A couple of years ago, I went on a week-long trip to Phuket. Everything about the trip was perfect – the hotel was amazing and the weather was pleasantly cloudy, allowing for long days by the beach. However, things started going wrong just ahead of my return journey. While waiting to board the plane, my fellow passengers and I were told that there was a mechanical failure and the airline didn’t know how long we would be delayed.
Hordes of people with connecting flights demanded to be put on alternative planes, while the rest of us grumbled to ourselves and ate the free but subpar sandwiches. The flight was delayed by nearly eight hours, and eventually, we returned on a different plane altogether. That was one time I was really thankful to have travel insurance, as I received a reimbursement of more than a hundred dollars for the time I spent waiting at the airport.
Travel insurance is designed to cover all the potential losses from your trip and reduce the risks associated with travelling. Even though many people are aware of its existence, some travellers still decide not to buy it because they view it as an unnecessary expense. However, purchasing a travel insurance plan can save you money if you experience any unforeseen circumstances. Besides, there is no underwriting required and purchasing a plan can often be done online. There are four main elements to every travel insurance plan – trip interruption or cancellation, medical expenses, accidental death, and personal effects coverage.
Possibly the most common (and most frustrating) part of travelling is having your trip cancelled or delayed due to circumstances that are beyond your control. It could be a plane that’s been delayed for hours which causes you to miss your connecting flight, or a sudden change in work commitments which means that you have to cancel or shorten your trip. Any and all of these circumstances fall under this section of travel insurance, and you can be reimbursed for what you’ve already spent if your situation qualifies under the terms of your plan. In my case, the plan I bought agreed to reimburse me $150 for every six hours of delay, so since we were delayed for eight hours, that’s the sum I managed to get back.
No one wants to fall sick or get into an accident while on a trip, but there’s always a chance it could happen. The medical component of travel insurance covers overseas medical treatment which may not be provided for in your regular health insurance plan. For serious accidents, you may even need to be airlifted to the nearest hospital that has the capability to treat you or have you flown home to receive proper care. This can cost thousands out of pocket and cause major stress to your finances if it occurs. Even if it isn’t too serious, some countries such as the United States have extremely high healthcare costs and even seeing a general practitioner can cost you hundreds of dollars.
This is the “life insurance” portion of a travel insurance plan, and in the event of death or total permanent disability, your beneficiaries will receive a payout from the insurer. The amount varies depending on the plan you choose, and plans with higher premiums can have life benefits upwards of S$300,000.
If your baggage is stuck in another country during your layover or was damaged during transit, this is what you would cite to make your claim. In addition to your baggage, this portion of a travel insurance plan assumes the risk for anything that may happen to your personal effects. Having your money pickpocketed or losing your passport all fall under this category, and even though the coverage amount generally isn’t that high, it is still preferable to be able to recoup some of your losses.
As it is with most types of insurance, choosing to buy or not is always a gamble. No one can predict when something might happen, but at the same time, you also don’t want to buy something you don’t need. There are only two things to consider when you’re making your final purchase decision.
1. Check the coverage of your existing insurance policies
If you already have a health insurance plan that covers medical emergencies overseas, it may not be worth it for you to get travel insurance. On the other hand, if the coverage is extremely low and wouldn’t cover an emergency medical evacuation, you should probably get travel insurance, especially if you’re visiting a more secluded area. Similarly, if you have life insurance coverage it may not be worthwhile having an additional travel policy on top of it.
2. Decide if you can handle the worst case scenario
If you are financially prepared to handle the potential costly repercussions of not having travel insurance, you can probably give it a miss. If a flight delay wouldn’t mess up your plans or if you managed to get an extremely discounted ticket, getting a new ticket or cancelling your trip might not be a big deal. On the flip side, if your trip’s expenses are extremely high or there is a higher risk of something happening at your vacation destination (typhoon season in the Caribbean), you might want to cover your bases.
Travel insurance can be a valuable asset in ensuring that your trip goes smoothly while giving you peace of mind. Most insurance companies are able to give you an immediate quote, and there are websites like gobear, ValuePenguin, and EnjoyCompare that provide free comparisons of all available plans to help you find one that best meets your needs. If you have considered the points above and are able to afford a plan, then travel insurance is definitely a worthwhile investment to protect your vacation.