Student travel insurance cover: Buy before setting off to study abroad

But ensure that your policy aligns with your foreign university's requirements

Avantika Singh, 32, will head to the United States (US) in the last week of August to start a nine-month Masters in Engineering programme at the University of California, Irvine. She is not sure whether she should purchase an insurance cover from India or do so once she lands in the US.

Like Singh, thousands of Indian students are currently gearing up to embark on a life-changing journey abroad for higher studies. Experts say they should arm themselves with a comprehensive student travel insurance policy before they leave Indian shores.

Contrary to what its name suggests, this plan is more than just a travel cover. It is a safety net that safeguards students from unexpected financial setbacks due to medical contingencies, travel disruptions, and even legal troubles abroad.

Buy at home or abroad?

Most experts favour buying a plan from India. According to Bhabatosh Mishra, director-underwriting, products and claims, Niva Bupa Health Insurance, “Indian insurers charge lower premiums compared to their foreign counterparts. Furthermore, having a policy from India means that in case of an emergency, a family member back home can notify the insurer and ensure that the insurance requirements are handled efficiently. This eases the burden on the student who would otherwise have to manage it alone in a foreign land.”

Indian policies are also more comprehensive. Says Aditya Sharma, chief distribution officer, retail sales, Bajaj Allianz General Insurance: “A health insurance plan purchased from a foreign university will not cover the student during travels to and from India, as Indian policies will. Plans bought in India also cover a contingency visit by a family member if the student falls ill abroad. These policies also provide personal liability cover. And they also cover the student on visits to other countries during holidays.”

Buying a cover in India may also be the more prudent choice. Says Naval Goel, chief executive officer (CEO), PolicyX: “The student could face difficulties in obtaining a cover abroad, given the varied terms and conditions that prevail in foreign countries.” A student who decides to purchase a policy in India must, however, ensure that it meets her university’s coverage criteria.

Sum insured: Meet univ norms, then buy a little more

Students should first check the sum insured required by their university. That should be the baseline cover they should buy.

Beyond that, they should buy what they can afford. Buying a higher cover is especially crucial for students heading to the US or to Canada, where health care costs are exorbitant.

Says Manas Kapoor, product head-travel insurance, Policybazaar.com: “If the student is going abroad for a short-term exchange programme of one week to three months, then a cover of $50,000 or $1 lakh may suffice. But if she is going for a one- to two-year programme, then a cover ranging from $2.5 lakh to $5 lakh is ideal.”

Sharma recommends a sum insured of $10 lakh for students heading to the US for a year.

How much is the premium?

Premium costs vary depending on the sum insured, policy features, and countries covered. According to Kapoor, the cover usually costs around 1-2 per cent of the tuition fee. Mishra informs that a cover of $1 lakh for one year is likely to cost around Rs 18,500-20,000.

Sharma estimates that a $10 lakh cover would cost anywhere between Rs 30,000 and Rs 50,000, with premiums being lower if coverage in the US and Canada is excluded.

Must-have features

Student travel insurance plans offer a wide menu of features. On the medical side, they cover hospitalisation, outpatient department (OPD) and dental treatment, medical evacuation, and repatriation of remains.

They also cover travel-related incidents such as loss of baggage; lost electronic items, passport and driving licence; and flight delay or trip cancellation. Legal covers include personal liability (in case the student causes harm to someone or their property) and bail bond cover (in case the student gets arrested).

Study-related covers include study interruption and sponsor protection (if the person funding the student’s studies passes away, the plan makes a payout).

Watch out for exclusions

Standard plans usually do not cover pre-existing diseases, non-prescription drugs, diseases arising from alcohol and drug consumption, experimental or non-standard treatments, and cosmetic surgery. Other exclusions might include adventure sports, HIV-AIDS related illnesses, war, etc. However, students can buy coverage for some of these exclusions, such as pre-existing diseases, as an add-on.

Will settlement be cashless?

Indian insurers partner with international assistance companies for efficient claim settlement. For example, Bajaj Allianz customers are assisted by Allianz Partners in 156 countries. Niva Bupa partners with Europ Assistance. “These partnerships enable cashless treatment for students, especially when hospitalisation is for more than 24 hours and treatment takes place in a network hospital,” says Kapoor. Study-related benefits, he adds, are offered in the form of reimbursement.

Mistakes to avoid

Mishra suggests students buy this cover well in advance and not leave the decision to the last moment.

Sharma suggests comparing the coverages and premiums offered by various insurers.

Make sure that the policy suits the duration of your course and provides adequate geographical coverage based on your needs. A student studying in Canada, for instance, might want to include coverage for the US, as she is likely to visit that country during her study period.