Should I Buy Travel Insurance?
Written by Ron Ohlhausen

One of the major decisions to be made when traveling abroad is whether or not to purchase travel insurance.   Travel insurance might cover any of the following: trip cancellation (usually due to accident, illness or death in the family); interruption or delay; missed connections; lost baggage or delays; accident and sickness expenses; emergency evacuation; and possibly, car rental and AD&D.

If you are young, healthy, and traveling alone, travel insurance may be a waste of money. However, if you are traveling with a family or you are older and have health issues, travel insurance may be a prudent purchase.

Some of the companies offering travel insurance include Travel Guard, World Nomads, BlueCard Worldwide for Blue Cross Blue Shield members, CSA, and Allianz. The insurance offered might be primary coverage (covers you whether or not you have other insurance) or secondary coverage (covers only some or all of what your primary coverage does not pay). Generally, travel insurance will amount to 5-10% of the basic trip cost depending on the ages of the travelers and coverage included. The trip cost could be for airline, hotel, cruise or some combination of those expenses. If possible, try to have your coverage include the day of departure from your home to the day of return to your home.

My son and I have a major disagreement about purchasing travel insurance. He feels that the costs aren’t worth the benefits over the long run. In other words, the money you save by not purchasing coverage would more than pay for any inconvenience or hardship in the future. Recently, I purchased travel insurance through Allianz for a 3-day golf tournament that we entered in California. Our luggage was delayed, along with our clubs, so we needed to purchase some golf attire and rent clubs and shoes for the first day of the tournament. This amounted to over $400 each. There was no time to shop elsewhere and the Pebble Beach Pro Shop is a tad pricey! Fortunately, $45.50 spent on travel insurance (for two) provided a reimbursement of $838. You do have the hassle of completing a claim form and providing receipts, but that process didn’t take much more than an hour of my time.

If you are older, or traveling with children, there is more of a likelihood that your trip might be cancelled due to sickness or injury.  Some policies also cover cancellation due to the death of any immediate relative.   Also, the larger the family, the more the risk of one or more bags being lost or damaged, or that someone will get sick or injured and disrupt the trip for everyone.

My wife and I love to travel. As with most people over 60, we have preexisting medical conditions. Often, the preexisting conditions are covered if the insurance is purchased within about 14 days of your first payment toward the trip (purchase of airline tickets, cruise payment, or travel package payment). If you have preexisting conditions make sure that the policy does not exclude those conditions. Hopefully, you will never have to be medically evacuated from a cruise ship or foreign country. The cost can easily exceed $10,000. Be sure that your travel insurance covers “emergency evacuation and repatriation.”

Be aware that some private and group health insurance policies may not cover you for overseas travel.

Also, Medicare, with a few minor exceptions, does not cover your medical care when outside the U.S., Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. My St. Louis amigo discovered this fact when his 24-hour stay in a Cancun hospital set him back some $2,500!

Medigap, a supplemental plan to Original Medicare, does cover overseas travel. However, the annual fees may be more expensive than purchasing travel insurance for short-term trips through some of the above cited companies.

Whether or not to purchase travel insurance is an important decision to make when traveling overseas. If you are young and healthy, you may not feel that the risk is worth the cost of purchasing insurance. If you are over 60, have preexisting medical conditions, traveling with children, or not so wealthy that you can afford any contingency, purchasing travel insurance may be one of the most prudent decisions that you could make. Travel insurance provides a level of emotional comfort to your trip. And, if you do ever need to file a claim, it could provide a level of comfort to your pocketbook as well.

By Ron Ohlhausen