Travel Insurance Pros and Cons

Travel Insurance – Do You Really Need It And Is It Worth The Price?

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When I traveled around-the-world for six months in 2007, many friends advised me to buy travel insurance. Normally I would not even consider such a thing. Frankly, I believe that most people in the U.S. are overly fearful about travel. In all my years of traveling I have had only one instance when insurance might have been a help. But in 2007 I was living on the Outer Banks of North Carolina and a local man, David Creecy, had been critically burned in the 2002 Bali terrorist bombings. At the time, rumors circulated that his health insurance refused to pay for him to be transported back to the U.S.; one of Creecy’s friends told me that he had to raise $25,000 cash before a medical evacuation flight could be arranged.

In addition to concerns about medical evacuation, I fretted over the amount of expensive gear I would be carrying. This trip was to launch my new career as a travel writer, so I would be backpacking with top-of-the-line cameras and lenses, a laptop, multiple thumb drives, and an iPod. So I made all the appropriate phone calls. Would my current health insurance company pay for my medical expenses if I had an accident or got seriously ill while traveling? Sort of. I would have to pay the bills when they occurred and submit receipts for reimbursement upon returning. Did my plan include medical evacuation? Absolutely not.

What about coverage for theft, loss, or damage to my electronic equipment? I considered dozens of policies from many different providers, all of which had very high premiums for six months. For each, I read the fine print until I was cross-eyed. In every case, reimbursement for electronic items was limited to $500, and then only if I could produce original receipts for the equipment. Since my clothes, toiletries, and luggage were worth very little, I decided to take my chances on the potential theft of my equipment, however I did decide that medical evacuation insurance would be an absolute necessity, and I chose MedJet because it was the only company that let me choose which hospital I wished to be evacuated to in the event of an injury or serious illness.

For instance, if I had been injured while on safari in Tanzania, the hospital of choice would likely be Nairobi, Kenya, or Cape Town, South Africa. With MedJet, I could demand to be taken to the Mayo Clinic in Minnesota. Travelers who will be out of the country for less than 90 consecutive days can purchase an annual policy priced at $250 for individuals and $385 for families. Those traveling long term will need to purchase one of three expatriate policies, priced according to the length of time out of the country and ranging from $420 to $655 for individuals or from $535 to $975 for families.

If I were leaving again today, I would do exactly the same thing. Nothing bad happened during my trip. I didn’t get sick in any third-world country, despite eating constantly from street vendors. I wasn’t robbed or even vaguely threatened, though I walked all over unfamiliar cities. And I now know that there are decent medical services available in many areas of the world. Whether or not to buy insurance, and to what level of coverage, is an issue that everyone must decide for themselves, but at the very least, I advise purchasing medical evacuation service.

40 Comments on “Travel Insurance – Do You Really Need It And Is It Worth The Price?

  1. Some great comments and viewpoints here. I will now never make a trip outside of the UK or France without travel insurance covering medical costs. A few years ago my husband and I took our first trip to New York for a friend’s wedding. We took out travel insurance before we left because a few months earlier I’d had an emergency operation for a twisted intestine (prior to that I’d always been healthy, never had anything happen to me my whole life). It was good that we did. The first night I arrived in NY I had pains in my stomach and spent the next week holed up in hospital, operation, recovery. The bill was over $40,000. The insurance company tried to refuse to pay saying the illness was a pre-existing condition. My husband wrote a compelling response to explain how it was not and, very fortunately for us, the company agreed to pay up, after several months of wrangling. There is no way I could have paid the bill otherwise. I think the insurance cost me less than £100. You just never know what is around the corner. If you travel and have no insurance and nothing happens to you, then all that says is that that time you were lucky. The next time you might not be quite so lucky…

    • Hi Sharon: Your comment touches on one of the issues that concerns me regarding travel insurance. I think you were very fortunate that the company from which you purchased your policy eventually relented and paid your claim. I have heard many horror stories about denial of claims over the years, which leads me to distrust travel insurance in general, as they seem to be more interested in getting out of paying claims that in serving their clients. Of course, some companies are better than others, so it bears saying that people who opt to buy insurance should do some due diligence before deciding which company to trust.

