Insurance cannot be treated as a mere checkbox in preparation for overseas travel. The time you invest in understanding such policies will not only help in selecting the right product for travel but also come in handy if you end up using the insurance in real-life situations. Very few people understand that travel insurance, as a product, acts as health, liability, accident, and loss insurance all rolled into one.
Declare all risk factors before buying
Insurance is provided to cover risks. While risks can be unknown, factors causing the risk are known. These factors need to be loaded onto the policy for a fair estimation of the premium and issuing a travel policy which adequately covers those risks.
One main example is of pre-existing diseases (PED). A travel policy with medical cover can cover emergency hospitalisation while on an overseas trip. But coverage will be affected if any other complications, arising out of the PED, are observed by the attending physician. The claim will most likely be rejected based on doctor’s notes to the insurer — if the PED condition is not loaded onto the policy beforehand. Addition of a PED will have a marginal increase of premium, but the cost of not including it may be catastrophic, given the medical costs in developed countries. The same is true of adventure sports as well. The traveller must opt for policies specifically covering adventure sports as well and load it onto the policy. One cannot hold the misconception that the medical part of the insurance can cover any mishap.
People above the age of 70 years travelling overseas are also a significant portion of travellers. But as with health insurance, travel insurance can also be limiting for this group. The sum assured will be significantly lower, of around $10,000-20,000. A policy with higher sub-limits may likely involve medical tests and offered by only a few insurers in the first place.
Know your TPA, network hospitals
As with all insurance, the company underwriting the insurance and the third-party administrator (TPA) employed to dispense the services may be different. The policyholder should know the name of the TPA and the ways to contact the organisation beforehand. The TPA can be the first point of contact, in guiding for not only claims resolution but also the scope of services offered in insurance.
The network of hospitals accepting the insurance is a critical assessment in travel insurance. The policyholder, literally holding thle policy document or identification in hand, can approach a network hospital for emergencies in a foreign country. In case of requiring medical care, one cannot obviously prioritise network/non-network hospitals. But a cashless claim can make life that much simpler compared to upfront cash payment and a reimbursement later in case of non-network hospital. Most travellers or even residents of that country, for instance, cannot meet the hospital bills that run into $100,000–200,000 for even basic hospitalisations in developed countries.
Online discussion forums, specific to India to XYZ destination, are a good source for first-hand experience in TPA services and the breadth of network hospitals available.
Read TnC for unplanned risks
In the course of travel, there may be a wide variety of unplanned risks. The policyholder must make a list of the most likely risks and opt for a policy that covers them. If the primary concern is of trip curtailment due to war/weather/strikes (plenty ongoing now), the policy that offers the highest reimbursements on cancelled bookings should be opted, which generally ranges from $1,000-2,000 from a sum insured of $500,000. The policyholder can also arrange for a trip extension by contacting the insurer electronically and making the necessary purchase. But in case of unavoidable extraneous factors such as weather/disease or outbreak or war, automatic trip extension is also provided by few policies, mostly by seven days.
If the trip includes long self-driven stretches, the travel policy purchased domestically should cover third-party liability as with other liabilities being covered. With regards to baggage, knowing the limit of reimbursement helps distinguish between covered and uncovered carry-ons which may need extra security. In any case, while loss of baggage is covered not only in transit, but outside of transit as well, sufficient evidence of care should be established for reimbursement.
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Three things to note while going for travel insurance and selecting the right product