Between fears of catching Zika and incidents of terrorism in various cities worldwide, people are concerned about traveling outside the U.S. What happens if they get sick or hurt? What if the trip has to be cut short because of illness or some other unforeseen reason? These are even bigger concerns for people going outside the U.S. today than before and illustrate why travel insurance may be needed more than ever before for foreign travelers.
Travel insurance may seem like an extra expenses adding to the cost of the trip, Additionally, spending money on something people do not ever want to use seems counterintuitive. But, the right coverage protects insureds from getting stuck paying for hospital bills in a foreign country or eating the cost of last minute plane tickets to return home early. (Many health insurance plans cover emergencies, but the expenses usually must be paid by the traveler and reimbursed subject to out-of-network benefits and the deductible.)
There are two basic things to insured, either separately or individually, for a trip:
- The health of the travelers while on the trip, and
- The costs for flights, tours, hotels, etc. that are unrecoverable (or added on) if the trip is cancelled, delayed or cut short.
The pricing depends on the traveler’s age, the type of coverage and cost of trip.
Types of Coverage and Considerations
Medical insurance, which is sold separately or included in many comprehensive cancellation plans, covers most emergencies. Some even cover sicknesses that start on the trip that would not be considered an emergency, which is helpful on a longer trip or traveling with children who may need to see a doctor for things like a stomach virus, heat rash or sore throat.
There are two areas where coverage may be limited and purchasers need to be careful – pre-existing conditions and activities planned. “Pre-existing condition” is usually defined on a travel insurance policy as an “injury, sickness or condition for which medical advice, diagnosis, care or treatment was recommended or received” during a specified “look back period” before the trip (typically two to six months). This can include something chronic like asthma, a pregnancy, or a more serious condition like heart disease. Advice, care and treatment include getting examined or a prescription. So, someone who is gets a new prescription for treating high cholesterol a few months before a trip and has a heart attack on it, would not be covered – unless it is a travel medical policy that includes pre-existing conditions.
People who like to engage in adventure sports or potentially hazardous activities also need to be sure the policy covers any injuries from it. There typically is no coverage or lower limits provided for things that result in a lot of injuries, such as downhill skiing, mountain climbing, or bungee jumping. There are special plans that cover thrill seekers, but average Joe’s or Jane’s need to know that injuries incurred trying parasailing, running with the bulls, or other activities on a vacation may not be covered.
Trip cancellation policies must be bought within a specified period right after paying a trip deposit. The idea is that putting a nonrefundable payment down on a vacation months ahead is a risk. If the traveler or a loved one gets sick or cannot go after all, they pay the money back. (That is why prices depend on trip costs.) Many cruises or tour companies offer their own version of cancellation warranties but they often do not provide the same coverage. Some cancellation policies only cover specific situations, like a death in the family or serious illness. There are “Cancel for Any Reason” policies that are more comprehensive and costly; these include being too busy at work and fear because of an epidemic in the area.
Trip interruption is not always included in policies but is important. Cancellation policies only reimburse if the person cannot go on the trip at all. Interruption coverage comes into play when someone is already on a trip and needs to cut it short for a covered reason, such as recurrence of a chronic condition or sick family member at home.
There are a variety of travel insurance policies on the market. The ones offered by credit card companies typically have lower coverage limits. Others may provide way more coverage than needed. More people than ever before are considering travel insurance before going outside the U.S., but need to read the policy information to make sure the coverage is right for their situation.
Written and Edited by Dyanne Weiss
New York Times: Suddenly Considering Travel Insurance? You’re Not Alone.
Boston.com: How (and why) to buy travel insurance
Wall Street Journal: Will Your Health Plan Cover You Abroad?
Photo courtesy of Garry Knight’s Flickr Page – Creative Commons license