As the world shrinks, people travel to far-off places for work and pleasure. Travel insurance now assumes greater importance than ever before. Travel insurance is very important especially while you are travelling abroad. Let us discuss what it covers and when one should buy it.
What is covered under the travel insurance
Though the word “Travel Insurance” suggests that expenses related to travel only are covered but travel insurance covers more than that. It also covers your hospitalisation while you are abroad which is important because the health insurance purchased by you in India generally covers your hospitalisation in India only. Some of the countries make the purchase of travel insurance a precondition before the issuance of a visa. Looking at the cost of medical treatments in some developed countries, it is a prerequisite for you to buy adequate travel insurance to safeguard yourself against a big hole in your pocket. Generally, travel insurance covers your loss of checked-in baggage, the cost of treatment, and hospitalisation abroad. Though most of the insurers do not cover your pre-existing disease a few of the insurers cover the treatment in case of life-threatening diseases. This also covers loss suffered due to delay or cancellation of your flights. It also covers any emergency arising out of delay or cancellation of flights.
How do we decide the sum assured?
Since international travel insurance is supposed to cover majorly your hospitalisation, you should take into account the cost of hospitalisation in the country you are travelling to.
Moreover, as it covers the loss of your checked-in luggage, you should take into account the value of your valuable belongings like your camera, laptop, etc. which you are carrying with you. You also need to factor in the cost of ticketing as well as hotel stay in case of delay or cancellation of flights.
What kind of travel insurance plan one should buy?
In case you are a frequent flier, you can buy a Multi-Trip travel insurance that covers you for all future trips taken within a specific period, with the same level of cover. For instance, if you buy an annual multi-trip travel insurance plan, you will be covered for any trips you go on during that year. However, in case your travel is one thing, you should buy travel insurance before undertaking that journey.
What Is the premium for travel insurance?
The premium of the travel insurance will depend on the period for which you are buying the travel insurance as well as the country you are travelling. Since hospitalisation is the major item that is covered under travel insurance, the premium will depend on the country you are travelling to. Some of the companies offer you cheaper insurance with sub-limits.
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For domestic travel, you may decide not to buy the insurance in case you are adequately covered under your regular health insurance. You may still decide to cover the two other elements of coverage like loss of baggage and loss due to delay or cancellation of flights but generally nobody buys domestic travel insurance.
When should one take it?
One should buy travel insurance before one undertakes a trip whether it is a foreign trip or domestic trip. One can buy it online as well if one is comfortable doing it.
What type of travel policy should I buy?
The travel insurance to buy will depend on the country and period for which you are travelling and thus you will have to compare the premium and features of various insurance companies which provides travel insurance. Since most of the insurance companies provide you with instant quotes based on the data fed, you can check and compare a few insurance company websites to zero on specific products.
Keep in mind that selecting the right insurance policy has to be done carefully, since just like regular insurance, travel insurance comes in many options, and there is no one right plan.
Balwant Jain is a tax and investment expert and can be reached at jainbalwant@gmail.com and on @jainbalwant on Twitter.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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