Travel Insurance Guide
Protecting your travel investment and health while abroad
Travel is expensive enough, isn't it? The cost of airfare, hotels, ground transportation, food, activities and entertainment are already high. I don't know about you, but I work hard for my money, and when I travel, I want to keep as much of my money in MY pocket as possible.
Is travel insurance a necessity or a luxury? Why not cut a few corners here and there? Why buy something if it's not really needed?
My personal answer is that I'm not independently wealthy and cannot absorb the potential financial losses I would incur if I require medical care while traveling. Not being independently wealthy also means that I'm in the market for adequate but cheap travel insurance. I suspect that you're in the same position, so you, too, need affordable travel insurance.
Why You Need Travel Insurance
The Medical Coverage Gap
Did you know that if you get sick or are injured while traveling abroad, your medical plan may not cover all the charges you'll incur? If the costs of treatment are higher than the limits of your medical plan, you'll be responsible for the difference, unless you have already bought travel insurance. In fact, you may not even be admitted into hospitals in some countries without proof that you have health or medical insurance.
This is true for everyone, regardless of age or length of time abroad. Consider these scenarios:
- You fall ill just a few hours after arriving at your destination
- You make a day-trip to another country and are injured in a traffic accident
- Your child is part of a class trip abroad, gets food poisoning and requires hospitalization
In all cases, without adequate travel health insurance, you'll be responsible for the costs over and beyond the limitations of your existing medical plan.
Assessing Your Coverage Needs
Before going abroad, you need to make sure that you're adequately covered by travel medical insurance that won't break your budget. You should check to see if appropriate coverage is already available to you through your medical plan, employee benefits, or even through a credit card.
If the coverage is sufficient for your needs, then you can enjoy your trip without incurring the extra expense of travel insurance. However, if you aren't sure of your coverage, or if your coverage is insufficient or missing, then your next step should be to research and buy the travel insurance coverage you need.
How Much Can You Expect To Pay?
When I bought my first airplane ticket to China a few years ago it cost around $2000 round-trip, and my travel insurance cost me over $500 because I didn't shop around for cheap travel insurance online.
A few years later, a little bit older and wiser, my travel insurance for another trip to China cost me much less—about $300 for roughly the same coverage. The difference? Before buying my travel insurance for the second trip, I shopped around online and got the coverage I needed, at the right price.
Cost Comparison: If I had bought my travel insurance for my latest trip from my travel agent, it would have cost me about $600 for the trip, while my airplane tickets only cost $1,000!
So how much will it cost you? Not as much money as it will cost you if you get sick or injured abroad and you don't have any travel insurance coverage! That's the obvious answer to the question.
Factors Affecting Cost
How much travel insurance costs will depend on your age and the type of coverage you choose. Basic policies cost as little as $5.50 USD per $1000 of coverage. On the other hand, you can expect a full coverage policy to cost you from 7% to 10% of the cost of your trip, depending on your age. The older you are, the more you'll pay.
No matter what the cost of the policy, however, it's sure to be much lower than the cost of medical evacuation!
Finding Affordable Coverage
The good news is that you can easily, affordably and quickly research and find excellent but cheap online travel insurance and reduce the costs while making an informed purchase. This is much better than taking what you're offered at the travel agency because you can choose from hundreds of travel insurance companies and policies and save yourself a lot of money in the process.
What You Should Consider When Buying Travel Insurance
To help you in your research, here are some suggestions to help you make an informed purchase:
Consider Worst-Case Scenarios
If you can financially withstand the worst-case scenario then perhaps you don't need travel insurance or perhaps you don't need a comprehensive policy.
Adequate Medical Coverage
Make sure the policy provides sufficient medical/dental coverage, including medical evacuation coverage in case you need care in a location with substandard facilities.
Check Existing Policies
Review your existing insurance policies for possible coverage. There's no sense in paying more for what you already have in your homeowner or tenant policy.
Multi-Trip Policies
If you're a frequent traveler, consider annual or year-round travel insurance policies. These can be quite affordable compared to single-trip policies.
Additional Considerations
- Read the Fine Print: Make sure you understand what the company considers to be a legitimate reason for cancellation or interruption. If the list is too restrictive, consider another policy.
- Shop Around: Don't limit yourself to buying only from your travel agent. They'll probably only have one company's product available, and that convenience can be expensive!
- Ask Questions: Play the "what if" game. Ask for clear explanations of terminology. Make sure that you and the travel insurance company are speaking the same language.
- Avoid Transportation Provider Insurance: Don't buy the insurance through your transportation provider. If the airline goes bankrupt, how adequate will your insurance coverage be?
Once You've Bought Your Travel Insurance
Remember that your travel insurance policy covers you between certain specific dates, so don't start your trip early or extend your trip without first changing the dates of coverage on your travel insurance policy. Of course, this might cost you extra, but that is cheaper than finding yourself without coverage when you need it the most.
Important: Always bring your travel insurance policy with you when you go abroad. You can't consult the policy if it's sitting on your desk at home. You should also carry your travel insurance company's toll-free assistance phone number and other contact information with you wherever you go.
It's also a good idea to bring your regular medical coverage cards and information with you. This ensures you have all necessary documentation in case of emergency.
Final Thoughts
I hope these tips will help you buy the best travel insurance for your needs. Take your trip with the peace of mind that comes from knowing that you're insured by the right travel insurance policy at the right price. Bon voyage!
