Travel insurance can make foreign trips memorable

My niece went to the US last year for higher studies. The university in Tucson insisted that she buy an insurance policy, as it was mandatory for overseas students. My niece had to pay premium of $1100 for the insurance plan covering the duration of her course. Had she bought a travel insurance here in India before embarking on the journey, the premium would have been around Rs 20,000!

Call it ignorance or sheer indifference-many of the international travellers make the mistake of not buying a travel insurance when going abroad. With more and more people travelling abroad frequently for leisure, business or education, travel insurance has become an absolute necessity because expenses related to any hospitalisation can be exorbitant in foreign countries and can drill a hole in one’s pocket.

In fact, many of us feel that buying a travel insurance is a sheer waste of money- more so when the trips are short and so give it least priority.

Most of the travellers also have a misconception that travel insurance covers only medical expenses. Since the probability of hospitalisation during foreign visits is very low, we do not feel the need to buy travel insurance forgetting the fact that it also covers perils like flight delay, loss of baggage or passport and even death.

So is it financially wise to buy a travel insurance before flying abroad to avoid foreign trips from becoming a nightmare? Absolutely! So, what are the things that you should consider while buying yourself and your family travel insurance? The following points may come in handy when you are planning a trip abroad:

Premium

The premium varies depending on the destination, age, duration of trip and type of plan. If you are travelling to a country in Asia, the premium will be lower than any place say in the US or Canada.

This could perhaps be due to the differences in the cost of healthcare in the US and the rest of the world. Premium also depends on the age. A 25-year-old going on a business trip for a month will pay a lower premium than a 50-year-old for the same duration and same destination.

There are also specific insurance plans for senior citizens and students. Similarly, the longer the duration, more will be the premium.

Finally, the premium also depends on the type of the plan. Bajaj Allianz has Silver, Gold and Platinum plans in its Travel Elite Policy with a cover of $50000, $200000 and $500000, respectively.

Premium on travel insurance policy also varies depending on the purpose of the visit, such as a leisure or business trip. Leisure travel policies are usually one-time policies, whereas, travel insurance for business travel are issued for a period of one year covering multi trips saving the traveller the hassle of buying insurance every time he travels abroad.

However, this will be subject to certain conditions like the maximum duration during a single trip not exceeding 30-45 days etc.

Risks covered

Most travel policies cover basic risks, such as hospitalisation expenses, which may be due to an illness or accident and so in that sense they work like a mediclaim policy. However, unlike a mediclaim, travel insurance also covers expenses related to dental relief (which can be surprisingly exorbitant abroad).

In addition, they also cover evacuation of the traveller to India during emergencies and repatriation of remains in the event of death.

Non-medical expenses can include loss of baggage or passport, theft, trip cancellation or flight delay due to bad weather or terror alert.

Under TATA AIG Travel Guard Gold, the company pays you distress allowance of $100 for every 24 hour period your flight is detained by hijackers. HDFC ERGO Gold plan pays you $1000 for loss of checked baggage. TATA AIG Travel guard also covers burglary at your house in India up to Rs 2 lakh when you are on tour.

What travel insurance does not cover

What travel insurance does not cover is hospitalisation because of pre-existing diseases, war, attempted suicide, drug abuse, drunken driving or adventure sports like hot air balloon ride, bungee jumping or bull fighting.

Exclusion of extreme sports from travel insurance has been a sore issue.

So do the due diligence before buying a travel insurance so that your trips are remembered for the right reasons.

(The writer is a former banker, and is currently with Manipal Academy of Banking, Bengaluru)