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What you need to know about buying travel insurance
By James Yeo
Whether you are going overseas for business, or planning a holiday with your loved ones, it is always prudent to mitigate the risks associated with travelling.
Getting travel insurance can safeguard you from things like cancelled flights, accidents, travel company bankruptcies, emergency evacuations, or any other loss related to travelling.
That said, travel insurance is a topic seldom talked about because it is often so affordable. Thus, it is common that many people who are not familiar with the Dos and Don’ts of buying travel insurance.
Below are some of the key things you have to look for in a travel insurance policy:
1) Find the right coverage
The first thing you have to look for is the coverage offered by the plan.
To avoid getting trapped in an unexpected travel inconvenience or accident just because you were not aware whether it would be covered by your insurance or not, it is important to identify the types of coverage available in a travel insurance policy.
When it comes to buying the policy, find out if it includes the following:
Personal accident coverage: This provides cover against accidents that occur overseas, which ends up taking your life or leave you disabled.
Medical coverage: This covers medical expenses related to injury or illness overseas such as emergency medical evacuation or dental assistance.
Trip Inconvenience/cancellation coverage: This covers the risk of trip cancellation, flight delays, lost or stolen travel documents, loss of baggage, trip interruption, etc.
2) Compare the cost with the available coverage
Secondly, we drill into the costs of a typical travel insurance plan. In general, the rates are calculated on the basis of
Type of coverage provided,
Length of travel time,
Number of travelers, and
Age of the travellers (Child below 18 years old, Adult or Elderly above 70 years old).
Besides that, travel insurance policies tend to be categorised into basic level, mid-level, and comprehensive tiers. They vary in price according to the different levels of coverage.
I went to a local insurance and loan website and did a simple comparison based on a fixed set of parameters, and what I got was three roughly similar policies separated by a total of $3 between cheapest and most expensive – not a great deal, but probably enough to make you notice the price gap.
It is tempting to go for the cheapest plan, but be reminded that they only provide limited coverage. A more comprehensive plan might be relatively expensive but it would allow you to save a lot of money if any uncertain situation arises in the future.
In short, I would aim to purchase a plan that is right for me – good coverage based on my requirements, at a reasonable price.
3) Claim procedure
Last but not least, make sure you know the procedures on how to file a claim. Travellers can take various measures to have the claims concluded in their favour.
To resolve the claim issues without any hassle, clear the confusion of what is covered and what is excluded by reading the terms and conditions of the policy thoroughly.
If there is an error, ask the provider to rectify it before you sign up for it. Moreover, ask the question about what documentation will be required to file a claim.
Keep all the documents of expenses incurred during the trip and obtain copies of any medical receipts if you receive medical treatment overseas.
Conclusion
You will be in a better position to identify and purchase the right package if you are aware of these basic points. This is because you will be able to understand what the policy covers in terms of benefits, coverage limits and exclusions and subsequently find a cheaper plan based on what you need.
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