Travel insurance: why do you need to buy?

If you are like the many who love to take a vacation abroad, However, there is one thing you need to pack with out fail: that is the travel insurance.

Here’s how you will prepare for a big trip abroad, You will pack way too much, realize your suitcase does not close, then start taking stuff out. The fishing rod, the leather boots, that second wind sheet … you don’t need those but for travel insurance.

Travel Insurance

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You will be paying a lot for that vacation and do you not want it to be perfect? Let us say you pay Rs. 5 lakhs for a once-in-a-lifetime luxury cruise. The day before you are setting sail, your kid falls sick. When you call the cruise people and explain what happened, they are fine. However, the cruise rules say there are no refunds if you cancel within 2 weeks of departure. Disappointed?

This is why travel insurance is a must. When you have travel insurance that provides trip cancellation benefits, you can get reimbursement for prepaid, non-refundable travel costs when you have to cancel for a valid reason. Valid reasons include situations like illness or injury of the insured person, a travel companion or a family member, a natural disaster, etc.

Frommissing connecting flights, baggage theft to loss of passport, any or all of these are real possibilities on your trip abroad. Tavel insurance offers protection for all these. There are many other reasons why you need travel insurance.

Delays

People typically tend to travel during the holiday season. Inthe holiday season, there can be delays. More so for places that are affected by the fog and cold currents. When traveling abroad, most far-off destinations need you to take connecting flights with very little time in transit. Even though many of the airlines guarantee the next flight in case you miss one due to their delay, there might be charges for waiting, you need to pay for food and there might even be night halt charges.

All these increase your trip expenses and delay your travel plans. But if you have travel insurance, you need not worry. Most insurers will cover the losses arising because of unexpected delays, airline’s technical issues or other reasons. You can opt for plans where you receive a certain amount per day as compensation for the delay caused by the airline’s plan changes.

Also read: How to handle Health Insurance Claim rejection

Loss of documents and luggage

Losing your passport and visa in a foreign land could make your vacation disappointing. Thankfully travel insurance protects you against such risks.

The travel insurance will protect you against loss of passport with costs incurred for the duplicate passport up to the eligible sum assured. And in case of loss of luggage, a pre-approved sum is paid by the insurer to the claimant. Travel insurance also protects you against the loss of any hand baggage. However, there might be limits. So, it’s advisable not to carry expensive products or precious items.

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Unwarranted medical expenses

There are many reasons why you or your family members might fall sick when you are aboard. It could be because of changes in climate, bacterial or viral infection, cold bites and so on.

If you are traveling to Europe or some of the other Western nations, it will be mandatory to opt for travel insurance that covers your medical expenses. The visa will be issued only if you have travel insurance. However, many don’t take travel insurance when going to other countries. The cost of hospitalization may be just as high in those countries as well.

A travel insurance policy can cover health hazards. It can reimburse you for the extended stay at your hotel because of the illness. You can even avail cashless hospitalization if the travel insurance has a tie-up with hospitals in the country where you are vacationing.

Fraudulent usage of credit card

Imagine losing your credit or debit card while you are on a vacation. You might get text messages that someone is using your card. Sounds scary, right? Not only are you losing your money but you are losing money when you are abroad where you might not even find help easily. Travel insurance protects you against these risks. Your travel insurance plan will refund you for the money lost because of the stolen payment cards. This is usually valid for up to 12 hours before your first reporting of the incident.

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Secure your home

While you are away, your home could be burglarized.The threat of theft and robbery might worry you when you are traveling abroad. Some travel insurance plans provide coverage against fire and theft to your house when you are going on a vacation.

Age No Bar

From infants to senior citizens, Travel Insurance covers travelers of all ages during emergencies. Candidates up to the age of 85 years can avail Travel Insurance without undergoing any medical tests.

Also read: How to assess an insurance company before you buy a policy

Low cost

Cost is usually the number one reason peopledon’t buy travel insurance. Here’s something a lot of people don’t know: travel insurance can be affordable. When you search for travel insurance online, you might get multiple plans, so you can pick the best one for your trip and your budget.

Some plans protect you against just trip cancellation, trip interruption, and trip delay. If you know you’ll be taking more than two trips a year, your most cost-effective travel insurance option may be an AllTrips plan, which protects your travel all year.The best way to find a low-cost plan is to get a quote for your next trip and then compare plans.

An annual travel insurance plan protects you for all the international trips you undertake during the given year. This means you will not have to get insurance every time you go on a trip aboard since you’ll be protected throughout the year. This works out cheaper even if you make only a few trips in a year. Annual insurance plans provide benefits as under any regular travel insurance plan.

The most common risks that a travel insurance plan protects against include:

  • Medical expenses
  • Loss of passport
  • Loss of checked-in baggage
  • Accidental death, injury or disablement benefit
  • Trip, flight cancellation
  • Delayed departure
  • Trip delay
  • Missed connections
  • Loss, theft or damage to personal possessions and money (including travel documents)
  • Delayed baggage (and emergency replacement of essential items)
  • Legal assistance
  • Personal liability and rental car damage excess

Even though travel insurance might appear unnecessary, it is good to have one on hand so that you can get all the help you need in case of any contingencies when you are on vacation.

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About the author

KishorKumar Balpalli, believes that financial literacy and discipline is the key to one’s financial freedom. KishorKumar is a Certified Financial Planner, Personal Finance Blogger & the Founder of myMoneySage.in an award-winning Wealth Management platform. myMoneySage simplifies investing for individuals and amplifies business growth for Registered Investment Advisers by leveraging Artificial intelligence and machine learning. The AI of the machine plus the intellect of the human advisor enables comprehensive & client-centric advice at a fraction of the cost of a conventional adviser.

myMoneySage.in is an award winning personal finance platform. It helps you aggregate all your personal finance accounts like FD, Equity, Mutual Funds, PPF EPF, NPS including, Credit Cards & Loans etc. It's one place where you can track, plan and invest seamlessly. myMoneySage.in empowers you to invest in zero commission direct plans of mutual funds thereby helping you generate higher on investments. The best part is it comes with a lifetime Free plan.


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