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Insurance Basics

When people think of travel insurance, they are generally looking for a plan to protect their vacation. Vacation Plans may also be referred to as Packaged Plans, Travel Insurance, Trip Cancellation Insurance, or Trip Insurance. These plans represent over 94% of travel insurance sales because they provide coverage for exactly what travelers are seeking, which is usually for a number of different reasons from delay, cancellation, loss, etc. described in greater detail below.

Overall there are three distinct types of travel insurance that you can choose from. 

1. Comprehensive Plans: Plans with trip cancellation and travel medical options, these provide the most coverage and are generally the most expensive as a result;

2. Limited or Travel Medical Plans: Plans that will provide coverage in the event of an illness or injury while you are traveling.  Most regular health insurance plans provide partial or no coverage while you are traveling outside of your home country.  Travel Medical Insurance plans provide coverage above and beyond your regular health provider.  These plans may not always include coverage for trip cancellation; and

3. Specialty Plans: Plans with specialty coverage such as Accidental Death or Dismemberment (which may include evacuation, but will often exclude coverage for death or dismemberment resulting from an act of war). Some of these plans may also have trip cancellation and/or medical coverage.  While there are many specialty plans to choose from for your unique needs, most often, these plans are too narrow for the majority of travelers taking a vacation.

Any of the plans above may also qualify for the Schengen Visa upon entering one of more European countries if the following requirements are satisfied:

- Coverage of medical emergency has to be at least EUR 30,000  (approx. USD 50,000) and valid for all the Schengen States.

- Any expenses for medical treatment, hospitalization, medical evacuation and medical repatriation back into the U.S. must be covered.

- The fact that medical evacuation, medical repatriation and repatriation of remains are covered has to be spelled out.

- Only insurance confirmation issued by your health provider is accepted. Confirmation letters by your employer are not accepted.

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Comprehensive plans are the most common.  From our experience over 90% of travelers choose this option.  These plans combine all the benefits of Travel Medical plans with the Trip Cancellation option.

Trip Cancellation option gives you the ability to cancel your trip before it starts and receive reimbursement for 100% of your otherwise non-refundable prepaid trip expenses. There are many covered reasons for trip cancellation (check your certificate of insurance to see all covered reasons), however the most common is sudden sickness or injury preventing you from taking a trip. This also often applies to your family members and travel companion(s). You may cancel your trip if your travel companion or a family member became sick or injured.  Qualifying family members vary among carriers, so please see your certificate of insurance to identify which family members are included for purposes of trip cancellation coverage.

The trip cancellation option is often the primary reason people buy insurance, however it poses the highest risk for insurance companies and therefore results in the greatest insurance cost to you.

To limit the risk exposure to the insurance provider in the event of a trip cancellation for medical reasons, the insurance companies introduced the Pre-Existing Medical condition clause.  A Pre-Existing medical condition is classified as a medical issue that you have been treated for in the past "x" number of days, before purchasing travel insurance.  Different insurance companies have set different "x" days – this is considered the look-back period.  The look-back period may range anywhere from few months to a few years.  If your medical condition was treated or changed in any way before the look-back period, your coverage in the event of trip cancellation for medical reasons should not be impacted.

If your medical condition was treated or changed in anyway during the look-back period, you may still be eligible for trip cancellation coverage in some circumstances, namely by purchasing a plan that will include a Pre-Existing Medical Condition Waiver. To avoid the exposure you will have had to purchase Travel Insurance within 10-21 days (depending on your specific insurance company) after you paid the initial deposit for your trip. There are plans that give you the Pre-Existing Medical Condition Waiver even when you buy Travel Insurance before final payment or no later than 1 day after the final payment for your trip. Our easy to use website and filters will help you sort this out easily.

Please also note that an additional requirement for the Pre-Existing Medical Condition Waiver is that the insured amount must be no less than 100% of your non-refundable prepaid trip expenses.    

Overall, the Comprehensive Plan options provide the highest protection before and during your trip, covering trip cancellations and interruptions, travel delays, missed connections, medical emergencies, medical and non-medical evacuations, baggage loss or delay, 24-hour assistance, and more.

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LIMITED PLANS: Plans without Trip Cancellation Option

These plans give you medical coverage while traveling primarily but not exclusively outside of your home country. Your regular health insurance most likely provides very limited or no coverage while you are abroad and the Travel Medical Plans are designed to fill that gap in the course of your travels.

The main benefit of buying this type of plan compared to buying Comprehensive Plans that include coverage for Trip Cancellation is the cost.  Depending on your actual options and coverage limits, a Travel Medical Plan may cost a fraction of the Comprehensive Plan cost.

These Travel Medical plans are usually selected in 3 cases:

-      There is little time left before you take the trip, the chance of trip cancellation is slim, and you are willing to assume that risk;

-      You are in good health and have a high risk tolerance. The benefit of lower insurance cost outweighs the risk of losing money for your trip; or

-      A rare case when the trip is so important that trip cancellation is not an option. Only severe injury would prevent you from taking the trip, but not a sickness that could otherwise prevent you from taking the the trip.  You must possess some risk tolerance.

Some Travel Medical plans may also provide full coverage for trip interruption, trip delays, baggage, medical emergencies and evacuations, while others may limit coverage to medical emergencies and evacuations only. Some Travel Medical plans may have limited life insurance coverage as well.

Travel Medical plans have the same or similar terms for pre-existing medical conditions as Comprehensive Plans. Most often, you can avoid exposure by purchasing Travel Insurance within 10-21 days (depending on the insurance provider) after you paid the initial deposit for your trip. Our website and customizable filters will help you find the right plans and benefits for you.

Some Travel Medical plans may provide renewable protection as well as coverage for long-term travel abroad. 

Please note you might not be covered by your health insurance when you travel abroad. Many private companies, as well as Medicare and Medicaid programs, do not cover emergency treatment outside of the country. Without travel insurance coverage, should an emergency occur, you and your family could incur medical bills that you need to pay for out of your own pocket.

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If you are not concerned with trip cancellation or medical expenses, or do not want to bear the expense of a Comprehensive Plan, but do want to mitigate some particular risk, there are Specialty Plans available that may be the best fit for you. These may be Flight-Only, Accidental Death or Dismemberment, Evacuation-Only, or Rental Car plans.

Evacuation plans focus on emergency evacuations, and are often sold on an annual basis as a membership. With an evacuation plan, the company arranges transport, and you will not lose your savings to a costly emergency evacuation.

Accident plans provide life insurance style coverage for travelers. It pays benefits if you should have a serious injury that results in dismemberment or loss of life. Benefits paid by these accident plans are in addition to any benefits paid by separate life insurance plans.

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If you have questions about any particular plan, or would like assistance in making your next travel insurance selection, we are available to walk you through all of your options.  Please contact us at [email protected].