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Have A Safe Journey!

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Have A Safe Journey!
Have A Safe Journey!
Manik Kumar Malakar - 27 November 2021

With more and more countries opening their borders for travellers post the pandemic, and the holiday season upon us, this is the right time to begin planning your next trip abroad. Two years ago, such plans were mostly about the destination, the budget and the shopping list of all the things you would want to travel with. While these aspects still need to be looked at, the unprecedented pandemic situation has placed travel insurance at the top of most people’s travelling lists.

In fact, the demand for travel insurance has shot up after the pandemic. “We have noticed a substantial demand for travel insurance since the outbreak of the pandemic,” says Rakesh Goyal, director, Probus Insurance Broker.

In a span of just two years, industry watchers have noticed a behavioural change among consumers. Travellers now consider travel insurance an essential item in this travel list rather than as an optional item. Also, more and more people are opting for comprehensive policies with higher sums insured. “The recent demand for travel insurance has been driven by increased awareness, caused by the Covid pandemic,” says Rakesh Jain, executive director and CEO, Reliance General Insurance.

Insurers, too, are adapting to the changing demands and offering consumer-centric policies, add-ons as well as services, adds Jain.

Moreover, experts are unanimous in saying that having travel insurance is essential, especially when travelling to foreign destinations, even though not all countries mandate it for travellers. As of now, around 32 countries, including the US, the UAE, New Zealand, Russia and the Schengen countries, issue visas only after travellers furnish proof of having travel insurance. Some also stipulate a minimum amount of cover.

“The travel insurance requirement is different for each of the 32 countries where having a valid travel insurance is mandatory. It is, therefore, advisable to check the Visa guidelines before purchasing a policy,” says Jain.

Though many countries don’t ask for it, but it is always advisable to have comprehensive travel insurance cover while travelling abroad to safeguard health and financial security.

Thanks to the digital transformation in the insurance sector, purchasing travel insurance has become a completely paperless process with most insurers in the market. Anyone above the age of 18 can buy a policy online after fulfilling the know your customer (KYC) criteria digitally and furnishing the required details.

“Passport, travel visa, air tickets, event tickets, travel insurance plan details, identification document copies,  are some of the documents that need to be submitted while applying for travel insurance,” says Goyal.

Here’s a guide to buying the right travel insurance before you pack your bags this holiday season.

Cover All The Risks

It is important to take a comprehensive cover to be able to fully relax while on a holiday.

To start with, given the global pandemic situation and the high cost of medical facilities abroad, taking a cover for medical emergencies is a must. “If you fall ill or are injured while travelling, your insurance will cover the cost of your hospitalisation. This is vital, given the excessive cost of medical treatment abroad,” says Amit Chhabra, head of health insurance, Policybazaar.com, an insurance broking platform. For instance, in the UAE, a doctor’s consultation costs at least AED 150-200, which is roughly `3,000-4,000. In the UK, a trip to a non-National Health Service (NHS) doctor can cost £80-100 (which is about `8,000-10,000).

Ensure that your travel insurance packs in a cover against personal accident, which will pay for accidental death and injuries. “In this case, the policy pays you a lump sum benefit,” says Chhabra.

While these are larger risks that you should cover, do not ignore the smaller ones that you may face during transit. Take a cover for your baggage and other belongings to ensure that if your luggage is stolen, lost, or misplaced by the airline after you check in, the insurance policy will compensate you for the loss.

Also, take coverage for expenses related to trip delays and cancellations. If you need to cancel your vacation due to unforeseen circumstances or an emergency situation, you will be reimbursed for the same.

In March 2020, when countries first put travel restrictions in place, a lot of people had to cancel their trips without any fault of theirs. While some of them got compensated, others were not so lucky and had to bear the loss.

In addition to the above covers, take one against loss of passport. In case you lose your passport, your insurance plan will cover the cost of arranging a new one.

Insure According To Purpose

“The features/coverage requirement always depends on the purpose of travel,” says Jain. For example, if the purpose of traveling is studying abroad, then you should look for features such as tuition fees cover in case of the demise or accident of a parent or sponsor, repatriation, compassionate visit, and so on.

If you want to explore adventure sports during your trip, your policy must cover associated risks.

The features of the travel insurance policy also depend on the destination country’s requirements. “It is of utmost importance to know about the country’s travel policy mandates before purchasing a cover. Read the travel insurance features, and terms and conditions in detail before embarking on a trip,” says Jain.

