Explained: The importance of travel insurance in a shrinking world

As the world shrinks, people travel to faraway places for work and leisure. Travel insurance today assumes greater importance than ever before. Travel insurance is very important especially when you are traveling abroad. Let’s talk about what it covers and when to buy it.

What is covered under travel insurance

Although the word “Travel Insurance” suggests that only travel related expenses are covered but travel insurance covers much more than that. It also covers your hospitalization while you are abroad which is important because the health insurance you buy in India generally covers your hospitalization in India only. Some countries make the purchase of travel insurance a precondition before issuing a visa. big hole in your pocket. Generally, travel insurance covers your loss of checked-in baggage, the cost of medical treatment, and hospitalization abroad. Case of life threatening diseases. It also covers loss incurred due to delay or cancellation of your flights. It also covers any emergency arising from the delay or cancellation of flights.

How do we decide the sum assured?

Since international travel insurance should cover most of your hospitalization, you should consider the cost of hospitalization in the country you are traveling to.

In addition, since it covers the loss of your checked-in luggage, you should consider the value of your valuables such as your camera, laptop, etc. that you bring with you. You also need to factor in the cost of tickets as well as hotel stays in case of flight delays or cancellations.

What type of travel insurance plan should be purchased?

If you are a frequent flier, you can purchase a Multi-Trip travel insurance that covers you for all future trips made during a certain period, with the same level of cover. For example, if you buy an annual multi-trip travel insurance plan, you will be covered for any trips you take that year. However, if your travel is an issue, you should purchase travel insurance before making that journey.

What is the premium for travel insurance?

The travel insurance premium will depend on the time you purchase the travel insurance as well as the country you are traveling to. Since hospitalization is the main thing covered under travel insurance, the premium will depend on the country you are visiting. Some of the companies offer you cheaper insurance with sub-limits.

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For domestic travel, you may decide not to purchase insurance if you are adequately covered under your regular health insurance. You can still decide to cover two other elements of coverage such as loss of luggage and loss due to delay or cancellation of flights but generally no one buys domestic travel insurance.

When should it be taken?

One should buy travel insurance before a person undertakes a trip whether it is a foreign trip or a domestic trip. One can also buy it online if one is comfortable doing so.

What type of travel policy should I buy?

The travel insurance to buy will depend on the country and period where you are traveling and thus you should compare the premium and features of different insurance companies that provide travel insurance. Since most insurance companies give you instant quotes based on the data fed, you can check and compare several insurance company websites to zero in on specific products.

Remember that choosing the right insurance policy should be done carefully, because like regular insurance, travel insurance comes in many options, and there is no one right plan.

Balwant Jain is a tax and investment expert and can be contacted at [email protected] and at @jainbalwant on Twitter.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before making any investment decision.

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