By Mahavir Chopra
I love to travel. In fact, travelling is the one thing that I save and spend on diligently. I plan my trips ahead of time and pay attention to smaller details, so that my family and I do not waste any time while travelling, especially when those are trips abroad. Being from the insurance industry myself, I always opt for the best travel insurance plan possible. A lot of my friends consult me about the factors one should consider while buying travel insurance.
These are a few recommendations I have for everyone:
1. The amount of sum assured
Insurance companies offer a lot of coverage features on the basis of the sum assured that you choose. While you may have the choice to customize your travel insurance plan’s sum assured, it ultimately affects the number of coverage benefits that your plan carries.
For example: a travel plan could be available with sum assured from $25,000 to $500,000. However, a $25,000 cover will have the most basic features such as loss of passport and medical treatment. It is also possible that this plan would be available for travelers travelling to Asian countries. For more coverage options, including trip delay or total loss of check-in baggage etc, you may have to choose a higher sum assured.
Your choice of sum assured should also depend on the country you are travelling to and the nature of the trip: is it a 3-day business trip to the UK or a month-long travel through multiple countries in the South-East Asia.
More than anything else, opt for a higher sum assured keeping in mind that the medical compensation in a travel plan is usually as much as the sum assured. Lower sum assured implies lower medical cover, which may not be sufficient to pay a possible medical treatment cost in countries like the US.
2. Coverage features and what they mean
As I mentioned in the previous point, the sum assured of your travel plan decides the number of coverage features your plan will offer. But remember, each feature will have a limit to the amount of coverage too.
Here’s an example:
A travel insurance plan for Schengen countries has a sum assured of €30,000. The limits on the coverage features on the plan look something like this:
# Personal accident: up to €10,000
# Medical expense cover: up to €30,000 (with no daily allowances)
# Loss of passport documents: up to €350
# Total loss of checked baggage: up to €500
The same plan with higher sum assured of €100,000 has the following limits:
# Personal accident: up to €20,000
# Medical expense cover: up to €100,000 (with daily allowance of €25 in case of hospitalization)
# Loss of passport and documents: up to €350
# Total loss of checked baggage: up to €1,000
Apart from this, further sub-limits are applied on the coverage possible under medical expense feature. This means capping on hospital room rent, doctor’s fee, surgery costs, ambulance service etc. So when you are comparing the coverage features, do spare a thought about their corresponding limits and sub-limits too.
3. Specific exclusions for each feature
Coverage features give an edge to a travel insurance plan. You would obviously choose a plan that is most suitable for your trip. However, here’s the caveat – Just like each coverage feature has sub-limits, they have specific exclusions too. So, if a travel insurance plan offers coverage of up to $1,000 for loss of checked baggage, some insurers have a benefit cover, which requires only submission of a certificate from the airline with respect to baggage loss. However, some insurers may insist on actual invoices of clothing and toiletries purchased.
Amongst, exclusions it is important to check the deductibles in travel insurance. For instance, baggage delay may have a 12 hours delay deductible, which means you can claim for baggage delay only if the delay is beyond 12 hours. Similarly, there will be a deductible for trip delay too. Check the deductibles for major coverages like trip delay, baggage delay, etc.
Similarly, among other exclusions, a medical expense feature of a travel plan does not cover pre-existing diseases.
The list of specific exclusions is extensive for each coverage. Therefore, it is advisable to read the policy wordings carefully. This helps you to be more wary during your travels.
4. Types of plans available
By now you know that every insurer offers variants for their travel insurance plan. Each variant differs in terms of coverage, features and benefits offered. If you are a frequent traveler, you should opt for an Annual Trip Plan. There are special plans for senior citizens and students.
Although, not widely used, travel insurance plans to domestic trips are also available.
5. Entry age limit and senior citizens
If you are travelling with your family, make sure you include all members under the plan. If you are including your parents in the coverage, check out the limit on entry age under the plan. Travel insurance plans restrict the entry age to 60 or 70 years. See if your parents can be included in the cover or not based on their age. You may want to cover them under a separate travel insurance plan for senior citizens.
6. Claim settlement process
This becomes perhaps the single most important factor while choosing a travel insurance plan. Having knowledge about your insurer’s claim settlement process helps you get access to the compensation or assistance in the hour of need. Understand the process of initiating a claim and getting it settled at a later stage. Choose a plan which has the easiest process of claim settlement and lesser frills attached to claiming for individual coverage feature.
It is advisable to remain in touch with your insurer’s representative in the destination country of your travel or have the contact details of your insurer at ready disposal. Keeping a copy of your travel insurance policy and other relevant documents on your phone and in your mailbox is also wise. Ensure the insurance company has a toll-free number for assistance or a local number for the city you are traveling to, else you will have to make expensive ISD calls to India in the Indian working time zone.
7. Global tie-ups with claim assistance centers
Insurance companies offering international travel plans have tie-ups globally with claim assistance centers.
The more the tie-ups, the higher are your chances of finding a center at your travel destination. Look at the travel plan’s tie-ups with claim centers and choose a plan which has the maximum tie-ups.
8. When should you buy the policy
It is true that you can buy a travel insurance policy even a day before flying out of India. However, bear in mind that for certain countries like the US and the UK having a travel insurance policy is mandatory at the time of applying for the visa. Usually, you can buy a travel policy as early as 60 days prior to the departure date.
9. Premium VS Coverage
Usually, your premium price is a factor of your age, the number of days of travel, the sum assured and the destination of travel. When you’re shelling out as much as a couple of lakh rupees on a foreign trip, it makes sense to not compromise on coverage for premium. Make sure that your travel plan covers all your travel risks before comparing on the basis of premium.
10. Complete information is the key
While buying a travel insurance, make sure to inform your insurer about all possible countries you may be traveling to. This is because the sum assured and coverage options may vary in certain cases. Needless to say, your trip’s origin and culmination should be in India. It is also important to intimate your insurer about pre-existing diseases etc.
A travel insurance plan assures you peace of mind while you explore the wonders of the world in foreign land. Even if you buy the best possible insurance, the onus lies on us to stay safe and take necessary precautions through the trip.
(The author is the Director-Health, Life and Strategic Initiatives, Coverfox.com)