You may have to explore a bit to ensure the insurer you choose provides all the covers you want either as part of the main policy or as add-ons. Some of these add-ons may bump up your premiums, but it’s better to cover all your risks before travelling. For example, a plain travel insurance policy does not insure items such as laptops or jewellery. You can take riders to have this extra layer of protection for expensive belongings.

It may be that you have more than one trip planned within a span of, say, three months or six months, to the same destination or multiple destinations. Taking an extended cover may be more convenient in such a case.

“It’s prudent to read and compare the policy features from various insurers carefully, before buying one that meets the requirements and ensures utmost protection against any unforeseen events,” says Jain.

Take Adequate Cover

How much cover you should take depends on the period of your travel and stay abroad, type of policy (family floater or individual) and the destination country. For example, if someone is travelling for a longer duration and to countries like the US or Canada, then one must think of a higher sum insured.

Also, check how much the deductible is, as that’s the part that you will need to pay from your own pocket. Deductible is the part of the claim that the policyholder agrees to pay at the time of buying the policy. Usually, the higher the deductible, the lower the premiums. However, it also means that should you need to use insurance, you will pay more out of pocket.

Various sum insured options ranging from US$15,000 to US$1 million are available in the market for medical expenses cover and for personal accident cover, say experts. The cost of add-ons will depend on the options chosen. “For travel to the US, a cover of around $100,000 is recommended,” says Chhabra.

To keep your travel safe and to enjoy it to the fullest, one should opt for sufficient sum insured with a good base as well as optional coverage. “Go for an extended travel policy duration compared to your actual travel duration. Ultimately, we must take precautions to protect ourselves and our loved ones while in a foreign country,” says Jain. For instance, if your travel is for 10 days but gets extended by, say, a week due to bad weather or an illness, your travel insurance must provide cover for all the days that you are in the foreign country.  

The good news is that the premiums for travel insurance are more or less at the level they were before the pandemic hit. “No significant increase has been noticed in the premium rates from before the pandemic,” says Goyal.

Know The Claims Process

All your effort to do your due diligence to buy a travel insurance policy that covers all the risks and the costs in the most expensive of countries will come to naught if you do not understand the claims process.

For one, since you would be buying the policy in India, it is essential that you know how to get it activated in a foreign country.

Another thing to know is the documentation required to make a claim because while most insurance companies offer medical cashless covers, you may also have to pay for the expense upfront (which may be faster or the most convenient option) and get a reimbursement later.

If you go for the reimbursement option, remember to intimate the insurance provider or the overseas partner at the time of hospitalisation. Also, collect all the required documents from the respective authorities in the country of travel. You can even ask the insurer or the overseas partner for help in case of any confusion. Ensure you gather the information from your insurance company in terms of who to contact in case of an emergency. “Reimbursement usually takes 10-15 days,” says Goyal.

Check the coverage for pre-existing diseases. Some policies cover them but some don’t.

Once you have packed in an optimal insurance policy, you can plan your trip without worrying about your trip getting derailed because of a medical or other emergency. These are unpredictable times. Travel safe to travel smart!

***

Covers To Consider

  • Medical cover
  • Personal accident cover
  • Baggage cover
  • Cover for trip delays and cancellations
  • Cover against loss of passport
  • Cover for adventure activities

Make Your Experience Seamless

You wouldn’t want a minor mistake to negate your chances of getting the insurance claim that you deserve while on a trip abroad. So, be extra careful at the time of buying a travel insurance policy

  • Do The Paperwork Properly: The likelihood of making a mistake while doing the paperwork is high but a small mistake can create a lot of problems for you or cost you dear
  • Disclose Your Medical History: “Non-disclosure of medical information is a ground for rejection of claims,” says Amit Chhabra, head of health insurance, Policybazaar.com, an insurance broking platform. Therefore, it is important to disclose all your pre-existing medical conditions at the outset
  • Check All Policy Features: Ensure that your policy includes all the covers that you want, especially given the pandemic situation. Read the terms and conditions. Before signing up, make sure to understand all the jargon in the policy and the conditions
  • Plan In Advance: Avoid purchasing travel insurance at the last minute. You won’t have time to shop around and a very expensive a policy may disrupt your budget. Plus, you might end up buying the wrong policy due to lack of research
  • Do Proper Research: You can buy a travel insurance policy that meets your needs after doing thorough research. You can also customise your plan based on how many days you’ll be travelling, the number of persons covered and the activities you plan to undertake

The author is a financial journalist

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