Skip to main content

Advertisement

Advertisement

Travel Insurance: Peace of mind or unnecessary cost?

Few people expect to get sick or head into a war zone when they travel. When you get stuck in the airport in Turkey during a coup or your flight is cancelled because of a storm, however – which happened not long ago to some Singaporeans on the move – the costs can mount up.

Hartsfield-Jackson Atlanta International Airport in Atlanta, March 27, 2015. Photo: The New York Times

Hartsfield-Jackson Atlanta International Airport in Atlanta, March 27, 2015. Photo: The New York Times

Few people expect to get sick or head into a war zone when they travel. When you get stuck in the airport in Turkey during a coup or your flight is cancelled because of a storm, however – which happened not long ago to some Singaporeans on the move – the costs can mount up. It can be beneficial to consider purchasing travel insurance, then, to cover potential costs.

DO YOU NEED TRAVEL INSURANCE?

Travel insurance is designed to pay for unexpected costs while you’re travelling such as medical care, emergency evacuation, hotel accommodation if your flight is cancelled, or damaged baggage. While the coverage can be beneficial, it can also be costly and the insurance may not actually be necessary.

On the one hand, insurance portal GoBear opined that “travel insurance is your peace of mind that if something was to go wrong on your trip or even beforehand, you wouldn’t be left out-of-pocket.”

On the other hand, renowned travel writer Rick Steves writes that “travel agents recommend that you get travel insurance because they get a commission when you buy it.” You may also be covered by your existing insurance policies or your credit card.

What’s really important is to consider a variety of scenarios and then do some research to decide whether you’re already covered or need to buy travel insurance.

If you have a medical condition or are traveling with a relative who may become ill, for example, travel insurance can pay for medical care if your Singapore health insurance policy doesn’t cover expenses overseas and get you back home if you have a medical emergency. Medical care in destinations such as the United States can be very expensive.

If you plan to participate in extreme sports or are bringing along expensive equipment such as cameras or golf clubs, travel insurance may also be helpful.

You may also consider travel insurance if you have paid for the trip in advance and would lose money if it’s cancelled. If you’ve booked a non-refundable tour package, for example, travel insurance can avoid costs if you fall ill and cancel. If you plan to pay for your expenses as you go, however, there may be less reason to buy travel insurance.

What travellers really need to consider, then, is the chance that they’ll need insurance and how much peace of mind is worth.

WHAT TO LOOK FOR WHEN BUYING A TRAVEL INSURANCE POLICY

If you do decide that you need travel insurance, the first place to look may be your credit cards and existing insurance policies.

If you purchase an airline ticket with your credit card, the card issuer may provide travel insurance that meets your needs. Your existing health insurance policy may cover medical expenses abroad, and your homeowner’s insurance might cover lost luggage. Once you’ve determined what coverage you already have that covers overseas travel, you can then look for travel insurance if you want to fill in some gaps.

The next step is identifying what coverage you need. The key components of travel insurance usually include trip cancellation or interruption, medical care, emergency evacuation, baggage loss or damage, and flight insurance. Criteria for deciding what to cover include the cost of the trip, length of the trip, your itinerary and your health.

Since many health insurance policies don’t cover medical expenses overseas, medical and evacuation insurance can be important. Emergency medical care includes the cost of doctors and hospitals, and medical evacuation covers the cost of transporting you to the nearest hospital equipped to handle a medical emergency. You can look at average daily hospital rates at your destination, for example, to help figure out how much coverage you may need.

Trip cancellation or delay covers costs in unforeseen circumstances and can be useful if you’re going on a cruise or may not be necessary if you’re planning a “free and easy” trip yourself.

While insurance for lost baggage may be nice to have, lost baggage is becoming less frequent so insurance may be less useful. Legal or referral assistance may be helpful if you’re traveling to an exotic or higher-risk destination, though it would be less necessary for low risk destinations such as Hong Kong or London.

Once you decide what types of insurance you need and how much coverage you want, you can search for a policy. Many large insurance companies here offer travel insurance, and comparison sites such as GoBear enable you to compare features and costs so that you select the right policy.

If you just make a trip or two per year, single-trip policies may be more cost-effective. If you travel frequently, on the other hand, it may be more cost-effective to buy an annual policy.

It’s also important to read the fine print in your travel insurance policy. Some policies may have lower age limits for coverage of medical expenses or restrictions on lost luggage, for example, or limitations relating to outdoor activities or particular destinations.

TRAVEL COMFORTABLY

It may take a little effort to figure out whether you need travel insurance and, if you do, what to purchase. That small investment of time, though, can give you peace of mind if you make sure you have enough insurance or save you money if you’re already covered by a credit card and don’t need travel insurance.

 

 

 

 

 

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.