Travel insurance helps to cover financial losses or medical expenses that you might incur when you go on a domestic or overseas trip. The aim of this article is to explain as to what type of coverage you would need for protection against unforeseen or unpredictable events that could occur while traveling.
Travel Insurance – What Does It Cover
Mainly, travel insurance is of five categories:
– Trip cancellation
– Travel medical
– Major medical
– Emergency medical evacuation
– Accidental death/flight accident
Trip Cancellation Insurance
Trip cancellation insurance (also known as trip delay or interruption insurance) provides coverage if you or the person traveling with you have to cancel, delay or interrupt your trip.
Typically, this type of policy covers cancellation or interruption caused by the following reasons:
– Sudden business conflicts
– Visa or passport processing delay
– Change of mind
– Weather-related issues
– Illness or injury
Some of these policies might include coverage against one or more of the events listed below:
– Act of terrorism
– The cruise line, travel company or airline shutting down business
– Accident occurring on your way to the airport
– Flood or fire in your house
– Jury duty
In such cases, the insurance pays off the difference between the amount refunded by the vendor and the original amount paid by you. Therefore, you should not purchase this type of insurance from the carrier you bought the trip. This way, you will remain protected even if something goes wrong during the trip or the carrier happens to go out of business.
Travel and Major Medical Insurance
They both provide protection in the event of you becoming ill or sustaining injuries when traveling. However, they differ when it comes to the duration of coverage.
Travel medical insurance offers medical coverage only for a short duration of time. Depending on the policy you choose, the duration of coverage may range from five days to one year. On the other hand, you can opt for the major medical insurance if you are planning travel for six to twelve months or longer.
Travel medical and major medical insurance policies provide coverage against medical expenses associated with doctors, hospitals, foreign-language services if you happen to fall ill or sustain injuries, and healthcare facilities, among others. Irrespective of whether you buy medical insurance separately or have one already, you need to ascertain if prior approval from the insurance company is required for any medical care.
Further, you must check and ensure as to what pre-existing medical conditions are excluded prior to buying any of these types of insurance policies. You read through the fine print to have a clear understanding as to what they cover and what they do not.
Emergency Medical Evacuation Insurance
This type of medical insurance covers the expenses associated with medical evacuation and transportation to a medical facility. Such expenses can add up to out of pocket expenses of as much as $10,000 if you do not have sufficient coverage. The emergency medical evacuation insurance comes in extremely handy if you happen to be stranded in one of the remotest rural areas without any kind of access to facilities.
Flight Accident and Accidental Death Insurance
Such insurance provide financial benefits to the survivors as in the case of life insurance. Benefits are given out if an accident results in you sustaining serious injuries or your death.
Specialized Coverage
More specialized types of travel insurance are also available. These include insurance packages that are designed to meet the specific needs of business travelers, expatriates or extreme athletes. As such, if you are likely to participate in extreme or high-risk sports when you are on a overseas vacation, then you must select an insurance policy that is designed specifically to provide cover to you in the event of you sustaining a sports-related injury. This might prove to be more cost-effective in your case.
How to Purchase Travel Insurance
There are three ways in which you can purchase travel insurance:
Per-trip Coverage
This is the most commonly purchased travel insurance. According to the Travel Insurance Association in the U.S., 80 percent of all travel insurance purchased is per-trip coverage policies. This is for travelers that don’t travel frequently and it provides coverage for one trip.
Multi-trip Coverage
Multi-trip coverage policies provide protection if you travel many times in a year. However, each trip should not last for more than 30 days.
Annual Policy
If you are a frequent traveler, then this type of a policy would provide better coverage. It provides coverage for the whole year.
Having said this, it is important for you to make sure that travel insurance companies are not over charging you. In order to ensure this, you must buy travel insurance only from a reputed insurance company.
Travel Insurance Coverage – Do You Really Need It
You need to ask yourself many questions in order to decide as to whether you need to buy travel insurance at and what type of insurance should you buy. Some of the questions are listed below:
– Are you traveling overseas?
– Are you likely to involve in extreme sports?
– Will it possible for you pay for a trip back home in the event of an emergency?
– If you or a person traveling with you becomes sick, will it be possible for you to pay for the medical care?
Such problems have the ability to make your dream vacation a nightmare, especially if you don’t have proper insurance coverage. In order to decide whether you should purchase travel insurance or not, consider some of these scenarios.
Additionally, you must familiarize yourself with the cancellation policies of tourism cruise lines, hotels and other such travel service providers. It is also important that you review your existing policies as well as agreements with your credit card companies. This is because some credit card companies include coverage for certain situations like loss of luggage, car rental liability, etc., among others. Further, you must also familiarize yourself with price schedules, terms and conditions and exclusions associated with the policy you choose.