Do You Really Need Travel Insurance?

Current events have a funny way to bringing arcane and mundane topics to the forefront. The recent eruption of Iceland’s Eyjafjallajokul volcano. This pyrotechnic act of nature canceled thousands of flights, stranded hundreds of thousands of travelers and cost airlines $1.7 billion dollars. It also prompted a renewed interest in travel insurance. While travel insurance quotes are not available from, in the interest of providing information about all things insurance, here are a few facts you need to know to determine if you really need travel insurance.

There are two basic types of travel insurance: packages plans, which range from bare-bones to comprehensive cancel-for-any reason coverage; and travel medical plans. Within those basic categories there are a host of specialized products that insure cruises, affinity groups, baggage protection, business trips, evacuation, hurricane disruption, flight accident, accidental death and annual plans to name a few.

Travel insurance policies are sold under a variety of brand names and generic terms such as vacation insurance and trip insurance. Travel insurance can be purchased to cover one day or up to 365 days, one trip or multiple trips. The costs can depend on the type of insurance you purchase, the amount of coverage provided, the length of your trip, your destination, and many other variables. Like all insurance products, travel insurance is regulated by your state’s insurance department.

Package Plans are generally purchased by individuals and families planning vacations, and business travelers. You can purchase a basic, no-frills policy that offers limited coverage and limited benefits. Or you can opt for a full array of coverage options with premium benefits and maximum limits. Typical package plan coverage options include trip cancellation, medical emergency and evacuation, missed connections, lost baggage, and carrier or tour operator bankruptcy. The cost for package plans will range between five and seven percent of your total trip costs. If you’re willing to forego the trip cancellation provision, you can realize a significant savings on your travel insurance premiums.

Note that the medical benefits for Package Plans typically cover treatment for illnesses that happen while you’re on your trip, including ambulance service and surgery. However, treatment for pre-existing conditions may be excluded. Emergency evacuation coverage will pay for airlifts from an accident site, long-term stays in foreign hospitals and flights home for serious illnesses or injuries.

Travel Medical Plans do not provide trip cancellation coverage. They are designed to meet a specific need and are typically purchased by U.S. citizens living or traveling on business in foreign countries. Costs, which are relatively low, are based on the length of your trip, you age, your destination and other factors. Coverage usually includes emergency medical and dental treatment, medical evacuation, 24/7 assistance, and accidental death and dismemberment. Some policies may also cover lost baggage.


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