Saving on travel insurance costs
Travel insurance is a quick buy, right before you go on holiday. But it will pay to do a bit of research, because there are a few ways you can save on the standard plan.
If you’re travelling abroad, an overseas insurance policy is one of the many things you need to arrange for. As most insurers offer it online today, it’s a simple process, requiring no more than five minutes of your time. That’s how long it takes to buy, but without knowing the prices each insurer is offering, you could end up spending much more than you really have to. This is because some insurers offer a more varied policy than others. Before we get to price, though, let’s examine what coverage options you have available.
What it includes
Travel insurance doesn’t just cover medical costs, although this accounts for most of the premium, but covers loss of baggage, driver’s license and passport, provides assistance in case of a financial emergency and will even give you an allowance if your flight is delayed.
It’s more comprehensive than a regular health plan here, as pre-existing illnesses are covered. No illness is excluded. If you need treatment while you’re travelling, you are entitled to it, provided the condition crops up or returns while you’re abroad.
How much you need
As with health insurance, it’s completely up to you. The coverage is always in US dollars. You can buy anywhere from $25,000 to $500,000 worth of coverage. Generally, the cost difference between the cheapest and most expensive plan isn’t all that much.
What it costs
If you’re travelling to the Americas or Canada (even Japan, but only with some insurers), it will be expensive, but not prohibitively so. Besides, these countries make medical insurance compulsory, particularly because health care is so expensive. For the rest of the world, the costs are more or less standard. The longer you stay for and the older you are, the more you will pay.
Why you should compare
The prices for travel insurance vary wildly between companies. Here are the differences we’ve found:
Check the sum insured:
A few insurers (Tata AIG and Oriental Insurance, for example) sell the same high-value sum insured no matter where you’re travelling to. If you’re travelling to the US, a $100,000 policy may seem right, but it would be excessive for countries such as Thailand or Sri Lanka. By not allowing you to pick a smaller cover, though, you would end up shelling out much more than you need to. If you do go with Tata AIG or Oriental Insurance, you would end up spending triple the amount you need to.
Buy according to needs:
If you’re more than one person travelling, always pick the family floater option. This is much cheaper, though a few companies, including public sector insurers like Oriental Insurance, don’t offer it.
Check the deductible:
There’s no medical check done even for senior citizens with these overseas medical policies, so there always is a deductible. It doesn’t matter if you’re covered for $500,000 if you have to pay a high deductible on it.
Avoid the tour operator:
Tour operators offer travel insurance, but it always is among the most expensive quotes you will receive. Unless the five minutes you’ll spend buying this product yourself bothers you, avoid this option.
The following table should be read in conjunction with the points mentioned above:
|Tata AIG Travel Guard||35||10 days||No||$100,000||Rs1062||$150|
|HDFC Ergo Health Guard||35||10 days||No||$15,000||Rs431||$100|
|Oriental Insurance Overseas Mediclaim||35||10 days||No||$100,000||Rs717||$100|
|Cholamandalam Travel Insurance||35||10 days||No||$15,000||Rs350||$50|
|Thomas Cook Travel Insurance||35||10 days||No||$30,000||Rs785||$50|
|ICICI Lombard Intnl Travel Insurance||35||10 days||No||$100,000||Rs890||$100|
*as on October 30, 2013