The More You Know: Knowing Which Insurance to Buy When Travelling Abroad

It can be a difficult thing looking for insurance, but taking the time to ensure you purchase the right plan can save you money in the long run. Travelling and insurance can be even more complex as you’ve got to consider the local laws, health systems and how comprehensive and portable your medical coverage is. 

Travel insurance can make things simple, but what if short term cover is not appropriate for you?

This article, by leading international insurance broker UAE Medical Insurance, explains what your health insurance options are when heading overseas and why one may be more appropriate than others, depending on your needs. 

Travel insurance

If you’ve ever travelled before, you’ll know a thing or two about travel insurance. It’s the most common product offered to anyone travelling overseas and is generally cheap and simple. Your typical travel insurance benefits will include:

• Flight cancellations 
• Travel delays 
• Emergency medical expenses, or necessary medical evacuations 
• Repatriation costs 
• Accidental death and dismemberment 

Travel policies are often better for short term travellers, normally covering up to 3 months but some insurers can provide travel coverage for up to 12. 

The added advantage of travel plans is that they cover you for things such as lost travel documents and flight delays, however the health benefit components are generally less comprehensive. The main aim of travel plans is to get you healthy enough to return home.

The other advantage of a travel plan is that they are often the least expensive health coverage option when abroad. 

They’re readily available from most airlines and travel agents who can add the cost to your whole booking fee, and include the documentation with your tickets. Keep in mind that travel plans often exclude pre-existing conditions, charge more for certain regions of the world, and don’t reimburse you if you cancel your trip. 

Local healthcare coverage

Relying on the local healthcare system of the country you’re visiting can be a mixed-bag, and really depends on the type of system the government provides:

• Free, state funded health cover 
• Compulsory state provided insurance 
• Optional or mandatory private medical insurance coverage 

Some countries, such as the UK, can provide tourists with fantastic medical coverage at virtually no cost (through its nationalised NHS system). 

France’s Couverture Maladie Universelle is paid through compulsory deductions from employee wages, so working expats can attend healthcare facilities like a French national would. Finally, countries like the US and Dubai, legally require you to hold private medical insurance for entry.

If you’re a mid-to-long term traveller, purchasing a health insurance plan from the country you’re based in can make more sense. 

They’re like purchasing cover in your home country and can come with a range of comprehensive benefits from inpatient and outpatient care, to vision, dental and even maternity coverage. Local plans will be more expensive than travel plans and will often only cover you for the country you’re in.

Many of you enjoying travel in your later years will also need to be aware that some insurers will either increase the premium for older customers, or may even flat out deny coverage altogether (retirees in places like Nicaragua will find it impossible to find local insurance). 

Pre-existing conditions can be difficult to find coverage for, and you’ll also want to consider the state of the health system in the country you’re in.

International medical insurance

International medical plans are the most comprehensive form of insurance you’ll find on the market, however they do come with a hefty price tag. They’re designed especially for longer-term expats, both working and retirees, and can include the following benefits:

• Extensive medical coverage both in your home country and abroad 
• Options to add dental, maternity and wellness benefits at an extra cost 
• A wider choice of private and semi-private hospitals, medical staff and care options to choose from 

These plans are the most useful for travellers as they will often act as one policy that can cover nearly all of the countries you can think to visit. 

This can make for a lot less stress when booking trips and heading to other places, and you’re often guaranteed to have access to the best healthcare facilities and professionals available in a country should you need it.

Older travellers will find international insurance plans to be the most flexible out there; allowing you to tailor your coverage and benefits to something that best suits your needs. 

Insurers will be more open to accepting applications containing pre-existing conditions, however you should always be clear about what coverage you need when applying.

Author bio: Choosing the right option for you

Nobody knows your situation and needs like you do, but it can be a good idea to talk things through with an insurance expert. Broker UAE Medical Insurance (UMI) has been providing high quality health insurance to expats both in the UAE and around the world for more than 15 years. Their expert team strive to deliver fantastic insurance solutions with exceptional customer service.

To find out how the UMI team can help you save money on your insurance needs abroad, contact them today!

First-Time Homebuyers: How Your Mortgage Will Affect Your Personal Finances

When you're used to paying rent every month, it can be easy to think of a mortgage as more of the same: a monthly expense for housing. 

The truth is a mortgage can affect your personal finances in many ways that rent cannot, including saving up for your down payment and closing costs, ongoing maintenance and repairs, and your tax liability. 

Also as a renter, you are usually not responsible for any major updates and repairs. As a homeowner though, you will also be financially responsible for any home updates and repairs for the duration of your homeownership. Here's what you should know.

Saving for a Down Payment

The best way to clear your path to homeownership and keep your loan payment affordable is saving up for a down payment. 

If you choose a conventional mortgage, you will need a down payment of at least 20% to avoid private mortgage insurance (PMI) in most cases. PMI is a type of insurance that protects the lender if you default and it can add $150 or more to your payment. 

With an FHA loan, you will need a down payment of at least 3.5%, but you will need to pay two mortgage insurance premiums (MIPs) if you put down less than 20%. 

The upfront (MIP) of 1.75% is due at closing while the annual 0.85% MIP is automatically added to your monthly mortgage payments for the life of your loan.

If you don't have much saved for a down payment, a USDA mortgage may be a good option, according to USA Peak Loans. 

This loan option is designed for low to moderate income buyers buying in "rural" and suburban areas. USDA mortgages do not require a down payment.

Budget for Maintenance Expenses

For first-time buyers, one of the most overlooked costs of buying a home is the cost of maintaining the house. 

