|Types of Travel Insurance
There are several types of travel insurance:
- Trip Protection (Trip Cancellation Insurance). Trip Protection plans usually reimburse your non-refundable travel expenses if an unexpected crises (e.g., death, sickness, airline strike, travel company bankruptcy) occurs before or during your trip as a result of which it is cancelled, interrupted or delayed. They offer coverage for: trip cancellation, interruption and delay; baggage loss and delay; emergency medical expenses; emergency medical evacuation; accidental death and dismemberment (AD&D); repatriation of remains; travel assistance services. Although the maximum benefit limits for medical expenses are not as high as in Travel Medical Insurance, there is usually no deductible or copayment. Usually travel protection plans are sold on a per-trip or single-trip basis but some plans can be purchased on an annual multi-trip. The latter offer all of the benefits of single-trip protection plans except trip cancellation.
- Travel Medical (International Medical Insurance). Travel Medical Insurance reimburses you for emergency medical expenses incurred when you are traveling or living in a foreign country for two weeks to two years. Maximum coverage levels can be substantial enough (up to US$5 million) to cover major medical expenses such as emergency surgery and extended hospital stays. You are required to pay the specified deductible and coinsurance or copayment before the insurer pays any expenses. Plans provide coverage for emergency evacuation, reunion, and repatriation benefits, as well as AD&D and various other 24/7 travel assistance services. You are allowed to choose the maximum policy coverage level and deductible, which affects the premiums, but at the same time gives you more control over costs than is the case with trip protection plans. Unlike them International medical insurance is not limited to US and Canada, and is available to all nationalities traveling worldwide. Coverage is guaranteed without underwriting, which means all applicants who have paid premiums are automatically covered regardless of medical history. No medical questions are asked. Pre-existing conditions are generally excluded.
- Emergency Evacuation. Depending on the plan, Emergency Medical Evacuation insurance covers the cost of transporting a seriously injured or ill person to one of the following locations: the nearest adequate medical facility, a hospital near home or the hospital of his/her choice. This type of insurance is usually included with both Travel Medical Insurance plans and Trip Protection plans. It is also sold separately. Sufficient Emergency Medical Evacuation coverage is recommended, especially for long-distance trips abroad, as this kind of service is always expensive.
- Accidental Death & Dismemberment (AD&D). This type of insurance pays the insured or its beneficiary (or your estate if you do not name a beneficiary) a substantial lump sum benefit when an accident results in death or the loss of a body part. Accidents due to terrorism may or may not be covered depending on the policy. Acts of war, and nuclear, chemical, and biological attacks are usually excluded. Policies that waive these exclusions are available but quite expensive. AD&D is often included with Travel Medical insurance and Trip Protection plans, but it is also sold separately. There are three types of AD&D insurance:
- Flight accident insurance. It is common misconception that travel insurance means flight accident insurance. Flight accident insurance is a type of AD&D that pays a benefit only when an airplane accident results in death or the loss of a body part.
- Common Carrier AD&D. This type of insurance pays a benefit only when an accident involving a common carrier results in death or the loss of a body part.
- 24-Hour AD&D. This is the broadest type, which pays a benefit when any accident results in death or the loss of a body part as long as the accident occurs during a covered trip.
- Global Insurance Benefits (Expatriate Health and Expat Insurance Benefits). Global Insurance Benefits cover individual expatriates and their families, as well as employees working abroad on assignment, international organizations, missionaries, and others living or traveling internationally who need annually renewable insurance. Three types of annually renewable insurance:
- International Major Medical Insurance. It is primary medical insurance intended to take the place of a domestic private health insurance policy or national health care system. International Major Medical Insurance plans typically offer worldwide coverage; option to renew the policy indefinitely; high lifetime policy maximum benefits (up to US$5 million); choice of deductible; comprehensive coverage such as organ transplants, major surgery; coverage for routine healthcare/wellness, prescription drugs, alternative medicines, mental/nervous care; coverage for maternity, newborns, and child wellness; limited coverage for pre-existing conditions.
- International Life Insurance. It is generally sold as one-year renewable term life insurance that pays the beneficiary a lump sum upon the death of the insured during the period of coverage. Five, 10, and even 20-year international term life insurance may also be available in limited circumstances. The application process is usually quite simple requiring only the completion of a detailed medical questionnaire without a blood test or physical exam. Death due to War and Terrorism is usually excluded but an Optional War & Terrorism Rider is often available for additional premium. In most cases coverage is available regardless of the insured's nationality and country of residence. US citizens residing in the US or Canada and citizens of Canada residing in the US or Canada are not eligible. International Life Insurance plans typically offer worldwide coverage (rate are higher for high risk countries); option to renew the policy annually through age 64; high maximum benefits (up to US$1,000,000 or higher).<
- International Accident Insurance (AD&D). It is annually renewable insurance that pays a lump sum benefit to the insured's beneficiary in the event of the insured's death or loss of a body part or function due to accident (as opposed to sickness). It is usually less expensive than life insurance and may be purchased in addition to a life insurance policy to substantially increase the benefit payable to the beneficiary if the insured dies as a result of an accident. An Accidental Permanent Total Disability (APTD) benefit may be available for additional premium. Death due to War or Terrorism is usually excluded but an Optional War & Terrorism Rider is often available for additional premium. Coverage for travel to war zones is available for journalists, contractors, and relief workers. In most cases coverage is available regardless of the insured's nationality and country of residence. US citizens residing in the US or Canada and citizens of Canada residing in the US or Canada are not eligible. International Accident Insurance typically offers worldwide coverage (rate are higher for high risk countries); option to renew the policy annually through age 64; high maximum benefits (up to US$1,000,000 or higher).
- Annual Multi-Trip (Multi-Trip Travel Insurance). Annual Multi-Trip plans cover all trips throughout the year, subject to a maximum length of 15-180 days per-trip, depending on the plan. Most plans include Travel Medical insurance, as well as 24/7 emergency assistance, emergency medical evacuation, accidental death insurance, baggage protection, trip delay protection, and other trip protection benefits. Maximum coverage levels can be substantial enough (up to US$5 million) to cover major medical expenses such as emergency surgery and extended hospital stays. You are required to pay the specified deductible and co-insurance or copayment before the insurer pays any expenses. Some plans include Trip Cancellation insurance, some cover domestic and international travel, while others only cover travel abroad. Annual Multi-Trip plans are a good choice for frequent travelers.
- Group Insurance. This type of insurance is designed to protect groups of people traveling on the same itinerary. If your group consists of ten people or more traveling to the same destination, then purchasing a group travel insurance plan may be your best and least expensive choice. There are voluntary and mandatory group programs (mandatory meaning that everyone traveling on the trip must be included in the coverage).