Travel insurance is a combination of trip-cancellation insurance and 24-hour emergency assistance. It helps you get your money back if, for example, you have to cancel your vacation or go home early. It's a smart purchase if you've planned a major holiday well in advance, but the trick is knowing which policy to buy.
Travelling can be exciting and rewarding, but it can also be expensive when the unexpected occurs far from home such as sickness or injury, travel delay, baggage loss, or worse. In the past decade medical costs have increased dramatically worldwide and even countries with subsidized National Health plans now demand payment in full from foreign visitors for medical services rendered. At the same time travel suppliers such as airlines, and tour operators worldwide have made cancellation policies more restrictive, so if you have to cancel a trip it's likely that a substantial portion of your pre-paid travel expenses will not be refunded, and if you have to interrupt a trip mid-way, a last minute, one-way economy fare return-flight is now likely to be more costly than ever. Moreover, the reality of global terrorism, increased travel industry bankruptcies, global economic instability, and the overall unpredictability of life today causes many people to seek ways to minimize the unique financial risks associated with travel.
As a result, savvy travellers purchase travel insurance in order to protect against the potentially staggering financial costs resulting from crises such as the cancellation of a big trip due to death or illness of a family member or a required emergency medical evacuation.
Step 1: Check your existing insurance policies and credit card coverage before you buy travel insurance. You may already be covered for medical expenses, canceled tickets or lost luggage.
Step 2: Decide which type of travel insurance is best suited for your destination (for example, terrorism insurance for your trip to Egypt, or emergency medical transportation insurance during your ocean cruise). Keep in mind that the cost varies widely, depending on your age, your health, and the cost and length of your trip.
Step 3: Determine whether the following is included in your policy: international medical insurance, emergency medical evacuation (including helicopter transport), accidental death and dismemberment, repatriation of remains and family travel benefits.
Step 4: Make sure your travel insurance provider offers 24-hour hotline service. Don't buy trip-cancellation insurance from the tour operator that may be responsible for the cancellation, and don't overbuy - you won't be reimbursed for more than the cost of your trip.
What to Look For:
- Baggage loss/delay insurance
- International medical insurance
- Emergency medical evacuation
- Accidental death and dismemberment
- Repatriation of remains
- Family travel benefits
- 24-hour hotline service
Basic Plan Types
There are many types of travel insurance and choosing the right plan can be confusing. Becoming familiar with the basic types of plans and the specialized terms will make it easier to compare plans, and ultimately choose the right plan for your needs. In effect, there are five major categories:
- Accidental Death & Dismemberment (AD&D)
- Trip Protection
- International Medical Insurance
- Annual Medical
- Emergency Medical Evacuation.
Accidental Death & Dismemberment (AD&D) insurance pays the insured or its beneficiary a substantial lump sum benefit when an accident results in death or the loss of a body part. Often people think travel insurance means flight accident insurance. Flight accident insurance is a type of AD&D that pays a benefit only when an airplane accident results in death or the loss of a body part. Common Carrier AD&D is a type of AD&D that pays a benefit only when an accident involving a common carrier results in death or the loss of a body part. Finally, the broadest type of AD&D is 24-Hour AD&D which pays a benefit when any accident results in death or the loss of a body part so long as the accident occurs during a covered trip. Accidents due to terrorism may or may not be covered depending on the policy. Acts of war, and nuclear, chemical, and biological attacks are usually excluded, but policies that waive the exclusions can be purchased at a considerable cost.
Trip Protection Plans typically reimburse your non-reimbursed travel expenses if an emergency (death, sickness, airline strike, travel company bankruptcy, etc.) occurs right before or during your trip causing it to be canceled, interrupted or delayed. Often these plans include travel assistance services, coverage for lost or damaged baggage, as well as minimal coverage for incurred medical expenses. Although the maximum benefit limits for medical expenses may be relatively low, often there is no deductible or co-pay. Usually travel protection plans are sold on a per-trip or single-trip basis but some plans can be purchased on an annual multi-trip. Annual multi-trip travel protection plans offer all of the benefits of single-trip protection plans except annual multi-trip plans almost never cover trip cancellation. Trip protection plans typically reimburse your non-refundable travel expenses if an unexpected crises (e.g., death, sickness, airline strike, travel company bankruptcy, among other crises) occurs before or during your trip causing it to be cancelled, interrupted or delayed. Plans often provide reimbursement for:
- Trip cancellation, interruption & delay
- Baggage loss and delay
- Emergency medical expenses
- Emergency medical evacuation
- Accidental death and dismemberment (AD&D)
- Repatriation of remains
- Travel assistance services
Although the maximum benefit limits for medical expenses are generally not as high as in Travel Medical Insurance, many companies have recently increased these benefits and there is usually no deductible or co-pay.
Rental car insurance, also known as collision damage waiver (CDW), may be included, or purchased as an upgrade, or purchased separately as a stand-alone plan.
International Medical Insurance is medical insurance designed to reimburse you for medical expenses incurred when you are travelling or living in a foreign country for two weeks to two years. Maximum policy coverage levels can be substantial enough to cover major medical expenses such as emergency surgery and extended hospital stays. Medical insurance coverage is generally subject to the specified deductible/excess. Plans may include emergency evacuation, reunion, and repatriation benefits, as well as AD&D and travel assistance services. The plans allow you to choose the maximum policy coverage level and deductible, which affects the premiums, giving you more control over costs than is the case with travel protection plans. Some plans are renewable up to a maximum of 24 consecutive months.
Emergency Medical Evacuation protection covers the cost of a transporting a seriously injured or ill person to an adequate medical facility, a hospital near home, or the hospital of their choice, depending on the plan. This coverage is usually included with both international medical insurance and travel protection plans, but unlike baggage insurance and trip cancellation insurance, it is also sold separately. Emergency medical evacuations are always expensive and sufficient coverage is recommended, especially for long-distance trips. However, note that there is often limited or excluded coverage for pre-existing conditions.
International Accident Insurance (also known as Accidental Death and Dismemberment or AD&D) is annually renewable insurance that pays a lump sum benefit to the insured's beneficiary in the event of the insured's death or loss of a body part or function due to accident (as opposed to sickness). AD&D is typically less expensive than life insurance and may be purchased in addition to a life insurance policy to substantially increase the benefit payable to the beneficiary if the insured dies as a result of an accident. An Accidental Permanent Total Disability (APTD) benefit may be available for additional premium. Death due to War or Terrorism is usually excluded but an Optional War & Terrorism Rider is often available for additional premium. Coverage for travel to war zones is available for journalists, contractors, and relief workers. Where travel to high risk countries and/or participation in extreme sports or hazardous activities is contemplated, premiums will be adjusted accordingly. In most cases coverage is available regardless of the insured's nationality and country of residence.
Inspired Travel Worldwide offers comprehensive policies designed to suit your needs, including:
- Cover for cancellation fees from the time your policy is purchased
- 24/7 Access to Emergency Assistance
- Unlimited overseas medical cover as repatriation costs have exceeded $300,000 from USA and $60,000 from Bali
- Automatic acceptance of many pre-existing medical conditions
- The flexibility to increase cover, including:
- - Cover for pre-existing medical conditions*
- - Increase luggage item limits
- - Increase Rental Car Insurance Excess**
To download the brochure for full details and application form, click here
* Subject to Acceptance
** Not available under the Business Travel Insurance