To Buy or Not to Buy Travel Insurance
One of the most popular goals our clients have for both pre and post-retirement is to travel. Recent shakeups in the travel industry due to Covid and problems with flights have made the decision to buy or not to buy travel insurance of greater consequence when planning a trip, particularly out of the U.S. Travel insurance policies can offer a number of benefits and can, with a bit of effort, be tailored to your trip. The top coverage options can include:
Trip cancelation insurance: This coverage came to the forefront during Covid. It will generally reimburse you for 100% of the money you lose in pre-paid, non-refundable expenses if you have to cancel due to reasons covered in the policy. These reasons most often include illness, yours or a family member, inclement weather, terrorism attacks near or in your destination and even an employment layoff. For an extra fee, you can also purchase ‘cancel for any reason’ insurance that allows you to be paid for any reason, not just those stated in the base policy. Recognize that only non-refundable expenses are covered so if you receive a credit for your airline tickets that would not be a covered expense and so should not be included in the trip cost when you sign up for the insurance.
Medical insurance: This is important if you are going abroad where your U.S. medical insurance will not cover you if you need to visit a doctor, be hospitalized or be transported by ambulance. Medicare especially does not cover any of these expenses outside the United States making this travel coverage especially important for seniors. Pre-existing conditions may not be covered unless you also purchase a pre-existing condition waiver with the policy. Companies who offer medical travel insurance often also have a phone number or website link to offer help finding medical care in foreign countries, a very valuable service. Be aware that adventure sports such as skydiving or parasailing may not be covered. Organized sporting events may be excluded from coverage as well. You may need a specialized policy for these activities. Insurance for an emergency medical evacuation is also available if your destination is remote, quality medical care not available and you need to be airlifted out or flown back to the United States for treatment.
Travel delay insurance: This coverage reimburses you if you are caught somewhere due to flight cancelations or delays. It can cover meals, toiletries, ride services and hotel expenses.
Trip interruption insurance: If you miss a portion of your trip for a cause covered in the policy, this insurance will reimburse you for pre-paid, non-refundable expenses such as resorts, hotels, events, etc. It may also cover a new flight home and travel to and from the airport in the event of an emergency.
Baggage and personal effects: If your bags are lost this coverage will help to cover the expense of replacing both your bag and the items it contained. Baggage delay insurance will reimburse you for necessities in case your bags take a detour and you are without them for a day or two. Your homeowners or renters insurance may have this type of coverage as well so it’s prudent to investigate that before purchasing more.
Other coverages available include coverage for a missed connection, the death of your host at the destination, accidental death and dismemberment, flight accident coverage, and lost or stolen travel documents or credit cards. Additional coverage may also be purchased for rental cars but this is also often covered by your regular auto insurance so it’s good to check.
Travel insurance policies can usually be customized with the coverages that are most important to you. Comparing policies from different providers can help you get the coverage you most want with the best price. Several websites can help with these comparisons such as SquareMouth and Travelinsurance.com. The cost of a policy is based on the age of the traveler, the coverages chosen and the cost of the trip; prices can run between 4% and 10% of the trip cost. It’s important to know the details of what the policy you are purchasing covers as well as it’s exclusions. Checking whether or not the credit card with which you booked the trip has any travel coverages may also avoid duplication and save some money.
As with most insurance, you purchase travel insurance hoping that you won’t actually need it, but it can be a genuine comfort to have as you set off. Safe travels!
Written By: Carolyn Rice