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Travel Insurance 101 Part III

Travel Insurance 101 Part III

There is so much more than just going on-line and making a travel insurance purchase.   Let's talk about what you need to know right here when purchasing a travel insurance policy.

Travel Deposit:  Most travelers put a deposit or pre-payment down on a trip well in advance of a trip.  For instance, when traveling on their own, airfare might be purchased first, or perhaps a deposit payment is made to a hotel.  If traveling on a cruise or a group tour, a deposit may be applied to the cruise or tour company well in advance of the tour date.  This date is important because most travel insurance policies require the traveler enter the date of initial deposit.  If travel insurance is not purchased within a specified time (usually 14 days) of the deposit, benefits like pre-existing conditions may not be covered, although all other provisions of the policy may be in effect.   Also, some insurance companies may consider a small deposit (under $500) to be a "good faith" deposit that does not actually count as the initial deposit.  When a deposit totals over the amount limit, that may be considered the date of the initial deposit.  Just ask the insurance company for clarification. 

How Much to Insure?  In general, the more that is insured, the more an insurance policy will cost.  Do you need to insure the WHOLE cost of a trip?  Well, let's think about it.  Is there a deductible on your car or home insurance policy?   Keeping that in mind, it is probably not necessary to insure the whole cost of a trip.  For instance, if the amount spent on a trip is $5,000, a traveler may only want to insure $3,000 or $4,000.  Of course, try to avoid over-insuring and paying for a benefit that can never be received.   Aside from trip cancellation/delay insurance, if traveling to Europe, it is recommended to have at least $100,000 in emergency evacuation insurance.  The minimum recommended amount to insure against emergency medical care is $50,000.

Other Considerations:  Most medical/evacuation policies require a traveler to have a domestic health insurance policy in force.  A policy will spell out what activities, usually risky ones like skydiving, are not covered by insurance.  Some or all pre-existing conditions will not be covered. 

Annual vs. Individual Trip Policies:  For frequent travelers, annual, multi-trip policies might be a good option.  Annual policies are more frequently available with medical and medical evacuation policies like the popular GeoBlue Trekker policy. Some companies, like Allianz, offer year-long, multi-trip trip cancellation/trip interruption insurance.  These come with medical and medical evacuation coverage too.  Individual trip policies have long been available by travel insurance companies and will probably be less than an annual policy.  Of course, an individual trip policy is best for infrequent travelers. 

Credit Card Coverage:  If a trip or even just a part of a trip is paid with certain premier credit cards, trip insurance can be included at no additional charge.  These premium credit cards come with a fee, but the travel insurance alone may be worth it.  Check out the travel insurance provided with the Chase Sapphire Reserve card. 

Buying Online:  There are a host of travel insurance companies to select from.  Travel insurance can be purchased directly from them. Sometimes, when a flight is booked, the airline will offer travel insurance.  But there are two websites that let the traveler enter parameters regarding their needs.  These websites present different policies for the buyer to choose from:

Read and Understand Your Policy:  Every travel insurance policy is different.  It is incumbent for the traveler to read and understand the entire policy.  Don't hesitate to ask the insurance company questions to clarify what isn't understand.




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