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What is travel insurance and what risks does it cover?

    IndianMoney.com Research Team | Saturday, February 21,2009, 04:07 PM
 

Travel Insurance policies offers lots of advantages such as medical expenses, loss or delay of baggage or passport, personal accident, financial emergency assistance and hijack distress allowance and as well covers expenses incurred due to delayed flight, cancellation of trip, etc. It also takes care of valued assets left at home. Thus, this makes sure all travel uncertanities.

In other words Travel insurance means insurance against loss, injury, damage or expense caused by accident, injury, sickness, theft, cancellation or interruption of travel arrangements or other events or threats arising during or in connection with travel or intended travel by an insured person. As mentioned it is proposed to cover medical expenses, financial (such as money invested in nonrefundable pre-payments), and other losses incurred while traveling, either within one''s own country, or internationally.

Travel Insurance can normally be arranged at the time of booking of a trip to cover exactly the duration of that trip or a wider, continuous insurance can be purchased from travel insurance companies, travel agents or directly from travel suppliers like cruise lines or tour operators. However, travel insurance purchased from travel suppliers tends to be less comprehensive than insurance offered by insurance companies. Travel insurance often offers coverage for a range of travelers. Student travel, business travel, leisure travel, adventure travel, cruise travel, and international travel are all different options that can be insured.

The most common risks that are covered under a travel insurance policy are :

  • Medical expenses
  • Emergency evacuation/repatriation
  • Overseas funeral expenses
  • Accidental death, injury or disablement benefit
  • Cancellation
  • Curtailment
  • Delayed departure
  • 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

Some travel policies will also provide cover for additional costs, although these differ widely between providers.

And in addition, often separate insurance can be purchased for specific costs such as :

  • Pre-existing medical conditions (e.g. Asthma, diabetes)
  • Sports with an element of risk (e.g. Skating, scuba-diving)
  • Travel to high risk countries (e.g. Due to war or natural disasters or acts of terrorism)

Common Exclusions

  • Pre-existing medical conditions
  • War or terrorism (but some plans may cover this risk)
  • Pregnancy related expenses
  • Injury or illness caused by alcohol or drug use

Things to remember while purchasing a travel insurance policy

  • Understand the different policies for different travelers.
  • Obtain the policy only for the number of days of your trip. Travel insurance is usually charged on a slab basis.
  • Don''t just compare the prices of travel insurance policy; also compare the benefits of the cover, the exclusions on the cover and other features of the product.
  • Give more importance to the claims procedure and the cashless hospital network available. Get a list of the network hospitals before making a decision on your policy.
  • Always read the policy document carefully. Be clear on what you are covered for and what not. Clear out any confusion you might
  • have before buying the policy.
  • Check out for other covers such as terrorism, hijack distress allowance, etc available apart from the loss/ damage of baggage/ passport cover, personal liability cover, medical and personal accident cover.
  • Buying duplicate coverage does not double the benefit. It wastes money and creates confusion that could in fact delay payments.
  • At the time of obtaining a policy, remember to take the list of region specific toll free contact numbers.

Travel insurance policies are available at nominal rates. These policies are very useful as medical treatment abroad can cost a huge sum of money.

If you lose important documents such as your passport or your baggage your loss is huge. Travel insurance compensates you for this loss.

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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