Travelling without adequate insurance coverage is as risky as crossing a road blindfolded. From missed or cancelled flights, misplaced passport, and lost luggage to a health emergency – there are a number of things that can easily dampen your much-awaited vacation.
So, getting a travel insurance policy should be a high priority whenever you step out of the comforts of your home. In fact, a number of countries have made travel health insurance mandatory for all its visitors.
However, a standalone travel insurance policy, especially with comprehensive cover, might appear steep if you’re looking to travel on a budget. As such, it makes sense to consider another, oft-overlooked, option – the credit card-linked travel insurance plans. Read on as we discuss the fundamental pros and cons of both standalone and credit card-linked travel insurance plans in a bid to help you make an informed choice.
What’s a standalone travel insurance plan?
A standalone travel insurance policy safeguards your financial interests by providing coverage against travel-related emergencies like missed, delayed or cancelled flights, loss of luggage and medical complications while you’re on a trip. They need to be purchased separately before you embark on your journey.
What are its advantages? Financial protection against a host of travel-related inconveniences like missed or cancelled flights, accidents, loss of luggage or essential documents like passport, medical emergencies resulting in hospitalisation, and even death while you’re travelling Additional flexibility. Comprehensive plans may include insurance protection against flight hijacks, terror attacks, emergency evacuation or repatriation to India, risky adventure sports, etc. Some travel health insurance plans may also cover for pre-existing medical conditions (with or without usual riders like waiting period) Multiple beneficiaries with family or group travel insurance plans Option to go for single or multi-trip coverage plans What are its disadvantages? Might turn out to be a bit costly depending on coverage amount, additional benefit inclusions, number of beneficiaries, the age of the eldest beneficiary, trip duration, etc. Can’t buy a standalone policy for certain countries that are considered risky places to visit What’s a credit card-linked travel insurance policy?
A credit card-linked travel insurance policy is a complimentary privilege that comes with certain travel and lifestyle credit cards. They also provide (at times, limited) protection against travel-related inconveniences like personal accident or death, emergency hospitalisation, loss of essential travel documents, loss or delay in getting luggage, flight delays and cancellations, etc.
What are its advantages? Mostly free. You may have to use the credit card to book your flight tickets, hotel rooms, etc. No need to research as a travel insurance plan may automatically get activated upon your flight bookings using the card Mostly zero riders in terms of travel destination or pre-existing medical complications What are the disadvantages? No flexibility when it comes to coverage amount and additional inclusions Such plans usually come with higher-end credit cards Cannot include family members other than spouse or kids (at times, insurance coverage only for the cardholder). No option for group plans So, which one should you go for?
If you’re looking for complete peace of mind, you may find merit in going for a standalone comprehensive travel insurance plan. Yes, it might cost you some extra money, but you’ll still have the flexibility to customize your insurance plan based on your requirements, something that the “one-size-fits-all” credit card-linked insurance policies might not offer.
And although a credit card-linked policy might be underwritten by an insurance provider, it’s still not the same as going for a product that’s specifically built for the purpose of safeguarding you against travel inconveniences. The claim process is likely to be more streamlined with a standalone policy. Also, a number of travel insurance providers are increasingly simplifying the process of buying their policies with minimal documentation and quick approvals in a bid to attract customers.
However, if you own a travel credit card and don’t have the time to research for a standalone policy, a card-linked plan might just be fine too.
The bottom line is that your unique travel requirements should determine the choice of your travel insurance plan -- things like where you’re travelling to, for how many days, how many people are travelling with you, does anyone have a health issue, will you be participating in certain risky adventure sports like bungee jumping, so on and so forth.
As such, you’ll be well-advised to include your research time to find the best travel insurance match in your larger travel planning. Going blindly with the policy that has the cheapest premium or a complimentary privilege that comes for free might turn out to be a costly mistake.
The writer is CEO of Bankbazaar.com