What Kind of Travel Insurance Do I Need?

After you have your travel plans made and the tickets purchased, you’re all set, right? Hold on. What about travel insurance?

Insurers offer two different kinds of travel insurance. One is insurance against trip cancellation called package plans, and the other is insurance against medical emergencies called travel medical insurance. Both plans are known by many different names. The kind you need depends on many factors. Where are you traveling? When are you leaving? Do you want insurance against trip cancellation or suspension? Do you need insurance against accidents or medical expenses?

Package Plans
Package plans, also known as comprehensive trip insurance, travel insurance, vacation insurance or trip cancellation insurance, are what many people think of when they say travel insurance. This type of plan protects against cancellations, interruption, hurricanes, medical emergencies, evacuation, lost, stolen and delayed luggage and many other types of inconveniences. In general, it is for the traveler who is worried about losing money because of a cancelled trip.

The different package plans come with different layers of coverage. For example, will you be flying, renting a car, doing ordinary touristy things or adventure activities such as skiing, hang gliding or ski diving, what is the value of the items or devices you are taking with you, and how long is your trip?

You need to read the policy carefully and pay close attention to what is not covered. Be very careful to list any prior medical conditions; sport and adventure activities with high risk such as rafting, mountain climbing and skydiving; and travel to high-risk countries or countries warned against by your government. If you plan to use any kind of motorized vehicle (car, motorcycles, jet skis, moped) check to see what restrictions may apply (wearing a crash helmet or seat belt, having an international driver’s license). Don’t depend solely on your credit card for deductible/excess prices; be sure a reasonable amount is included in your package plan. Your credit card may not cover the deductible if you rent the vehicle with another card. Many policies will not cover you if you are acting under the influence of drugs or alcohol.

Medical Coverage
Travel, even to cheap vacation spots, can have unexpected medical emergencies. A fall, an infection or a measles outbreak can add up to thousands of dollars in medical expenses. Be prepared by purchasing good medical coverage.

Medical insurance policies cover emergency medical treatment and possibly dental, medical transportation, emergency medical evacuation, accidental death or dismemberment coverage, and repatriation to your home country in the event of your death. Read the fine print to understand what their definition of a pre-existing condition is and don’t consider less than $50,000 in coverage. This may sound exorbitant, but medical costs can soar when you are in another country. Some travelers purchase additional medical evacuation plans that cover emergency medical evacuations and international security evacuations.

Companies for Travel Insurance
The following companies occur frequently in research for travel insurance. Please note that this is not an endorsement of or recommendation for these companies.
World Nomads offers full medical coverage, especially for adventure travelers. They also offer trip cancellation or interruption coverage.

Travelex Insurance is appropriate for families. Children under 18 are covered for free if traveling with an adult who is covered. They offer many upgrades, additional medical and dental, and rental car collision insurance.

Seven Corners serves for frequent travelers, government employees and corporations and has a wide range of medical customization plans. The company offers a $1 million medical maximum and the option to add hazardous sport policy is available.

Allianz Global Assistance, part of the Allianz SE group, is one of the largest travel insurance companies with competitive rates. Due to the scale of its parent company, it can offer good rates and good coverage.

Again, carefully read the policies and decide what is best for your needs. Some companies may have flexibility built in, allowing you to customize your coverage.

Final Thoughts
For the frequent traveler, it may make sense to purchase an annual policy. Annual policies are far more cost effective, but they are not for the individual or family traveling just once a year.
Group policies tend to save more money than individual policies. Adults over 65 pay higher rates than other travelers. Carefully consider what deductible you are comfortable with. The higher the deductible, the lower the premium. Always seek competitive quotes with several agents or online.

Conclusions
Savvy travelers believe that if you can’t afford travel insurance, you can’t afford to travel. It is always better to be prepared than to risk being financially ruined by the unexpected. Tragedies or medical emergencies happen, even though you hope they won’t. It’s far better to spend a few hundred dollars extra so you can relax and thoroughly enjoy your trip. ■

Sources clubthrifty.com, forbes.com and ytravelblog.com.