Expenses like lawn care, trash removal, plumbing repairs, and roof replacement add up over time. According to the Las Vegas Review-Journal, the average $350,000 American home costs $1,126 per month to maintain -- although this includes homeowner's insurance, property taxes, and utilities. 

A good rule of thumb is budgeting at least 1% of your home's value per year to spend on general maintenance and repairs like plumbing leaks, HVAC servicing, and roof repairs.

Owning a Home Can Offer Tax Breaks

While this may not affect your day-to-day budget, buying a home and taking out a mortgage can offer many tax breaks not available as a renter. Owning a home can reduce your tax liability in the following ways:

• Mortgage interest deduction, which is especially beneficial with new loans as the interest payments are higher 
• Mortgage points deduction 
• Mortgage Credit Certificate Program allows you to get a tax credit (not deduction_ worth up to 30% of the interest you pay every year. This program is available from many local and state governments for lower income first-time buyers. 
• Real estate tax deduction 
• Tax-free IRA withdrawals for first-time homebuyers to avoid the 10% penalty normally applied to early withdrawals 
• Deduction for interest on home equity lines of credit (HELOCs) and home equity loans to finance home improvements 

A home loan can affect your finances in many ways, both good and bad. It all comes down to how well you manage your finances each month. And hopefully you didn’t buy a home with a mortgage payment that you can’t afford in the long run. 

While owning your own home means being solely responsible for the property taxes, maintenance, and repairs, your mortgage can also be the gateway to better credit, tax breaks, and financial stability.

5 Ways You Might Be Sabotaging Your Mortgage Preapproval

If you're beginning the process of buying a home, obtaining a mortgage preapproval is one of the first key steps. Real estate agents often require a preapproval letter before showing homes to potential clients. 

With preapproval, you'll fill out a mortgage application from your chosen lender and pay the requisite application fee. You'll also need to provide documents that prove your income, and the lender will check your credit score. 

Here are five of the most common mistakes that potential homebuyers make during the preapproval process, and how to correct them in time to avoid sabotaging your mortgage during the early stages.

1. Not Knowing Your Credit Score

For most lenders, you'll need a FICO credit score of at least 620 to qualify for a mortgage, and a score of over 700 will qualify you for the best rates. 

Experts recommend checking your credit at least six months before you plan to apply for a mortgage preapproval. This gives you time to take necessary steps to raise your score before beginning the home buying process, such as paying down debt and disputing incorrect information on your credit report. 

Improving your score will not only help ensure you get approved, but potentially save you thousands over the life of the loan.

2. Making a Large Credit Purchase

You've already gotten your preapproval and had an offer accepted on your home, so it's time to finance your new furniture, right? 

Not if you want to qualify for a mortgage. According to industry blog My Mortgage Insider, Fannie Mae and Freddie Mac now require credit to be pulled again 48 hours before closing. 

If there are major changes, it could affect the lender's willingness to provide final loan approval.

3. Paying Off the Wrong Debts

You know that you have to get rid of some of your debt before you'll get approved for a mortgage, since your debt to income ratio should ideally be below 30 percent. 

According to Nerd Wallet, some aspiring home buyers waste money paying off old debts that are no longer collectible and won't affect mortgage approval. 

Instead, focus on paying down credit cards with a large balance in order to obtain the magical 30 percent ratio.

4. Missing Loan Payments

Make sure to keep paying all your credit cards and other loan obligations on time from the time you're applying for preapproval to the time you close on your home. 

Missing a payment in this period can jeopardize your mortgage loan by damaging your payment history and thus lowering your credit score.

5. Not Having Cash on Hand

In most cases, you'll need to show the lender that you have the required down payment funds plus three months' reserve in your bank accounts. 

If you're planning to cash out investment accounts to purchase a home, do so sooner rather than later so the funds will be in your account.

Buying a home is a great step, but it can be set back greatly by unwise choices surrounding the mortgage preapproval process. By keeping these five tips in mind, you're helping ensure that the mortgage approval process will go smoothly.

What's the Difference Between a Bank Loan and a Title Loan?

Many people experience a situation in which they need cash to make a purchase, but they do not have enough on hand. 

A bank loan or title loan can be used to generate an influx of cash for a situation such as a home repair or payment of a medical bill. 

There are some important differences between bank loans and title loans that you should understand before signing your name on the dotted line.

Bank Loan Requirements

Bank loans are provided by a lending institution that must operate under the terms of federal laws for interest rates and other loan terms. 

In order to get a bank loan, you may have to provide proof of your ability to repay the loan. This would come from copies of your pay stubs. If your income is low, you may need to have a co-signer. 

The bank will also check your credit score. A low credit score can mean a high interest rate.

Prerequisites for Bank Loans

Banks will scrutinize your finances and calculate your income to debt ratio before agreeing to a loan. 

The bank loan can be secured, such as with a mortgage. In a secured loan like a mortgage, the deed to your house would go to the bank if you fail to pay. In an unsecured loan, the bank is taking a gamble on your personal finances. 

The interest rate for an unsecured bank loan is usually higher than the interest for a secured loan.

Title Loan Terms

The terms of a title loan are different from a bank loan. With a title loan, the title to a piece of property owned by you secures the cash that is loaned to you. 

For example, you could put up the title of your car. If you fail to repay the loan, the lender gets the title of your vehicle. To get a title loan, you must own the property free and clear. 

Some companies, like American Cash Advance and Title Loan, know that the property cannot have any liens on it. Title loans also come with interest fees, which can be tied to your credit score.

Before taking out a loan, be sure to read all of the fine print. You will need to know the terms of the loan, such as payment schedules and what could happen if you miss even one payment. 

Understanding how these loans work will help you to make the best financial choice for your situation.