  2. Basically travel insurance is designed to protect you against a number of situations, though not all travel insurance plans are the same. Some will cover things such as theft whilst others will cover accident or illness. So it is important that you know exactly what your insurance covers if you do get it.

  3. Compare the cost of the trip versus the cost of the policy. If you just bought a $200 airline ticket, is that worth covering? If you paid for it with a credit card, and the airline ceases to operate before your flight, you’re already covered – under federal credit laws – by your own credit card company, since you bought or contracted for a service which you didn’t get.

    Look for a policy with a travel insurer that is independent from your tour operator and is licensed by your state. Many cruise lines and tour operators offer insurance, often at lower premiums than those charged by outside insurers. But if the cruise line or tour company goes out of business, there may not be money to cover your claim.

    If flight or cruise delays make you want to cancel, you may be out of luck. Read the fine print, as with some policies, more than half of your vacation has to be delayed before you can cancel and be covered.

  4. At the very least, just get a quote and see what your options are. For a great US-based broker (i.e. they do all the leg work to find the best plan, get a quote, do the math, etc.)

  5. Great blog.  However, far too many people neglect the dangers of travelling without proper health insurance!  Private health care can be extremely expensive in some areas where the public health system is not good.

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  7. Medical evacuation aside, Americans whose health insurance coverage (if they have any) won’t cover them outside the U.S. suffer little pain by purchasing a travel insurance policy that fills that gap. These are generally quite inexpensive policies. Several years ago I was in an accident in Germany and was hospitalized for two days. I had no coverage from a U.S. policy. Without the inexpensive travel insurance policy I had purchased before leaving the U.S., I would have been out almost $2,000 in hospital and other medical bills.

    • Hi mkraft: It depends upon your particular coverage. For example, my Blue
      Cross, Blue Shield does cover me when I am out of the country, however I
      must pay the cots up front and be reimbursed when i return to the U.S.

  8. I agree. A medical cover or evacuation plan is important, but cover for personal goods is usually money wasted. The limitations, premium and hassle of getting money out of the insurance companies are usually not worth it.

  9. I’m a traveler too and on a trip to Thailand a couple of years ago, I was hospitalized after collapsing at th Royal Palace in Bangkok. I was taken by ambulance to the hospital where I was admitted and examined from one end to the other. In spite of a doctors admonishment that I should remain for 3 days, I checked out after 12 hours, many tests, medication, great treatment, food and a private room. I had to pay by credit card when I checked out. When I got home, I learned that the total bill was $445.00 US. Of that, my personal medical insurance reimbursed me all but a $50.oo deductible. I rarely buy travel insurance but medical evacuation insurance is advisable in some instances. Although I’ve never been injured or ill to that extend, I do some adventurous activities so I always consider that when I travel.

  10. I’m a light traveler, but that’s only because I have a small tendency to misplace things, valuables especially, and that’s were insurance comes in. I wouldn’t leave the house without it, and it’s paid off so far.
    _______________________________
    auto insurance agents

  11. It is not about being afraid but more about getting prepared. In other words, risk management.

    Believe me, you can’t fully appreciate getting insured not until you get sick in a developing country!

  12. I never used to buy travel insurance, but I have for the past ten years or so. I have claimed once, and that was this past winter. I fell in Chiang Mai and needed 25 stitches in my forehead. The care I received was excellent and the cost was not prohibitive. I think the total came to a little over 200.00. My travel insurance was only $50.00. It’s not really the money. I could afford the $200.00. The peace of mind is another story.

    Great post Barbara.

