Understanding whether travel insurance is worthwhile starts with understanding the coverage options available. A common travel insurance policy is trip cancellation. This will refund all or a portion of the cost of the trip if cancellation occurs for reasons such as illness, a death in the family or weather.
Medical travel insurance offers coverage for medical expenses, often including such expenses as medically necessary evacuation, while you are traveling. This coverage is for anything not covered by your existing health policy.
Accidental death and dismemberment coverage is like a miniature life insurance policy. If an accident occurs while you are traveling that kills you, your beneficiary will receive a lump sum benefit. If you lose a limb while traveling, you will receive a lump sum benefit.
When shopping for travel insurance, always read the fine print. Sometimes the coverage seems better than it is. For instance, trip cancellation policies usually do not cover non-refundable deposits or fees. If you put down a large deposit on a cruise, trip cancellation insurance may not be worthwhile, since that deposit is nonrefundable. On the other hand, if the nonrefundable fees are minimal in comparison to the cost of the trip, cancellation coverage would be important. Read the exemptions to see what applies to your trip.
For medical coverage, pre-existing conditions may be exempt. This could mean that you would not be covered if you experience medical problems stemming from an illness for which you have already been diagnosed. This would make the coverage fairly worthless if you have a chronic condition. Age may play a role in how much the coverage costs.
Find out if you have coverage with your existing policies. Maybe your life insurance policy is sufficient, or your credit card offers trip cancellation or lost luggage coverage. Avoid paying for coverage you already have.
Travel insurance makes sense when you are spending a lot of money for your trip, or if you anticipate the potential for something to cause the trip to be canceled. For instance, if you are planning an expensive trip, but have an ill loved one, trip cancellation insurance is a good idea.
Students who are traveling abroad should consider travel insurance, particularly medical coverage. Those under age 26 can find low-cost travel insurance policies, and this purchase gives peace of mind should a medical condition or emergency arise while out of the country.
In other situations, weigh the potential savings if you use the policy against the cost. At that point the decision is a personal one. If peace of mind is worth the cost of the policy, then purchase it.
