Traveling to different places is always fun, but it comes with certain risks and uncertainties. While it may not be worth purchasing travel insurance for inexpensive trips, for the vast majority of trips, you should definitely consider purchasing travel insurance. In fact, more and more consumers are purchasing trip insurance..
Travel Insurance Types
As several different types of travel insurance plans are available on the market, knowing how to find the best travel insurance can be very helpful.
There are primarily two types of travel insurance plans available on the market:
Travel Medical Insurance: Primarily focused on unexpected medical conditions, injuries, or accidents that may occur after the effective date of the policy. Such policies are available only for international trips and cover the duration of the trip. There is no coverage before the trip.
If you will be traveling only once or twice a year, or for a longer duration, you should purchase single-trip travel medical insurance.
However, if you will be traveling three or four times a year or more frequently, and each trip is of a relatively a short duration (maximum of 30 or 45 days per trip), you should consider purchasing annual travel insurance, which would cover multiple trips throughout the year.
Travel medical insurance with features specifically attractive to visitors to the U.S. is also called visitors insurance. Such customers are typically interested in a plan with a PPO network, coverage for acute onset of pre-existing conditions, and flexibility to extend or cancel the insurance plan after the effective date of the policy. Such consumers typically are of older age and stay in the U.S. for a longer duration.
Trip Cancellation Insurance: In addition to covering emergency medical expenses while on the trip, it primarily provides coverage for trip cancellation before the trip for your prepaid, non-refundable trip costs in case you needed to cancel the trip for a covered reason mentioned in the policy. Additionally, it would provide trip interruption coverage while on the trip in case you need to go home early for a covered reason.
If you want more flexibility, Cancel for Any Reason (CFAR) travel insurance plans, in which you don't have to provide any valid reason to cancel your trip, are also available. Such coverage is available only if you buy the insurance within a certain duration of your initial trip deposit and insure the entire trip cost. You have to cancel your trip at least 48 hours in advance, and you typically get 75% of your prepaid, non-refundable trip costs back. Depending upon the trip insurance plan, such coverage may already be included or available for purchase at an additional cost.
While travel medical insurance is available only for international trips, trip cancellation insurance is available for international as well as domestic trips. Many of the trip cancellation insurance plans are available only to U.S. residents, but some are available for non-U.S. residents, as well.
Common Coverages in Travel Insurance Plans
Whether you purchase travel medical insurance or trip cancellation insurance, many coverages are similar in both types of travel insurance plans, described below:
- Emergency Medical Evacuation: If you were to get seriously sick or injured and your current location cannot provide adequate care, it would provide transportation to the nearest place where adequate care can be given.
- Return of Mortal Remains: In case of the unfortunate event of the traveler's death, return of mortal remains would provide coverage for the transportation of mortal remains to the home country. Due to popular demand, many travel insurance plans, especially for visitors to the U.S., also provide coverage for local cremation, as Hindus don't bury the body (except for infants) but do the cremation.
- Trip Interruption: While in trip cancellation insurance plans, trip interruption coverage is usually 150% or 100% of the insured trip cost, it is a flat amount such as $5,000 in travel medical insurance plans. The exact reasons for which you can be covered to go back home early are slightly different in each type of travel insurance.
- Accidental Death & Dismemberment (AD&D): In case of accidental death or dismemberment while on the trip, travel insurance plans would provide a certain lump sum amount as a benefit. The exact amount may vary by the plan, and additional coverage may be available in some plans. It is a kind short-term life insurance benefit. "Dismemberment" means losing one or two hands, one or two feet, limbs, eyesight, hearing, or speech.
Some trip cancellation insurance plans provide optional rental car coverage. The premiums are usually per day of rental car. You should also check with your existing auto insurance policy to see whether you already have such coverage.
What Factors Determine Travel Insurance Cost?
- Age: Generally, the insurance plan would cost more for older people compared to younger people.
- Destination or Coverage Area: Depending upon where you are traveling to, the cost would vary. While healthcare is extremely expensive in the U.S., it is significantly cheaper in India or Vietnam.
- Trip Length: The longer the duration for which you need coverage, the higher it would cost.
Additionally, for travel medical insurance:
- Policy Maximum: Various policy maximums are available. The insurance company would pay for the eligible medical expenses up to the selected policy maximum. Naturally, it would cost more for a higher policy maximum.
- Deductible: Choices of various deductibles are available, which is the amount you would have to pay out of pocket before the insurance company begins paying for covered expenses. Therefore, the higher the deductible, the lower the premium.
- Optional coverages: If you would like to cover hazardous sports, non-medical emergency evacuation, additional Accidental Death & Dismemberment (AD&D) coverage, etc., it would cost more.
- Coverage Type: If you would like to purchase comprehensive coverage, it will cost more compared to fixed coverage, which has sub-limits for each and every benefit. This is a lot more prevalent for visitors insurance for the U.S.
Additionally, for trip cancellation insurance:
- Trip cost: If you would like to insure higher trip costs, travel insurance would cost more.
- Optional coverages: If you would like to add optional coverages such as medical upgrade, cancel for any reason, etc., it would cost more.
How to Get Travel Insurance Coverage
It is likely that your credit card company provides a certain amount of travel insurance. However, in most cases, it is not sufficient. Therefore, you should check the details carefully to make sure it would indeed meet your needs.
When you make a booking through a travel provider such as a travel website, hotel, or car rental, they may additionally offer you travel insurance. They typically offer travel insurance only from one provider, and it may not be appropriate for your needs. Additionally, if the travel provider goes into financial default, you will have no coverage. Many of such plans are actually waivers and technically not insurance. Therefore, they would not provide any cash back, but only a voucher toward future travel with the same provider. Moreover, such providers or their agents are not the experts in travel insurance plans and may not have the expertise, license, or willingness to explain the coverages to you.
Travel Insurance Company
Many travel insurance companies sell travel insurance plans directly. However, you would end up visiting various websites to look at each travel insurance company's products and would be left wondering which one is the best one for you.
Travel Insurance Comparison Website
Travel insurance comparison websites, also called marketplaces or aggregators, provide travel insurance from various travel insurance companies. You can get instant quotes from multiple companies, compare them side by side, and make an instant purchase online.
As travel insurance prices are fixed by law, everyone pays the same price for exactly the same insurance. Therefore, there is no harm or downside in purchasing travel insurance from a travel aggregator website. After all, they are experts in this field, and they are the most logical place to purchase trip insurance.
Insubuy is a travel insurance marketplace and has been in business since the year 2000. Insubuy is licensed in all 50 U.S. states, and licensed insurance representatives are available seven days a week to suggest the most suitable plan for your needs. More importantly, if you run into any claims issues, their Claims Resolution Specialist would be glad to help with your legitimate claims.