Everything you wanted to know about international travel insurance

Travel insurance that doesn’t sound Greek and Latin

What is international travel insurance ?

Most people confuse an international travel insurance with a ‘trip’ insurance. A trip insurance protects you from trip delays or disruptions or incidents of baggage loss. A travel insurance is more comprehensive because it not only covers travel related incidents but also covers medical emergencies overseas.

An international travel insurance is more like a ‘health insurance’ while traveling abroad.

Why do I need travel insurance?

There are three major reasons why people buy a travel insurance. Lets’ start with the obvious:

For Indians traveling to certain countries, especially countries in the Schengen Region, travel insurance document is part of the visa application process. Schengen countries expect all travelers to be holding a minimum travel health insurance of 30,000 Euros.

Most European and North American countries have 2 things in common — an expensive currency viz-a-viz Indian rupee and an expensive healthcare system. When you put these 2 together, it turns out to be explosively expensive for Indians facing an unfortunate medical emergency overseas. It is always advisable to have an insurance that doesn’t disrupt your travel plans.

Travel disruptions due to cancellation, missing connection or baggage loss cause financial losses. You might have to re-schedule flight tickets or hotel reservations or miss out on an important meeting. Insurance companies financially compensate you for that loss.

Why should I cover medical emergency costs while traveling overseas?

A sickness or an accident in a foreign country could be an expensive affair. Healthcare in western countries is very high and what makes things even worse is that these countries have an expensive currency.

For eg. A treatment in India that is worth say 4,000 would cost a whopping 1,15,000 in Switzerland. As a traveler you might not have an emergency fund and such unplanned expense can seriously disrupt your travel plans.

Average hospitalization expense in Switzerland is 29 times that of India.

How does travel insurance cover medical emergency?

Let’s say your friend goes to Amsterdam where she has a crazy night of pub crawling and lots of street food. That doesn’t turn out so well and unfortunately, she catches a stomach bug next day. Your friend doesn’t know how to get medical care in Amsterdam & hasn’t planned for medical expenses in her holiday budget. This is exactly a situation where travel insurance comes to her rescue.

So how does travel insurance help?

  • She can contact the insurer helpline in Amsterdam
  • Quickly find a closest hospital in the insurer’s network
  • Go in and come out of the hospital without spending money from her wallet
A small investment in travel insurance can save a lot of financial hassle.

How much travel insurance do I need?

The second biggest thing after deciding to buy a travel insurance is ‘how much insurance’. Amount to be insured depends on a number of factors, major ones being:

Place of travel: Travel insurance is mandatory for some countries eg. Schengen countries. In such places, you don’t have a choice because overseas medical insurance is part of the visa process. You will also need a higher insured value for countries with expensive healthcare systems (read Western Europe, US and Canada)

Number of travelers: Higher the number of travelers, higher should be the sum insured. Of course this value does not increase linearly with addition of new members.

Purpose of travel: A business travel for a 2-day indoor conference has a lesser health risk than a 2-week adventure trip to Europe. Your duration of the trip and purpose directly impact the sum insured.

Age of travelers: Everything else equal, older people have a higher sum insured than younger ones.

While exact amount varies on a case-by-case basis, most people prefer insurance in the range $50k-100k.

What does travel insurance premium depend on?

Your travel insurance premium depends on the sum insured you choose, place of travel, age of travelers and duration of stay. Premium also changes based on the sub-limits for specific events like emergency air-lift etc. Have a quick chat with @Arvi to find premium offered by different insurers.

How should I choose a right travel insurance?

That’s a million dollar question, isn’t it? Here are things you need to remember before choosing your travel plan:

  • Pick a plan that has a good claim settlement history. You can ask your insurer about their claim settlement track record before buying. Just so you know, AskArvi.com has tied up with the insurers with the best settlement track record in the market.
  • Pick an insurer that has a good hospital coverage in your destination country. Again, you can either check with your insurer or #AskArvi to find out about network coverage.
  • Every plan has multiple features with their own conditions. Pick features that really matter to you and choose a best plan as per your priorities. Don’t go for a plan with a widest range of coverage, instead choose a plan that covers your priorities well.

What is a pre-existing health condition and why is it important for insurance companies?

Sometimes people have health conditions that can increase their risk of hospitalization. These conditions are not dangerous by themselves but they can lead to other serious health risks. Such conditions in insurance terminology are called pre-existing medical conditions. Conditions like blood pressure, diabetes, arthritis, heart ailments, dialysis are some of the common pre-existing conditions.

So why is this important for insurers?

Insurance companies perceive people with such conditions as ‘high risk’ customers for 2 reasons.

  1. Increase in likelihood of a traveler getting hospitalized
  2. Potentially large claim payout in foreign currency

Insurance companies refuse to settle claims if a customer does not make an upfront disclosure of pre-existing conditions. Remember: Just like a good spouse, honesty is a best policy when it comes to insurance companies.

Make upfront disclosure incase of pre-existing medical conditions.

How do insurance companies cover people with pre-existing health conditions?