  13. nice piece Barbara. I have never taken out extra insurance and I have been on the road for 10 years now. Sometimes I have had medical insurance and other time not. I have always tried to have evacuation insurance when I am working in dangerous countries. For me the fine print on lost valuables is too much hassle. I will say that as I am getting older (wiser?) I want health insurance as a base. But being an American it is not always that simple or cheap.
    I had a number of surgeries while living in Japan and was very happy that I had Japanese coverage at the time.

    Cheers,
    Todd

  14. We always travel with medical insurance and would never dream of traveling without it. I couldn’t imagine having something serious happen and not have the coverage. While it is very reasonable to have small injuries and illnesses taken care of in many countries, medical emergencies do happen and I am sure that they wouldn’t be as cheap as we would hope for something more serious.
    We are pretty lucky because we have free full coverage world wide through our film union that we are a part of. We may need to look into travel insurance in the future and when I have read many people’s posts regarding the fine print and restrictions lately, I feel that it is going to be very confusing choosing one.
    But we won’t ever not go without insurance. Great debate!:-)

  15. After the Typhoon Katrina incident, we always make sure that our home is always insured that is why we always get premium home insurance. -.`

  16. On a vaguely related note, Apple have done the right thing for themselves by not announcing international iPad prices yet, for the pound is tumbling against the dollar in recent weeks (not the Apples UK prices are set on exchange rate alone).

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  19. We were sceptical as well on buying travel insurance for our rtw. We weren’t worry of getting ill or anything while in Asia but more about travelling through the USA where, if something would have gone wrong, medical assistance can be very pricey. After some research, we decided to go ahead and bought it from Amex. Only now I can tell you how glad I am we made this decision after a $ 950 emergency root canal occurred in New Zealand which I ended it up pay only the excess fee of $50, phew! Hope this could be of any help http://www.atravelaroundtheworld.com/2008/11/insurance-dilemma.html

  20. So far I have not bought a travel insurance for my trips, but I have a small baby now and I might get travel insurance in the future.

  21. I’m really bad about it. I should by most often don’t. Injuries, illnesses, you name it I was lucky enough to handle on my own. That can’t last forever and I’m planning on getting insurance for the future.

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  24. My husband and I can attest to the fact that travel insurance is very necessary! We didn’t think we’d need to use it, but thankfully we had it when our luggage was lost and flight cancelled all on the same trip. The insurance, through Travel Guard reimbursed us for al of the clothing and valuables that we lost and they rebooked us on a new flight when ours was cancelled… other people who were supposed to be on our flight were angry and stressed trying to find a way to their destination. All we had to do was make a phone call to the insurance company and they got us to our destination on time!

  25. You might also wish to see the info on the the U.S. Department of State website: “The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. If necessary, Americans should consider secondary medical coverage for the trip.”

    They go on to list several reasons why you should you should be concerned about medical coverage abroad – see a summary at http://www.medicaltravelinsuranceinfo.com or the State Department site at: http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html

  26. I work for one of these insurance companies and when I travel to Asia on mission trips I always buy insurance. In fact I bought the insurance a year before I got a job here. I have made 4 missions trips to Asia with groups from 27 people to only 12. It is amazing how many near misses we have had with disaster. This past trip one of the people had to be hospitalized overnight, I am fairly sure he did not have travel medical insurance. Peace of mind is very valuable to me.

  27. Guys, up front I’ll put my cards on the table and tell you I run a travel insurance company. I should also point out I’m a veteran traveller and head off several times a year.

    Just because you buy travel insurance, head off and nothing happens isn’t the point. That’s great. Really. But consider how many policies we have to sell to cover the US$159,000 to get the guy out of Costa Rica who was jogging along a footpath when he had a brain aneurism? Or (yesterday) how the girl who got typhoid high up in Nepal and needed a helicopter.

    And that’s not the bad stuff … the bad stuff we really can’t talk about because everyone would think of us as a bunch of cheating insurance types rather than the good guys getting people out of trouble. But there you go.

