After reading last week’s post, you decided that buying travel insurance might be a good idea and now you need to know what to look for when buying travel insurance.
When traveling abroad, the two big categories that you want your insurance to cover are trip cancellation and medical emergencies. Other coverage (evacuations, trip interruption and loss/delay) are often included in these bundled package plans.
Let’s first look at trip cancellation. This is coverage that protects the money you have invested on prepaid expenses related to your trip. Almost every policy allows you to cancel for sickness or death (either your own, your traveling companion’s, or a family member’s). Of course there are a number of additional reasons that trips must be cancelled. Things like natural disasters are sometimes covered by a company’s standard plan; it is important to carefully look at the policy. You can almost always expect to pay more for “cancel for work reasons,” “coverage in the event of the travel provider’s financial default,” “terrorism,” and “cancel for any reason.” This is when you really need to think about your life and what kind of coverage makes sense for you.
If you are still working, I highly recommend “cancel for work reasons” coverage. This generally means that as long as your supervisor signs an affidavit saying that you were given the time off but can no longer be away, you will get your money back.
“Cancel for any reason” coverage might be a good idea but remember that you may only get a portion of your total trip cost back when using this coverage.
I have been told from a travel insurance representative that the “cancel for terrorism” coverage is often not what people think they are getting. Things that travelers see as terrorism may only be viewed as “civil unrest” by the insurance company.
Now let’s move on to medical coverage. No one plans to end up in a foreign hospital but it happens and when it does, the fees can be alarming. Even people with good insurance in the US can find it to be inadequate when traveling abroad. Medicare doesn’t cover its participants when traveling abroad. The last thing you want to do is end up sick and in debt. The good thing about most travel insurance policies is that they will act as the primary payer if you need to seek medical treatment. This means that your own medical insurance would only be billed as secondary coverage to pick up any costs not paid by the travel insurance.
When looking at this coverage, it is also important to understand whether preexisting conditions are covered or not and how the company defines preexisting. In many cases, preexisting conditions are covered if you buy shortly after making a trip deposit or if you buy the most expensive level of coverage. Preexisting conditions are generally classified as any existing condition that you had to seek treatment for within X days before signing up for the trip. If you were treated for cancer but haven’t had treatment in two years, this would not be a preexisting condition for most providers. If you received your last chemo treatment 55 days before booking the trip, it would be. In some cases, even a change in maintenance drugs or other medications X days before signing up for the trip can trigger the preexisting condition exclusion. Look at the details and think about your life. My advice is to buy insurance immediately after booking your trip. By doing this, you can often get a waiver for preexisting conditions while avoiding the premium coverage cost.
If you are traveling in the U.S., you should still buy cancellation coverage but you may not need medical coverage depending on your own policy. If you own insurance is lacking or there are few in-network providers in the part of the country you are visiting, you might want to consider medical coverage as part of your travel insurance.
The cost of your travel insurance coverage will vary based on how much medical coverage you want. To determine what you’ll need, consider your health and what (if anything) your health insurance will cover. If you are going to Antarctica or another remote location, make sure the policy provides adequate medical evacuation coverage.
Next week we’ll wrap up with a look at what you should cover and go over some sites that offer information and quotes.