Figure out what type of travel insurance you really need by asking these questions.
When you’re caught up in the excitement of planning your trip, the last thing you’re probably thinking about is travel insurance. You want to think about all the nice food and heart-stopping sights you’re gonna be taking in, not how your aged-parents are going to get by should you meet with a tragedy.
But because we’re pragmatists, we believe strongly in being well-prepared for all circumstances. When it comes to travel insurance, getting sufficient cover before leaving the county is a pretty smart move. Unlike other forms of insurance, travel insurance covers you only for the duration of your trip. That is why is it relatively cheap.
Furthermore, some credit cards give free travel insurance. All you have to do is to charge the cost of your trip to an eligible credit card to be automatically insured. Having said that, you may be wondering what travel insurance you need for your trip. Here’s what you should look out for.
What Insurance Do You Currently Have?
Your existing insurance plan may cover you in the case of accidents, hospitalisation, or death. But you need to determine if that protection is active while in Singapore only, or extends worldwide.
For example, you may find that your accidental death and injury plan provides global coverage, while your hospitalisation benefits only apply to Singapore. In this case, you would receive a payout for the accident you suffered but will have to pay out of pocket for any hospital fees incurred overseas.
Worldwide medical coverage plans are usually rare and expensive. Someone who is subscribed to one probably did so to circumvent restrictions on certain pre-existing conditions. However, global care plans are also likely to include coverage for emergency evacuation and repatriation, which covers the cost of flying you back to Singapore for treatment.
Find out for sure what your existing insurance plans cover you for, and where. If you have sufficient protection in your destination (including evacuation and repatriation), travel insurance might not be necessary.
What Will You Be Doing On Your Trip?
Just because you are covered for every possible mishap doesn’t give you license to go jumping out of aeroplanes at the word ‘Go!’ – not even if that’s the specific purpose of your trip.
You see, insurance is less like your cool bachelor surfer uncle, and more like your buttoned-up, eyeglass-pushing one. Insurance exists to cover you against the risks of everyday life, which we all have a measured chance of encountering. It’s not created so you can go swimming with the manta rays during their annual mass migration.
Read the fine print of your insurance policies, and you’ll quickly find a list of dangerous activities that disqualify you for the promised coverage, should anything happen to you while you’re engaged in those activities.
Hence, if you’re flying to Italy to take part in the running of the bulls, then hopping on a hot air balloon to float yourself out to safety, then strapping on a wingsuit to glide through the valley and out over the ocean, before dropping in for some free-diving and spearfishing, and then scarfing down a platter of blowfish sashimi prepared using the fish you just caught, know that whatever travel insurance plan you signed up for will be voided.
Instead, you need a separate insurance plan for extreme sports and risky activities. Even if you manage to find an insurer brave enough to insure you, be prepared to pay through the nose.
Alternatively, you could just develop superhuman resistance to injury. It’d probably be easier and cheaper.
What Will You Be Bringing With You?
Admit it, one of the highlights of taking a trip is the opportunity to refresh your social media feed with pictures of you looking oh-so-casual as you wander among the trendiest landmarks. So you pack your best pair of boots, your expensive fur-lined jacket, those overpriced shades, and of course, your S$100 selfie stick.
If the cost of the contents of your luggage is worth more than your entire trip, you might want to do some self-reflection. Ok fine, after you get that perfect profile picture.
We’re poking fun, of course, but it’s not just the social media-conscious who need to keep an eye on the net worth of what they’re checking in. If you happen to be a hobbyist travelling to attend a conference, you might find yourself travelling with some pretty expensive equipment or stuff that’s hard to replace.
If losing your luggage is going to cost you, then you should definitely get a travel insurance plan in place. Yes, there is a cap on the maximum amount you can claim, but you will at least get some compensation should you lose your bags.
Get to Know Your Needs… And Your Credit Cards
At the end of the day, deciding on a travel insurance plan is a matter of knowing what coverage you’ll need. Use the three questions above to quickly understand what areas of travel insurance you should be focussed on.
Also, get to know your credit cards. You’ll be surprised to find that besides cards that give you air miles, other credit cards can provide comprehensive travel insurance too.
When you have determined the protection you need, and which credit card provides it, getting properly insured is simply a matter of charging your trip to the right credit card.
A version of this article originally appeared on www.singsaver.com.sg, a personal finance comparison site with useful tips and guides to empower everyone in Singapore to make sound financial decisions.