The issue of whether or not to obtain travel insurance when planning a trip is a tricky one. There is much to consider – especially for older travelers – but in the end, I think it’s mainly a question of costs.
For instance, if I’m taking a trip stateside and my total budget is around $3000 dollars or less, I’m probably not going to spend the extra money to insure it. That’s not to say I wouldn’t incur some expenses if unforeseen circumstances interrupted my plans, but that’s a gamble I’m likely to take.
However, as my budget escalates, the acquisition of travel insurance begins to make a lot more sense. My family and I take an annual vacation together and depending on our destination, and the number of flights, hotel rooms, and other necessities we require, the costs can climb fairly quickly. In that case, I almost always opt to insure our trip.
There are generally two different kinds of travel insurance policies:
Trip Cancellation Protection – This policy typically provides a refund if the insured cannot travel due to being injured or sick, or if a flight has been cancelled or a connection has been missed. It also provides protection if luggage is lost, stolen or damaged.
Comprehensive Travel Insurance – This policy generally covers all of the above, in addition to any expenses related to medical or dental emergencies, medical or disaster evacuations, and accidental death. Travel delay, personal liability, legal expenses, and tour operator default are also usually covered.
Travel experts generally recommend buying a comprehensive policy, especially if you’re traveling overseas or to a destination that is experiencing political unrest.
If Things Go Wrong
Travel insurance is an important consideration for all kinds of travelers. Families going abroad on a summer vacation, business people on an extended professional trip, or newlyweds on their honeymoon. But it is crucially important for recently retired folks who are spending tens of thousands of dollars on their dream vacation of a lifetime.
For those folks – or for any older traveler abroad – health issues are an obvious concern, as are the insurance protections they have in place should anything go wrong.
A comprehensive travel insurance policy is essentially both a travel and medical insurance plan which is vitally important because for Americans on Medicare, their coverage stops at the U.S. border. Once outside the country, Medicare is no longer applicable.
If a health emergency should arise in a foreign country and medical care or medical evacuation is required, a comprehensive travel insurance policy would cover those expenses.
A regrettable example of this kind of misfortune happened to the parents of a colleague of mine. His Mom and Dad had saved all their lives to travel to Rome, to see the Vatican, among many other sights and treasures. Near the end of their trip, his father suddenly passed away.
Not only did their travel insurance cover all the expenses to bring his Dad home for burial, but insurance representatives also helped his Mom navigate all the bureaucratic red tape that was required to make those plans and preparations.
In circumstances such as that, the value of travel insurance is inestimable.
Travel Insurance & Financial Planners
When we’re booking a trip online, we are often prompted by the website whether we’d like to insure our trip. Unfortunately, there are a couple of problems with that kind of scenario.
If I’m making an airline reservation and I’m asked if I want to purchase travel insurance, any policy I buy is only going to provide coverage for that specific flight, not for other segments of my trip.
Secondly, buying travel insurance online from a website is generally not the most cost-effective way to purchase it. Aware of this situation, many financial planners have begun to offer travel insurance to their clients.
This is also the case for United Capital. We are currently involved in forming a relationship with a specialized company that will allow our advisers to offer affordable travel insurance to their clients. We are currently in the testing phase of this development and expect to initiate a formal launch in the next few months.
As always, this is just another good reason to routinely consult with your financial adviser.
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