a customer’s net income.
However, this is mostly a guideline to help you get a rough idea. Before you settle on your final budget, I recommend that you look through the other factors I’ve listed below.
Your personal health insurance budget will change throughout your life because your lifestyle and needs will also change.
Factors that affect the insurance premium
Now that you’ve got a starting point for your budget, it’s time to look at some additional factors that affect the insurance premium.
First of all, the premium is the amount you pay for the insurance policy and is paid either monthly, quarterly, bi-annually, or annually.
There are many factors which affect the premium, but I’d like to discuss four specifically;
- Demographics. Age and gender have the largest impact on the premium.
- Territory, or area of policy coverage. Limiting your coverage to Thailand or a region will bring down your policy premiums a lot.
- Personal factors will vary from person to person. These factors will influence which policy you buy, and ultimately the premium cost.
- Your occupation and employer contributions.
Age and gender
In Thailand the way policy premiums are calculated varies greatly between insurance companies. However, your age and gender will generally have the largest impact.
Let me give you some examples.
I compared some policies from AIA, AXA, Pacific Cross, and Cigna, and while their premium tables are completely different, you can still observe a few interesting things.
Policies that cover the ages between 1 and 10 are very expensive, so if you have a child I’d strongly suggest that you look at multiple insurance providers.
Some policy premiums may also be more expensive based on your gender. This is also affected based on your age, so you might find that later in life you pay less compared to your gender counterpart.
Another good thing to keep in mind is that even though most insurance policies are renewed annually, the premium increase can vary a lot from company to company.
The difference between company premiums isn’t always that noticeable, so you have to look quite a few years in advance.
For example, some policies have a small premium increase every year, but then you might find that the policy premium increases a lot every 5 years.
So always keep this in mind when you receive a premium pricing table from an insurance company.
Check your current age premium like normal, but also always see how your premium changes over the next 20-30 years.
Territory of policy coverage
Traditionally, health insurance only covers the policy holder in the country where he or she is a resident.
However, lately I’ve noticed insurance companies trying to promote international cover in their more expensive plans to make policies more appealing for expats.
The insurance territory can include;
- Only Thailand
- Thailand + Asia (some exclude Japan)
- Thailand + Worldwide (excluding USA)
- Thailand + Worldwide (including USA)
But there are a few things you should know regarding insurance that has international coverage.
Firstly, for international coverage the premium increases a lot, and the benefit you receive might not be worth it.
For example, these days you can purchase an annual travel insurance pass for only a few thousand baht. Comparatively, you might be paying tens of thousands more annually for health insurance with international coverage.
Secondly, it’s not just the coverage you should consider, but also the benefits.
Having health insurance with coverage outside of Thailand can have limited benefits, meaning you don’t necessarily receive the same benefits you would receive in Thailand.
You might need pre-approval and the cover might only extend to emergencies. The specifics will be in the policy but as a precaution don’t assume that you will receive the same coverage.
Also, having international coverage doesn’t mean that you receive the same benefits as travel insurance. For example, you most likely won’t get lost baggage insurance or flight delay and cancellation insurance.
People have such different insurance needs and budgets. Therefore, if you need a certain benefit but you don’t have the budget for it, consider buying a separate policy.
Your personal factors
When you apply for an insurance policy, there will usually be some form of health and lifestyle questionnaire.
This form is used primarily by the insurance company to evaluate whether they should approve your policy or not.
However, I recommend that you also think about your health and lifestyle when you calculate your insurance budget.
The main purpose of insurance is to reduce financial uncertainty, and nobody knows what you are most uncertain about better than you.
Here are a few personal factors to consider;
- If you have a family history of any illnesses.
- Your age and the likelihood of specific diseases, such as cancer.
- How active or fit you are.
- How healthy your diet is.
- If you are the main provider in the family.
- If your dependants have any special needs.
- How stressful your occupation is.
- Your lifestyle and how likely it is to have an accident.
- Whether you smoke or drink, and how often.
- How you travel around. Distance and method of transport.
- Job stability
- Future obligations, such as a child’s education fees.
- If you need maternity coverage.
While keeping the above in mind, try to re-evaluate your current risk profile.
If you think there are factors which could negatively affect your health, it won’t hurt to increase your insurance budget by an additional 2% or more.
You can also reduce your budget if you feel quite certain about your health. However, I wouldn’t recommend reducing your total insurance budget under 4% of your net income.
There are many factors that affect the insurance premium. The trick is to realize when your personal factors change and to adjust your insurance budget accordingly.
Occupation and employer contributions
If you are looking to buy insurance, you should also know that insurance companies in Thailand reserve the right to not sell you insurance based on your occupation.
High-risk or dangerous occupations can get flagged during the application process.
If this happens, the insurance company will either decline your application or might approve it if you agree to an increased premium.
Unfortunately, there is no list out there that mentions what these occupations are.
If you are declined for having a dangerous occupation, I would recommend you just keep looking and apply at a different insurance company.
Depending on what you find, you may also just decide to pay the extra premium. You could definitely need the insurance, and paying extra isn’t necessarily a deal-breaker.
If you are an employee working for an employer in Thailand, you are most likely contributing towards a social security fund.
Employees pay 5% of their salary, capped at 750 baht a month, where the employer pays 5%-6%. Your contribution is divided up for pension, health insurance, and unemployment benefits.
But does it provide adequate health cover?
For some it might be, but for others definitely not.
Imagine owning a car. Not everyone wants to drive the same car. Some people need a faster car, some need a 6-seater car, while other people might want a more luxurious car.
The same can be said for health insurance. Thai and foreigners often pay a higher premium for improved facilities, reduced waiting times, and better benefits.
More importantly, a critical illness could easily cost more than what you are covered for with social security. Speaking with a health insurance agent can give you some tips on how to reduce this risk.
If you are looking for a more comprehensive guide on social security benefits, you can check out this other website.
Find the best insurance that is right for you
Now you should have a better idea of how much you want to spend, and which factors will influence the premium the most.
The best insurance policy for you will be a policy that has all the benefits you need and at a price close to the budget you’ve decided on.
If you aren’t sure where to start your search, check out my guide on How to find the Best Health Insurance in Thailand.
In that guide, I’ve outlined seven steps which can help you find the best insurance that is right for you.
- Step 1 – Understand policy wording and benefits
- Step 2 – Combine different policy types
- Step 3 – Choose the policy structure
- Step 4 – Calculate your insurance budget
- Step 5 – Compare insurance in your price class
- Step 6 – Choose an insurance company
- Step 7 – Choose an agent or broker
In conclusion
Tourist travel insurance and expat long-term health insurance bought in Thailand can vary greatly in price and benefits.
As an expat, you want to make sure that you buy a policy that provides the benefits you care about most, and one that doesn’t exclude anything important.
You can calculate your recommended health insurance budget by working out 5% of your net income, then adjusting your budget based on some other factors that will affect the insurance premium.
I hope this guide has helped you find a good budget for your health insurance. If you’re still not sure or you have any additional questions you can send me a message, I’d be glad to help.
