Is Travel Insurance Worth It? Here's What The Numbers Say

Travel can be one of life's most rewarding experiences, but it also comes with risks that are often overlooked until it's too late. Flight cancellations, medical emergencies abroad, or unexpected personal issues at home can derail even the most carefully planned vacation. That's where travel insurance comes in. Yet many travelers hesitate and ask: Is travel insurance worth it? The answer can depend on your trip, your budget, and how much risk you're willing to shoulder on your own.

But let's break it down:

Understanding What Travel Insurance Really Means

When people search for “travel insurance,” they are often using the term broadly without realizing there are different forms of coverage. In reality, travel insurance is an umbrella category.

The two types of travel insurance are trip insurance and travel medical insurance.

Trip Insurance

Trip insurance protects the money you have invested in your trip. If you need to cancel, interrupt, or delay your travels for certain covered reasons, trip insurance can reimburse prepaid, nonrefundable expenses such as flights, hotels, or tours. Many plans also include coverage for baggage loss, stolen passports, limited medical care while you're traveling, and more.

Travel Medical Insurance

Travel medical insurance is designed to cover medical emergencies while you are abroad. It can pay for hospital stays, doctor visits, prescription drugs, and even emergency medical evacuation if the local facilities cannot treat you properly. Since many domestic health plans and Medicare offer little or no coverage overseas, this type of insurance is especially important for international travel.

How Much Does Travel Insurance Cost?

The cost of trip insurance is usually calculated as a percentage of your total prepaid, nonrefundable trip expenses. Most policies fall between 4% and 10% of the trip cost. So, if you are spending $5,000 on a vacation, you might expect to pay around $200 to $400 for coverage. While that can feel like an additional expense, it's far less than losing the entire trip investment.

The cost of travel medical insurance depends on several key factors, including your age, the length of your trip, your destination, and the amount of coverage you choose.

Younger travelers typically find plans to be very affordable. For example, a week of coverage in your 20s or 30s might cost less than $50. But as you get older, premiums tend to rise, but so does the potential value of the coverage. Older travelers face higher risks of medical emergencies abroad, and the higher coverage limits and comprehensive benefits of travel medical insurance can prove essential. In these cases, even though the upfront cost is higher, the protection it provides against potentially overwhelming medical bills makes it a worthwhile investment.

Is Travel Medical Insurance Worth It?

Absolutely. When planning a trip, many people focus on the exciting aspects like exploring new destinations or indulging in local cuisine. However, it's important not to overlook the potential risks to your health and well-being while traveling. That's where travel medical insurance comes into play.

Imagine this scenario: You're traveling abroad and unexpectedly suffer a cardiac medical event. Without travel medical insurance, you may find yourself facing significant medical expenses in a foreign country, where healthcare costs can be exorbitant. Travel medical insurance provides coverage for emergency medical expenses, including hospital stays, surgeries, medications, and doctor visits, ensuring that you receive the necessary care without the burden of financial strain. Fortunately, before you left on vacation you secured a travel medical insurance policy and your illness is considered new and eligible for coverage up to $100,000 with a $0 deductible.

Is Trip Insurance Worth It?

The short answer is yes, trip insurance is worth it. While it may seem like an unnecessary expense, especially when you're already budgeting for accommodations, transportation, and activities, the benefits it provides far outweigh the cost. Travel insurance acts as a safety net, providing financial protection against unforeseen circumstances that can disrupt or even cancel your trip.

Imagine this scenario: You've spent months planning a 7-day vacation to Bermuda, but a sudden illness or injury prevents you from traveling. You've invested money in flights, accommodations, and activities for a total of $1000 non-refundable prepaid expenses and without insurance, you'd be faced with the prospect of losing all that money. Fortunately, you have a travel medical insurance policy with up to $100,000 of coverage.

Is Flight Insurance Worth It?

Flight trip insurance focuses on protecting your investment in airfare. While airlines generally offer refunds or the option to reschedule flights due to unforeseen events like severe weather, flight trip insurance provides an added layer of protection if the airlines fail to compensate.

Consider this: You've booked a once-in-a-lifetime trip to the Bahamas. An expense that includes $2000 in prepaid nonrefundable expenses. As your departure date approaches, a powerful storm system threatens to delay your flight. With trip insurance, under the trip delay benefit you can have peace of mind knowing that if your flight is delayed due to inclement weather, a covered reason, you may be reimbursed for all non-refundable costs associated with it, this could include overnight accommodations and transportation to and from the airport if your flight is delayed.

Is Travel Insurance Worth It for Domestic Flights?

The need for travel insurance extends beyond international travel. Even if you're planning a domestic flight within your home country, travel insurance can still prove invaluable. While your medical insurance may provide coverage within your country, it might not include certain travel-related incidents such as trip cancellation, lost luggage, or emergency evacuation.

Consider the possibility of your baggage being lost during a domestic flight. Without trip insurance, you may have to bear the expense of replacing essential items, impacting your travel budget. Not to mention any priceless valuables you lost. However, with trip insurance, you file a claim for the lost baggage and insured valuables, allowing you to replace your belongings without financial burden.

Is Emergency Medical Evacuation Coverage Worth It?

Absolutely. While nobody wants to think about medical emergencies during their trip, accidents or illnesses can happen unexpectedly, even in the most picturesque destinations. That's where emergency medical evacuation coverage comes in.

