When deciding on a travel medical insurance plan, or also referred to as a visitors insurance plan, you will notice a dollar amount listed as the policy maximum. There may also be specific plans that offer options for policy maximum amounts to choose from. Policy maximum amounts can affect the price of a travel medical insurance policy and how much coverage you’ll receive. It’s important to understand why policy maximums matter and how to choose an amount that will provide adequate coverage while traveling abroad.
What Is Policy Maximum for Travel Insurance?
A policy maximum is the highest amount that the insurance company will pay for eligible expenses. Policy maximums can typically range between $10,000 and $8 million, but will vary from plan to plan. If you need to use your coverage during your travels, the travel insurance policy will cover eligible expenses detailed in the policy’s documentation up to the policy maximum amount.
For example, let's say that you purchased a travel insurance plan with a policy maximum of $100,000 and had an accident where you needed to go to the hospital. Your travel insurance will pay a maximum of $100,000 of your eligible medical expenses after the deductible is met. So if your eligible expenses only total $90,000, it could cover all of your expenses depending on your policy’s coverage details. However, if your eligible medical expenses total $140,000, the policy would only pay up to the policy maximum of $100,000 and you would be responsible for the remaining $40,000.
Travel Insurance Policy Maximum Types
There are two different policy maximum types for travel medical insurance. Depending on the policy you choose, your policy maximum could be one of the following:
- Per Policy Period:A per policy period policy maximum will apply to a sum of all eligible expenses for the entire period of your policy
- Per Incident: A per incident policy maximum will apply to each specific injury or illness
How Does Policy Maximum Affect Premiums and Out-of-Pocket Costs?
Typically, the higher policy maximum you choose, the more your insurance premium will cost. This is because you are paying extra for better coverage. While a higher premium may cause some hesitation at first, you are paying for the financial safety net that a higher policy maximum plan can offer in the event of needing medical care abroad.
A higher policy maximum can also mean lower out-of-pocket costs. If your policy maximum is high, you’ll likely be covered for all if not the majority of your eligible expenses depending on the cost of your treatment. With a lower policy maximum, you may be stuck paying out-of-pocket for expenses beyond your plan’s policy maximum.
What Policy Maximum is Good for Travel Medical Insurance?
In order to choose the right policy maximum for your trip, it’s important to consider multiple factors including your travel plans, overall health, age, and budget. A good rule of thumb is to choose a policy maximum that would be high enough to cover the entirety of your medical bills should you need to seek necessary medical care during your trip.
Depending on where you are traveling to, you may need a higher policy maximum. For example, if you're visiting the United States, where medical costs are notoriously high, you may need a higher policy maximum than if you are traveling in the European Union or Canada.
Here are the most important factors to consider when choosing a travel medical insurance policy maximum.
Destination Country
Every country will have vastly different healthcare costs, so it’s crucial to consider your destination country when choosing a policy maximum. A $50,000 policy maximum may be more than enough for travel throughout most of Asia, but that amount may not be enough should you need urgent care for emergencies that may involve surgery or other treatments in the United States. If you are traveling to a country with higher healthcare costs, you will want to factor that in when choosing a policy maximum for your plan.
Trip Duration
The length of your travels should also be taken into consideration when choosing a policy maximum. The longer your trip, the higher the policy maximum you should consider as there may be an increased possibility that you will need to use your travel insurance policy.
Travel Plans and Activities
What are you planning on doing during your trip abroad? If you are planning on taking road trips, camping, skiing, hiking, or taking part in any other adventurous pursuits, you should consider a high policy maximum as the chances of injury or illness are higher.
Traveler’s Age
Some plans may have restrictions or different policy maximums for travelers over the age of 69, 79 or 89. Older travelers may be more prone to accidents and healthcare costs may be higher, so they may be limited to no more than $100K for their policy maximum.
Pre-existing Conditions
If a condition exists prior to departing your home country, that condition may not be covered under your travel medical insurance plan. There are some plans that cover the worsening of or the acute onset of pre-existing conditions, but these plans will have higher premiums. However, they do have the advantage of a higher policy maximum and more coverage.
How Much Travel Insurance Coverage Do I Need?
After considering all of the above factors, you should have a better idea of what policy maximum may be right for you. For example, if you're an older traveler concerned with an acute onset of pre-existing conditions going to the United States, you're likely to want a high visitors insurance policy maximum. But in most cases, you should weigh the risks of your travel against how much you're willing to pay for your travel medical insurance.
Higher policy maximums are the safest option to make sure that all of your medical bills are covered. However, you may not want to pay a more expensive policy premium if you do not expect to use all of your coverage. It is a personal choice that will vary from person to person, but the peace of mind knowing that you’ll be covered in any instance is priceless for most.
How VisitorsCoverage Can Help
For more guidance on determining which policy maximum you should choose for your travel health insurance or visitors insurance policy, contact our customer success team.
