Travel Insurance

Sat 30 Jul 2016 18:40:00 UTC


You would not go on a business trip or a vacation abroad without your passport, ticket or prescription medicines, but ironically many of us regularly travel abroad every year without travel insurance. According to a recent survey by ICICI Lombard, less than 40% of the travelers buy any kind of travel insurance. However, a rising number of adverse events worldwide in recent times have had travelers worried about being caught up in natural calamities, terrorism or epidemics such as bird flu or the zika virus and this is fueling the growth of the travel insurance industry in India in a big way. Travel insurance registered a 100% year-on-year growth between 2014 and 2015 and is no longer considered a nice-to-have, but a necessity. Buying an appropriate travel insurance cover when travelling abroad, can prove to be a significant, life saving decision.

What is travel insurance?

Visiting a new country is a fun filled experience which you eagerly look forward to with enthusiasm. However, traveling to a foreign land involves some uncertainties and exposes you to numerous risks. Some are very minor in nature, like leaving behind an umbrella or footwear in a hotel room when you check out or being caught in rain or unexpected crowds, which can play spoilsport and make your trip a little bit unpleasant.

Many others are huge, like losing all your belongings or falling critically ill on an overseas trip. Visualize being on a backpacking trip to Europe and being knocked down by a taxi while crossing a road. You need medical care and unfortunately your health plan in India does not cover your medical costs abroad. Given the huge disparity in medical treatment costs between India and other developed countries, your medical bill could leave you or your host with an insurmountable debt, if not covered by insurance.

Travel insurance safeguards you from medical emergencies or losses in situations as above, irrespective of whether you are on a business trip or vacation.

What does it cover?

Most travel insurance policies cover basic risks, such as emergency medical evacuation and medical expenses, etc. A more comprehensive policy typically includes coverage for delay, baggage and belongings in addition to the basic cover. Some insurers like Royal Sundaram for example cover your residence in India for up to Rs. 2 lacs against theft, fire accidents, burglary, etc while you are away holidaying.

An overwhelming majority (nearly 89%) of the respondents to a recent survey by ICICI Lombard said their main purpose of buying travel cover was to take care of medical emergencies.

Around 60% of travel insurance policies sold also include cover for terrorism apart from medical expenses, medical evacuation, loss of baggage, passport and delay of baggage, etc although there are subtle differences between various policies. In cases involving terrorism, the insurance company will cover the full medical expenses as well as transportation back home on completion of the treatment.There are exceptions, such as dismemberment and death(in some cases) so its best to read the T&C of your travel policy fully. Most travel insurance policies cover the insured for monetary loss incurred during natural calamities like earthquakes, floods, volcanic eruption or an epidemic.

How to pick a plan?

There are two types of travel insurance options available in India i.e. single trip and multi trip .

While picking a plan, you should make sure that the travel insurance plan covers the entire length of your stay overseas, apart from providing adequate monetary cover and benefits. The insurer needs to know the place you are travelling to and make sure this is clearly indicated. The insurance premium depends on several factors such as age of insured, sum insured, travel destination, length of stay and the coverage. Below are the various other travel insurance options. While the coverage remains same as above, the duration and the number of trips vary from one to another.

Single trip

As the name implies, this policy covers a single trip and is suitable for occasional travelers, such as sightseers/backpackers, elderly parents visiting children settled abroad, employees travelling for a conference, etc. These plans provide a cover for up to 6 months. When you need a policy for the entire family for a single trip, a family travel insurance plan is preferable for a family of four. The plan covers all family members under one-policy for a single trip and costs less than four individual polices. In other words, the family members share the sum assured and the plan works quite similar to the family floater option in health insurance policies.

Multi trip

Frequent travelers should certainly opt for this plan. Apart from a validity of 1 year, these plans cover multiple trips with a pre-set duration for each trip. This can vary between 30 to 90 days and is worth checking. This is certainly a convenient option for businesspeople and regular corporate travelers.

Beyond the age of 70, a health checkup is mandatory for the issue of policies and the higher risk of a claim from aged people is usually reflected in a higher premium. Moreover, pre-existing medical conditions are generally not covered by these polices. Travel insurance premiums can vary a lot and, while it is important to ensure you get a good deal, it is equally important to ensure that the level of cover suits your individual needs.

Useful Travel Tips

Be vigilant

Take care of your baggage while you travel on vacation. If you leave your belongings unattended, the insurance company can reject your claim for theft and put that down to your own negligence.

Insurance companies do ask for police report and the report should clearly identify the cause for theft. If you were under the influence of alcohol when the theft happened, the insurer will not pay out.

Check your travel documents

Make sure you have valid travel documents and check the validity of your passport, visa , etc in advance to avoid any kind of disruption to your travel plans.

Driving overseas

If you intend to drive abroad, please check the requirements in advance and ensure you have a valid driving license handy.

In conclusion, a travel insurance policy will certainly give you peace of mind and protect you from unforeseen events. This will cost you around 2-3% of your fare, but could save you from a potential $50,000 medical bill. Ensure you have one in place before you set off on your next holiday.