Special Report on Private Health: Some soothing home thoughts from abroad: Paul Durman reports on the fast-expanding demand for overseas insurance packages

FOR ANYONE working or living abroad, the possibility of falling sick can be particularly worrying. Quite apart from the need to meet the cost of medical care, language difficulties and a lack of familiarity with the local healthcare system may present additional problems.

Recognising the special needs of expatriates, medical insurers have devised international benefits plans. The market is conservatively estimated to be worth pounds 250m a year and growing.

More and more employers - and it is employers who tend to be the insurers' customers - are moving to international benefit contracts in preference to a UK medical insurance scheme, or a similar arrangement in the country of residence. BT and Cable & Wireless are among the large companies that have an international plan.

Bupa, which has a big chunk of the international market, says there is also a lot of interest from individuals. More self-employed people are working overseas - computer consultants, for example. There is also demand from retired people who live abroad.

Mike Jones, the manager of Bupa's international centre, says an individual contract may also be appropriate for employers who have too few employees working overseas to make it worthwhile organising a company plan.

Relying on a UK medical insurance programme does not provide the emergency evacuation services that international plans offer. Conversely, a host country scheme will not typically allow for treatment in the UK. Many people prefer treatment in the UK, where they will be nearer family and friends.

Travel insurance might seem another option, but it is only intended accidents and emergencies, and does not offer cover for the range of problems typically insured by a specialist medical plan. For large companies, another option is self-insurance, where the employer bears the medical costs. But the employer may lack the expertise to deal with other than routine problems.

With so many hospitals around the world, it is not feasible to limit the choice of facilities that policy beneficiaries can use. Peter Taylor, of Cigna Employee Benefits, which concentrates on the corporate market, said: 'It's impossible to maintain a world-wide bed directory. We give complete freedom of choice.'

Insurers develop relationships with some hospitals, allowing them to negotiate better rates. Bupa, for example, has been able to negotiate better deals with some hospitals on the Spanish costas. Such arrangements make it easier for insurers to settle medical bills direct with the hospital. More usually, the patient will pay the bill and then seek reimbursement from the insurer.

The cost will depend on the country or region where the expatriate is living. In the US, more use is made of more technologically advanced forms of treatment which makes treatment more expensive. For a company with 30 to 59 employees in Africa, Bupa will charge a premium of pounds 313 a head. The same package in North America would cost pounds 729 a head.