Unlike a regular health insurance plan, an overseas travel insurance policy does not insist on a health checkup. The upside is that, getting a travel insurance is super easy but then downside is that your policy comes with conditions. Pre-existing health condition increases a person’s risks of hospitalization. Insurance companies don’t like a scenario where they have to pay for a person’s overseas treatment due to existing health conditions.

So what do insurance firms offer in such cases?

Insurance companies flatly refuse to pay for claims arising out of pre-existing condition. For eg., if a person has diabetes that leads to a stroke, insurance company will not settle this claim. Only those claims unrelated to pre-existing conditions will be covered.

Insurance companies partially pay out expenses arising out of pre-existing condition but only upto a predefined limit. For eg, a Religare travel plan covers pre-existing conditions upto 10% of sum insured. So if you buy a $100,000 insurance plan, expenses related to pre-existing condition shall be covered upto $10,000

How does travel insurance cover trip delays and cancellations

Nobody wants travel disasters but the fact is that they do happen. All you can do in such situations is to minimize the pain.

If your flight gets inordinately delayed or cancelled due to bad weather or an airline snag, you not only lose precious time but also money in some cases. Think of all the rescheduling you have to do on your tickets and hotel reservations. While no one can bring back lost time, insurance companies do offer a compensation for delays and cancellations.

So how does compensation work?

Let’s say your flight gets delayed. For the first 12 hours delay, usually insurance companies don’t pay anything. After 12 hours, you get paid anywhere between 100–500 dollars. While this might not look like a big amount, it certainly will help cover your potential monetary losses due to trip rescheduling.

Similarly, incase of flight cancellation, you get reimbursed a fixed sum of money, usually ranging from 500–1000 $.

What is trip curtailment and how do insurance companies cover for these risks?

In 2016 there was an attack on Brussels airport that led to last minute interruptions to connecting flights leaving from Brussels. Trip curtailment refers to all such instances that lead to trip interruptions or rescheduling for traveling Indians.

Trip curtailment can be very expensive.

In such circumstances, you can apply for trip curtailment cover. You can claim reimbursement for differential amount paid for flight tickets as well as accommodation charges due to cancellations.Customers can claim anywhere between $500 to $1000 for such instances of trip disruption.

What is baggage loss cover and how do insurance companies cover for these risks?

Baggage loss is by far the most annoying thing that can happen to an international traveler. Imagine landing in Barcelona while your baggage makes its way to London. The thought itself is scary…isn’t it. There will be a lot of waiting, stress, mental exhaustion and desperation along the way. At the end of it you’d be forced to spend on stuff you don’t really need and this will eat up into your travel budget.

Insurance companies compensate travelers based on value of goods lost subject to certain limits. For eg, Religare offers a $100 for baggage loss whereas Tata AIG offers total $250 with a maximum of $125 per bag. Tata AIG also offers reasonable financial assistance for buying emergency personal items when there is a delay.

How does weather risk impact travel?

Let’s say you’ve been planning for a trip to New York for 6 months. Finally the day has come when you board your flight from Mumbai. As luck would have it, 5000 miles away there is a snow storm alert in the US and all flights are either canceled or delayed. Not only do you lose precious time, you might also need to spend money on last minute flight and hotel rescheduling.

Bad weather risk can not only disrupt your trip but also increase your hospitalization risk. Incessant rains, snowstorms or heat waves are not ideal conditions for your body, specially when you shift time zones.

How should I make a medical emergency claim on my travel insurance?

Medical emergency while overseas usually makes people panic. Large part of this panic comes from a lack of information on what to do, where to go, who to talk to, and how to arrange finances.

Whenever you are in need of emergency medical assistance, first guy you should call is an entity called ‘Third Party Administrator’ (‘TPA’). TPA is a local firm in foreign country who has a partnership with your insurance company. TPA will help you with information, medical assistance and claim settlement .

If the hospital is within network of your TPA, you can avail cashless settlement. But if it’s not, you need to collect documents and file a laim in India. Here is a list of documents you need:

How should I make a baggage loss claim on my travel insurance?

While the exact claim filing procedure depends on your insurer, here is a generic checklist for filing a baggage loss claim:

  • Travel documents that include your passport, ticket & boarding pass
  • A document from airlines confirming loss of baggage. Usually airlines provide what is called a Property Irregularity Report (PIR)
  • A duly filled claim form available on the website of your insurer
  • Any compensation offered by your airlines. Note that insurance firm only pays you for actual losses incurred. So if airlines pays a partial compensation, insurance firm will only pay the balance

How should I make a loss of passport claim on my travel insurance?

Passport loss gives a lot of mental stress when you are in a foreign country. While an insurance company cannot help you with the stress, it surely pays a financial compensation. You’ll need to work closely with local Indian embassy to arrange for emergency travel documents to get back to India. Once you are back you can file a passport loss claim by producing following documents:

  • Copy of your new passport
  • Copy of FIR or equivalent police report in foreign country
  • Copy of old passport, if available (A soft copy would definitely help)
  • Bills and invoices of expenses incurred in getting your new passport