Imagine this: You're on a dream vacation, exploring a remote and beautiful island. Suddenly, you fall ill and require urgent medical attention beyond what the local facilities can provide. With emergency medical evacuation coverage, you won't have to worry about the financial burden of arranging medical transport to a higher level of care or back home. This coverage typically includes arrangements for medical transport, such as air ambulances or medically equipped flights, ensuring your safe transfer to a suitable medical facility. Fortunately, you have a travel medical insurance policy that has medical evacuation coverage covered up to $1,000,000.

Is Cruise Insurance Worth It?

Definitely. Cruises offer unique experiences, but unforeseen events can disrupt your plans. Cruise insurance provides tailored coverage, including trip cancellation, interruption, lost baggage, medical expenses, and emergency medical evacuation. It protects against itinerary changes, missed ports, or cancellation due to unforeseen circumstances. With cruise insurance, you can enjoy your voyage knowing you're covered for medical emergencies on board or during shore excursions.

Imagine you've planned a luxurious cruise to the Caribbean. However, on the day your cruise leaves the port, you're running late and literally miss the boat. You're stranded on the shore watching your cruise take off without you. Without cruise trip insurance, you'd have to pay out of pocket to arrange for transportation to the next port of call and this could include an overnight stay in a hotel. However you bought cruise trip insurance before you left.

While the above scenarios are hypothetical estimates and actual benefits and coverage varies widely from plan to plan and policy to policy, you can get a sense of how beneficial trip insurance and travel medical coverage can be. Setting the cost of travel insurance against the cost of the potential risks involved in travel indicate that travel medical insurance and trip insurance are worth it for the vast majority of travelers.

How to Decide If You Need Travel Insurance

Still weighing your options? A simple way to decide whether you need travel insurance is to ask yourself three questions:

• How much non-refundable money are you risking? Is this an amount that makes you nervous?
• How likely is a covered event to cause you to cancel, interrupt, or need medical care?
• Could you personally afford the worst-case expense (lost trip cost or a large overseas medical bill)?

If you answer “yes” to either of the first two or “no” to the third, you should strongly consider travel insurance. If your trip is inexpensive, completely refundable, and your medical coverage is good for your destination, you may decide to self-insure.

Calculating the Value: When Travel Insurance Makes Sense

While the specific value of travel insurance varies and can be based on individual circumstances, several factors can help determine if it's worth the investment for your particular situation:

Destination Considerations & Mandatory Requirements

Some destinations increase the value of travel insurance dramatically. Remote locations, countries with expensive medical care (like the United States, Japan, or Switzerland), regions prone to natural disasters, or areas with political instability all present elevated risks. Travel to such destinations makes insurance considerably more valuable as a protective measure.

For example, medical treatment in the United States for non-residents can be exceptionally expensive, with a simple emergency room visit potentially costing thousands of dollars. Similarly, medical evacuation from remote regionslike parts of Africa, Asia, or South Americaback to your home where you can get full medical treatment, can exceed $100,000, making travel insurance with adequate evacuation coverage essential for these destinations.

Furthermore, many countries now require travel insurance as a mandatory condition of entry. The 29 countries in Europe's Schengen Area require non-visa exempt visitors to carry travel medical insurance with minimum coverage of 30,000 for emergency medical treatment and repatriation. Without proof of adequate insurance, travelers may be denied entry at the border. Other countries with mandatory travel insurance requirements include Cuba, Ecuador, Qatar, Turkey, and the United Arab Emirates, each with their own specific coverage minimums.

Trip Cost and Non-Refundable Expenses

The higher your non-refundable expenses, the more financial protection trip insurance provides. For budget trips with minimal prepaid costs and flexible cancellation policies, the value proposition may be lower. However, for significant investments in prepaid, non-refundable expenses, travel insurance becomes increasingly worthwhile.

Trip Duration

Longer trips naturally expose you to more potential risks and increase the likelihood you'll need to use your travel insurance. A weekend getaway carries less risk than a month-long international expedition. For extended travel, comprehensive insurance becomes increasingly valuable as the statistical probability of encountering issues rises with each additional day abroad.

Traveler Health and Age

Pre-existing medical conditions and advanced age can significantly impact both the cost and importance of travel insurance. While premiums typically increase for older travelers or those with health concerns, the potential financial risk of medical emergencies also rises substantially for these groups, making insurance particularly valuable despite the higher cost.

Many travel insurance providers offer coverage for pre-existing conditions if you purchase a policy shortly after making your initial trip deposit (typically within 14-21 days), making early planning essential for travelers with ongoing health concerns.

Activities Planned

Adventure activities like skiing, scuba diving, or mountain climbing inherently carry higher risks than more relaxed sightseeing. If your itinerary includes adventure sports or physically demanding activities, travel insurance that specifically covers these pursuits becomes significantly more valuable.

Standard travel insurance policies often exclude "high-risk" activities, but there are some policies that will allow an Adventure Sports add-on so you can get coverage for those activities as well. So always verify coverage for your planned activities or consider specialized adventure travel policies that explicitly cover these pursuits.

We're Here to Help

Navigating the world of travel insurance can feel overwhelming with various options, coverage levels, and policy details to consider. If you'd like to explore your options, VisitorsCoverage makes it simple to compare top plans side by side so you have all the power to decide whether there is a plan out there that is worth it for your trip.

If you still have questions about travel insurance or need assistance selecting the right policy, our team of licensed travel insurance experts is ready to provide personalized guidance to help you find the right coverage for your specific situation.

Whether you're trying to understand policy details, need assistance finding coverage for specific medical conditions, or simply want to ensure you're adequately protected for your upcoming adventure, we're here to help.

Frequently Asked Questions About Trip Insurance Coverage