Cover your family adequately before proceeding on a vacation

When travelling to countries like the US and Canada, take extra cover as hospitalisation costs are exorbitant

When a family is planning to fly abroad on vacation, medical emergencies, illnesses and loss of baggage are the last things on their minds. However, bad things do happen. To prevent your holiday from turning into a nightmare, ensure that your family is comprehensively covered against a variety of unforeseen events, by purchasing the right travel insurance policy. 

Most overseas travel policies typically cover hospitalisation, personal accident, loss or delay of baggage, trip cancellation, loss of passport, and a few other things. Since premium charges are quite low, one should not risk travelling without adequate travel insurance. For a 30-year-old male and a sum insured of $50,000, the premium of TATA AIG Travel Guard is Rs 1,190 for a 15-day trip to the US. The premium for an HDFC Ergo policy that covers a single trip of seven days to Australia and France is Rs 439, according to Policybazaar.

  

Covers are important: Many policyholders do not buy adequate cover when travelling abroad. “Especially if a person is travelling to the US or Canada, he should buy a cover of around $200,000-2,50,000, since medical costs are very high there. In both these countries, even a small medical consultation can cost a lot compared to India and other countries,” says Puneet Sahni, assistant vice-president, product development at SBI General Insurance. Buying a policy with a high sum assured becomes all the more important if one is going to stay in these countries for a month or two.

Look for these features: Customers should not purchase blindly whatever policy their travel agent foists on them but should rely on their own research. They should visit portals of various insurance companies, or aggregators, compare features and prices, and make an informed purchase. “Policyholders should not just follow what their agents tell them because they don’t have expertise in selling travel insurance or in settling claims. In fact, they can easily buy this policy themselves,” says Rakesh Goyal, director, Probus Insurance Brokers Ltd.

Buyers should check out how much they will be reimbursed if their baggage gets lost, or if they miss their connecting flight. Many policies also offer emergency cash advance facility. In case of emergencies, insurance companies rush $500-1,000 to them. 

Many insurance companies also cover pre-existing medical conditions, albeit within limits. “Many policyholders make the mistake of not buying pre-existing diseases cover. This should be avoided,” says Tarun Mathur, director, Policybazaar.com. 

Buyers should ensure the policy they buy offers personal liability cover. In case of an accident, if they hurt someone, they could end up getting sued. Having this cover will ensure they don’t end up paying from their own pocket. A family travelling to very remote areas should also make sure their policy offers evacuation facility.

Watch out for sub-limits and deductions: The most important feature in a travel policy is the hospitalisation cover. Make sure there are no sub-limits in your policy for this feature. Read the fine print to see if there are sub-limits for people above 50. 

Most policies come with sub-limits on the relatively less important features, such as dental treatment, loss of baggage, loss of passport, and so on. Policyholders should compare policies to see which ones offer the best limits on these features. 

Policyholders should also look at exclusions. Some policies do not cover delay in baggage on the return journey. It is a good idea to opt for a policy that offers door-to-door coverage.

Some policies also come with deductibles. If the deductible on a policy is $500, it means you will have to bear the first $500 of expenditure. The insurance company will reimburse you for expenses over and above this. Make sure the deductible on your policy is within reasonable limits, which you can afford. 

Choose the right insurer: Check the claim settlement ratio of different insurers for travel insurance policies and go with an insurer who has a relatively high ratio. You can obtain this data easily from the handbook of insurance statistics available on the Insurance Regulatory and Development Authority of India’s (Irdai’s) website.     

All the services will be provided in a foreign country. Hence, the quality of the service provider with which your insurance company has a tie-up becomes very important. Make sure the service provider operates in the country you are visiting. 

Most non-life insurers sell travel insurance. “A few health insurance companies also sell  travel insurance. Customers should only buy policies from players with expertise, good brand, and a solid record in settling claims,” adds Goyal. 

Before you begin the journey, learn the procedure to be followed in case of an emergency. Store the emergency helpline number where it will be available even if your baggage gets lost. In case of loss of baggage, you may be required to file a First Information Report. If the passport gets lost, you may be required to inform the Indian consulate. Going through the kit that comes with the policy will help you become aware of the procedures to be followed in case of different emergencies.