Eight Factors to Consider while Choosing Travel Insurance

Whether you are traveling locally or internationally. Whether you are traveling on vacation, on a business trip, or on a student visa, there are travel insurance plans for every need. It is important to recognize that while travel can be fun, it is also fraught with risks – loss of baggage, accidents, medical emergencies, political risks, etc. Therefore, it is important to stay protected. Think of travel insurance as a low-cost way of securing your travel. Unfortunately, travel plans are highly ignored. Unless you are traveling to countries such as the US or Canada, where travel insurance is mandatory by the Law, most people seldom go for a travel plan. However, it is rather unwise to ignore a travel insurance coverage given the nature and types of risks associated with travel.

Let us discuss the factors to consider while choosing a travel insurance –

1. Risk-

Travel is fraught with many risks. These could include loss of baggage, injury to self or family members, accident, medical situation, the outbreak of violence in destination nation, etc. Therefore, it is important to assess your travel risks. For instance, if you are an adventure sports buff and would like to enjoy adventure sports during your vacation in a different country, keep in mind the cost and consequences of an injury resulting from the sport. Ensure you take a higher cover to secure yourself if such a situation arises. So based on the nature of your travel and the associated risks, decide for a higher or lower cover.

2. Destination-

Travel insurance is costlier for countries such as the US and Canada, where medical costs are high. The insurance premium is likely to be lower in countries such as Sri Lanka where the cost of treatment is much lower. Further, nations which have a history of natural calamities are perceived as high-risk and therefore attract a higher premium. For instance, countries with a frequent history of cyclones or earthquakes, such as Japan, will see a higher premium. Further, countries that are unstable politically will attract a higher premium due to the perceived risk.

3. Duration-

Travel insurance premium varies based on your travel type and duration. If you are planning a 7 day trip to Singapore, it would cost you lesser than if you traveled to the same country for 2 weeks.

4. Plan Type-

If you are a business traveler, you can opt for a single-trip plan for a short tour or a multi-trip plan if you are a frequent flyer with a multiple-entry visa for a particular country. On the other hand, there are other plan types specifically designed for students, leisure travelers, and senior citizens, etc. based on their specific travel needs.

5. Sum Insured- 

Even a one-time consultation with a doctor in the US will burn a hole in your pocket. Therefore, decide the sum assured based on the destination of your travel and the cost of treatment in the destination country. If you are traveling to a South East Asian country such as Burma or Thailand, you can do with a smaller cover. A higher sum assured will attract a higher premium.

6. Add-on Features-

Depending on your specific needs, you can consider add-ons that are not part of the standard travel insurance plan. For instance, some companies provide transit insurance coupled with your travel insurance plan, if you are carrying important documents or expensive items when you are traveling internationally. Also, there are “missed connection” covers for those who visit more than one city or country in a single trip. In the extreme eventuality of you getting arrested while traveling abroad, there is a bail bond insurance available. Furthermore, travel plans pay for legal assistance, etc based on the type of plan one has availed. The premium increases with each additional feature and add-ons chosen.

7. Service Efficiency- 

Evaluate service features offered by the travel insurer you are considering. Check if the insurer provides emergency assistance round the clock, do they have a toll-free helpline that operates 24X7, a well-networked hospital access across destinations, etc before buying your travel plan.

8. Claims Settlement- 

A poor claim settlement ratio reflects poorly on an insurer. Claim settlement ratio is the number of insurance claims that have been honored against all claims made. A healthy claims settlement ratio is a good leading indicator for you to consider before purchasing the policy.

Besides the factors discussed above, the comparison holds the key to your purchase decision. There are several insurance plans with varying prices and different features. How does one differentiate between the available insurance plans and determine what is the right plan option based on individual needs? This is where comparing different insurance plans will help you zero-in on the right plan based on your specific needs

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