Travelling should be rejuvenating and fun, without worrying about ‘what-ifs’. However, this is easier said than done. Travellers face various challenges, such as flight cancellations and health emergencies, that might force them to cancel their trip even before it begins. Thus, more and more people are opting for travel insurance, especially for international trips.
Moreover, across the globe, those who have often dismissed travel insurance as an “unnecessary expense” are realising its importance. While India saw double-digit growth in the domestic travel insurance segment between 2020-22, as per a recent survey conducted by Personal Finance Insider, in the US, 68 per cent of respondents replied affirmatively when asked if they would be interested in buying a travel policy in the future. And, many countries have put travel insurance on the mandatory list.
While Japan and the UAE have started asking visa applicants to insure their trip, applicants for a Schengen visa must show proof of minimum medical coverage of EUR 30,000 ( RM 1,47,500). Several other countries strongly recommend visitors have financial protection from unforeseen expenses as well.
Additionally, securing the trip has never been so convenient. Other than aggregator websites, one can buy the policy from an airline website, too. Some credit cards provide this facility as well. Having said that, let’s deep-dive into the various aspects of travel insurance.
What is travel insurance?
Travel insurance protects against medical or non-medical emergencies which might occur before or during a trip. It usually covers flight cancellations, travel delays, loss or theft of luggage and travel documents, as well as injuries and medical repatriation/evacuation.
Various types of travel insurance cover the journey, depending on an individual’s subscription.
Why should you get travel insurance?
Coverage against medical emergencies
A medical emergency can happen anywhere and to anyone, especially the elderly. It might be of any kind — accidental injury, hospitalisation due to sickness or medical evacuation. Also, a situation of medical repatriation could arise where travellers might need to return to their country of origin for medical treatment, as personal health insurance, in most cases, would be of little to no help abroad. However, the travel insurance policy would cover such bills by reimbursement or direct payment to the concerned traveller.
Compensation for lost, stolen or delayed luggage
Though airlines seldom lose luggage, it should be factored in while preparing for a trip. Additionally, baggage delays or theft can adversely affect anyone’s travel plans and pockets. In such eventualities, travel insurance protects the traveller from the losses incurred. Further, insurance companies compensate in case a travel document, such as a passport, is lost or stolen. But it must be noted that the company would only compensate for a part of the total cost.
Cover against unforeseen events
Sometimes a medical emergency in the family can force one to cancel the trip even before it has begun. Or, natural disasters, like storms and earthquakes, in the destination country could lead to the cancellation of flights. There could be numerous such unforeseen events which can force a traveller to terminate the trip. Only travel insurance can provide relief in these least expected events by covering the non-refundable and prepaid costs of the trip. However, the coverage could differ from one insurer to another, and the insurance package that has been selected.
Coverage for personal liabilities
Although this feature may seem insignificant before the above-mentioned benefits, it could become the most important one if unintentionally the traveller injures somebody or damages the property of others in a foreign country. The visitor might end up paying massive bills or worse end up in a legal suit. But if the insurer is duly informed about the mishap, then the company would take care of the costs and even fight the case in court, if need be. It is to be noted that in the event of deliberate harm or damage, this clause will not be applicable. In some policies, this feature may be available as an additional benefit.
Types of travel insurance
International travel insurance
During an overseas trip, international travel insurance protects against any kind of exigency. The policy covers expenses incurred due to medical issues, loss or theft of baggage and travel documents, trip cancellation and travel delays. The coverage umbrella also includes losses due to flight hijacking and terrorism.
Domestic travel insurance
Domestic travel insurance provides cover to an individual travelling within the country of residence. It covers loss of tickets, missed and delayed flights, personal liability and medical emergencies. However, they usually don’t cover any loss sustained because of an act of terrorism or hijacking. The insurance premium and coverage are always less than international ones, as domestic trips are cheaper.
Travel medical insurance
Travel health insurance covers only medical-related expenses. This includes all healthcare facilities, medical evacuation and repatriation. However, insurance providers have a different assortment of inclusions and exclusions, depending on the coverage purchased by the policyholder.
Single-trip travel insurance
Single-trip travel insurance provides coverage for both medical and non-medical expenses but only for one trip. Its protection is usually available for up to 180 days.
Multi-trip travel insurance
Multi-trip travel insurance is primarily for frequent travellers. The advantage of this type of insurance is that an individual can go abroad multiple times a year under the same policy. This means the traveller wouldn’t have to buy a new cover every time. The policy typically lasts 365 days and offers the same coverage as single-trip insurance. However, it is advisable to read the fine print to know the exact details. Travellers who intend to stay in one place for a long duration can avoid multi-trip insurance.
Senior citizen travel insurance
Besides providing standard cover against baggage loss and trip cancellations, some insurers also protect older people against expenses due to pre-existing diseases. Although people above the age of 71 are eligible for senior citizens insurance, tourists between 61-70 can also avail of this scheme through some insurance companies.
Family travel insurance
This is similar to individual travel insurance, with the only difference being that the coverage is given to each of the family members. Only one premium has to be paid, and the sum assured is shared by the family members. However, family insurance is normally for people who share blood relations, and the number of members who can be insured depends on the policy.
Student travel insurance
Most policies cover travellers who are between the age of 16 and 35 and aspire to study abroad. The policy looks after any travel-related risks and medical emergencies. It also has an auto-renewal feature. The policy term could last anywhere between a month to three years.
Conclusion
Travel insurance offers a great deal of protection. It guards travellers and dependents on domestic or international trips. Though it adds to trip expenses, it is a nominal cost to pay if it is saving an individual or family from incurring a hefty financial cost. It should also be noted that these are broad components of travel insurance that can differ from one insurance company to another. Always read the terms and conditions thoroughly before subscribing to any insurance plan.
(Main and featured image: Alessia Cocconi, Fum/Unsplash )
This article was first published in Travel+Leisure India.