    When I was younger, I sometimes travelled with insurance and sometimes not. Once I passed out cold in Guatemala, smashed my head open on the pavement and woke up being assisted into a police car and on to the hospital. I was lucky as I got taken care of in the local hospital and didn’t even need my insurance. But I was damn pleased I had it.

    Now, having seen what I have seen at the sharp end of the business – anyone who travels without travel insurance is stark staring mad, plain and simple. Buy it from whomever, but do your homework and get yourself covered.

    Oh, and have fun travelling. It’s what life is for.

    Simon

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  29. Interesting viewpoint, though in a matter of minutes I found a 6-month worldwide policy that does include air evac, $2,500 on baggage and has a $100 premium. All that for $260.

    So while I agree with your point that one should read the small print, I’d add to that, spend a reasonable amount of time searching for policies that suit your needs and budget.

    It’s easy to say after the fact that “I had a hassle-free trip and so don’t need travel insurance”, but your argument would be a good deal more persuasive if you had had problems and still didn’t see the need for travel insurance.

    Cheers

  30. I actually do travel with insurance and plan to for all of my upcoming travels as well as traveling rtw for the past year. Although I never made a claim, it was piece of mind knowing I had it – I also consider my small outlay of cash a service to my family if something should happen to me and I have to be medevaced back to the states or my remains repatriated if I die. Shit happens and I wouldn’t want that financial burden to fall to my loved ones at the end of the day, so I pay and have piece of mind :-)

    I have insurance in the states…why not when I’m not in the states? :-) I also have a fairly week immune system and the street food in Laos did me in quite a bit at one stage! Cheers to you for the iron gut, I’m envious!

  31. Would you pass on normal medical coverage too? Sometimes I think travel insurance is used too broadly, and I’m not quite sure how you mean it here.

    Travel insurance that covers “stuff” is one thing, however I think far too many travelers try and save money by passing on medical insurance. They get catastrophic coverage only (and on the cheap) through companies like World Nomads, but what would happen if they got cancer abroad, and were not covered?

    They would be in for a long and expensive treatment process, and could run into trouble trying to get coverage in their home country (if that country is the USA and pre-existing conditions are a roadblock). These things can happen, and they can bankrupt the traveler’s family.

    Personally, I was fine traveling around the world without coverage for “stuff” however I was happy to pay for medical coverage through International Medical Group. I had my teeth cleaned a few times, and didn’t need prescrips for pharmacies. I never bothered to send a claim because the costs were so cheap.

    However, I would always recommend people ensure they have comprehensive medical coverage. Emergency treatment might be available in a host country, but if you’re going to be recuperating from a multiple fractures after jumping off a cliff into way-too-shallow water in Jamaica, you’ll be wanting to do that back in your home country. :)

    (the Jamaica story was a real situation I encountered while working in customer service for a health insurance company)

    • Hi Dave:
      Yes, I passed on the medical insurance when I went R-T-W and opted only for the medical evac policy. Although there are obviously exceptions, I have found that there is usually adequate medical services available for common injuries and illnesses, and the evac policy covered me for anything more serious. Plus the cost of medical treatment in many places overseas is much more reasonably priced than in the U.S., so I was willing to take the chance that I would have to come out of pocket for it and be reimbursed by my Blue Cross/Blue Shield upon returning. But of course, everyone has a different risk tolerance and must make the choice for themselves.
      Barbara

  32. Though policies are probably different in Australia, I have always travelled with travel insurance and never claimed on it in over 20 years of travelling – not a lost bag let alone an illness. It has cost several thousand dollars all up I guess over the years for the peace of mind. They all have eyewatering amounts of exceptions. Some credit cards provide some basic cover now and I tend to use that a little more. It is one of the trickier issues around balancing risk and insurance.
    Interesting article and viewpoint and I’d love to hear more from other readers.

  33. I’ve only purchased a medical evacuation insurance plan once, when I traveled to Malaysia for a few weeks. The cost was $25US through TravelGuard and fortunately I didn’t need it:)

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