Picture this: Youve spent months planning the perfect Caribbean getaway. Youve plotted your itinerary and booked your flights, hotels and excursions along every stop. When it comes to packing, youve made thorough lists and checked off every item. Yes, from vaccinations to visas, youve taken care of everything. Two weeks before your departure you realize that for all your meticulous planning, theres one thing you forgot: Travel insurance.
So, you hop online, search for cheap travel insurance and select the first travel insurance plan that pops up, thinking that it would be enough coverage. For the first few days, your trip in the Bahamas is magical, the sun, the food, the no-stress vibe. But then one day youre walking along the Port Lucaya Marketplace breezily taking in the sights and smells and boom! You trip and fall. Your arm breaks, requiring transport to the nearest hospital, a round of X-rays, a consultation, a cast, and a prescription for painkillers. As the bills pile up, you contact your insurance company and learn that most if not all of the incurred expenses will be your responsibility. You learn the hard way that opting for cheap insurance for travel is no substitute for more comprehensive coverage.
The Cost of Travel Medical & Trip Insurance
There are two types of travel insurance, travel medical and trip insurance. Travel medical insurance is available to American citizens and residents traveling abroad as well as foreign travelers traveling internationally and allows you to get urgent medical care in your destination country without breaking the bank. Trip insurance, on the other hand, is only available to U.S. residents and can be used domestically or internationally.
While trip insurance will offer policyholders limited medical coverage, its main function is to ensure financial protection for costs related to flight cancellations, missed connections, delays, or baggage issues. How much a policy costs depends on what type of travel insurance you buy. Unsurprisingly, travel medical insurance is more expensive, costing between $200 – $300 per person on average. The average cost of trip insurance falls between $100 to $200 for each traveler.
What Basic Travel Insurance Covers
So, what do you get with very basic travel insurance? Though plans vary wildly and we recommend that you read the policy documents carefully before making a purchase, we can offer some guidance on this.
For travel medical insurance the answer is fairly straightforward. Typically, if you opt for cheaper travel medical insurance youll still have coverage to the same benefits as more expensive plans. However, if you opt for a higher premium, youll get a higher policy maximum. This means that the more you pay for travel medical insurance the more the insurer will cover.
To give you an example, emergency medical evacuation involves removing an injured person from an isolated area and transporting them to the nearest medical facility. This procedure alone can cost tens of thousands of dollars. When you have travel medical insurance with a less expensive policy the insurer may cover up to $25,000, whereas, an insurer of a more expensive policy may cover $100,000.
With trip insurance, its a little more complicated. In general, regardless of price, basic trip insurance policies offer coverage for expenses related to flight disruptions like delays, cancellations, missed connections and baggage issues. Your standard trip insurance policy will also allow you to cancel your travel plans and receive reimbursement for a limited number of covered reasons like inclement weather, sickness or death of a loved one. The difference between buying the cheapest trip insurance plan and spending a little more comes down to the amount of coverage. As the premium cost rises so does the coverage amount.
The Benefits of Spending a Little Extra on Travel Insurance
Before you buy cheap travel insurance, you’ll want to consider the advantages that come from paying a bit more for your premium. While you can always keep your policy premium on the cheaper side, there are a number of reasons you might want to spend a little bit more. Even the best cheap travel insurance plan you find won’t usually offer these perks. Lets take a look.
Travel Medical Insurance
Paying a higher premium for travel medical insurance can be a literal life-saver. Youll get more comprehensive coverage that may include the following:
- Coverage for pre-existing conditions including visitors to the U.S.
- Higher policy maximums
- Some Trip-related coverage (for costs related to cancellations, delays, missed connections and baggage loss)
- Guaranteed access to PPO Networks
- Co-insurance system (rather than pre-defined per incident dollar amounts)
If you want to learn more about limited versus comprehensive travel medical insurance, youre in luck. Check out our explainer.
When you pay more for trip insurance you end up with even more trip-saving benefits. These perks could include:
- Greater per incident coverage
- Cancel For Any Reason (optional coverage that allows you to cancel your trip for any reason and still recoup certain prepaid expenses)
- Interruption For Any Reason (coverage that allows you to cut your trip short for any reason and still recoup certain unused prepaid expenses)
- Adventure sports riders (coverage for higher-risk activities, like whitewater rafting and scuba diving, that arent typically covered by basic trip insurance)
When You Can Afford Less Coverage
So, is purchasing a cheaper travel insurance policy with less coverage truly affordable? The answer depends on a few factors, such as the travelers health, age, and intended activities.
When it comes to travel medical insurance, if youre young, in good health, dont have any pre-existing conditions, and arent planning on engaging in adventure sports or any other high-risk activities, you may be able to get by with a limited coverage option.
A basic trip insurance policy might serve you well if your trip plans are fairly simple and firmly in place, your trip is on the shorter side and youre traveling light.
But one thing to remember is that its always better to have the proper coverage and not need it then it is to need the coverage and not have it. Even if you dont end up using your coverage, it can still give you the peace of mind you need to relax and enjoy your trip.
Now, picture this: Before your Caribbean getaway, you research your travel insurance options, take your time deciding, and, after reading the policy documentation, you decide to spend a little extra to get the coverage you need. Your trip doesnt go quite as planned and you end up losing your luggage or needing medical attention. Luckily, by investing in the right policy, youre able to get all the help you need and youre back on the beach in no time.