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Insurance Basics

When people think of travel insurance, they are moreoften than not looking for a plan to protect their Vacation. Vacation Plans mayalso be referred to as Packaged Plans, Travel Insurance, Trip CancellationInsurance, or Trip Insurance. These plans represent over 94% of travelinsurance sales because they provide coverage for exactly what travelers areseeking, which is generally a number of different reasons for delay, cancellation,loss, and so on as you will see in greater detail below.

Overall there are there distinct types of travelinsurance that you could choose from. 

1. ComprehensivePlans: plans with trip cancellation and travel medical options, theseprovide the most coverage and are generally the most expensive as a result;

2. Limited or Travel MedicalPlans: plans that will provide coverage in the event of an illness or injurywhile you are traveling.  Most regularhealth insurance plans provide partial or no coverage while you are travelingoutside of your home country.  TravelMedical Insurance plans provide coverage above and beyond your regular healthprovider.  These plans may not alwaysinclude coverage for trip cancellation; and

3. Specialty Plans:plans with specialty coverage such as Accidental Death or Dismemberment (whichmay include evacuation, but will often exclude coverage for death ordismemberment resulting from an act of war). Some of these plans may also have trip cancellation and/or medicalcoverage.  While there are many specialtyplans to choose from for your unique needs, most often, these plans are toonarrow for the majority of travelers taking a vacation.

Any of the plans above may also qualify for the SchengenVisa upon entering one of more European countries if the following requirementsare satisfied:

- Coverage of medical emergency has to be at least EUR 30,000  (approx. USD 50,000) and valid for all the Schengen States.

- Any expenses for medical treatment, hospitalization, medical evacuation and medical repatriation back into the U.S. must be covered.

- The fact that medical evacuation, medical repatriation and repatriation of remains are covered has to be spelled out

- Only insurance confirmation issued by your health provider is accepted. Confirmation letters by your employer are not accepted.

 

COMPREHENSIVE PLANS: TripCancellation

Comprehensive plans are the most common.  From our experience over 90% of travelers choosethis option.  These plans combine all thebenefits of Travel Medical plans with the Trip Cancellation option.

Trip Cancellation option gives you the ability to cancel yourtrip before it starts and receive reimbursement for 100% of your otherwisenon-refundable prepaid trip expenses. There are many covered reasons for trip cancellation (check your certificateof insurance to see all covered reasons), however the most common is suddensickness or injury preventing you from taking a trip. This also often appliesto your family members and travel companion(s). You may cancel your trip ifyour travel companion or a family member became sick or injured.  Qualifying family members vary among carriers,so please see your certificate of insurance to identify which family membersare included for purposes of trip cancellation coverage.

The trip cancellation option is often the primary reasonpeople buy insurance, however it poses the highest risk for insurance companiesand therefore results in the greatest insurance cost to you.

To limit the risk exposure to the insurance provider inthe event of a trip cancellation for medical reasons, the insurance companiesintroduced Pre-Existing Medical condition clause.  A pre-existing medical condition is classifiedas a medical issue that you have been treated for in the past "x"days, before purchasing travel insurance.  Different insurance companies have setdifferent "x" days – this is considered the look-back period.  The look-back period may range anywhere from afew months to a few years.  If yourmedical condition was treated or changed in any way before the look-backperiod, your coverage in the event of a trip cancellation for medical reasonsshould not be impacted.

If your medical condition was treated or changed in anyway during the look-back period, you may still be eligible for tripcancellation coverage in some circumstances, namely by purchasing a plan thatwill include a Pre-Existing Medical Condition Waiver. To avoid the exposure youwill have had to purchase Travel Insurance within 10-21 days (depending ofinsurance company) after you paid the initial deposit for your trip. There areplans that give you Pre-Existing Medical Condition Waiver even when you buyTravel Insurance before final payment or no later than 1 day after the finalpayment for your trip. Our software will help you sort this out easily.

Please also note that anadditional requirement for the Pre-Existing Medical Condition Waiver is thatthe insured amount must be no less than 100% of your non-refundable prepaidtrip expenses.    

Overall, the Comprehensive Plan options provide thehighest protection before and during your trip, covering trip cancellations andinterruptions, travel delays, missed connections, medical emergencies, medicaland non-medical evacuations, baggage loss or delay, 24 hour- assistance, andmore.

 

LIMITED PLANS: Planswithout Trip Cancellation Option

These plans give you medical coverage while travelingprimarily but not exclusively outside of your home country. Your regular healthinsurance most likely provides very limited or no coverage while you are abroadand the Travel Medical Plans are designed to fill that gap in the course ofyour travels.

The main benefit of buying this type of plan compared tobuying Comprehensive Plans that include coverage for Trip Cancellation is thecost.  Depending on your actual optionsand coverage limits, a Travel Medical Plan may cost a fraction of theComprehensive Plan cost.

These Travel Medical plans are usually selected in 3cases:

-      There is little time left before you take the trip, thechance of trip cancellation is slim, and you are willing to assume that risk;

-      You are in good health and have a high risk tolerance.The benefit of lower insurance cost outweighs the risk of losing money for yourtrip; or

-      A rare case when the trip is so important that tripcancellation is not an option. Only severe injury would prevent you from takinga trip, but not a sickness that could otherwise prevent you from taking atrip.  You must possess some risktolerance.

Some Travel Medical plans may also provide full coveragefor trip interruption, trip delays, baggage, medical emergencies andevacuations, while others may limit coverage to medical emergencies andevacuations only. Some Travel Medical plans may have limited life insurancecoverage as well.

Travel Medical plans have the same or similar terms forpre-existing medical conditions as Comprehensive Plans. Most often, you canavoid exposure by purchasing Travel Insurance within 10-21 days (depending onthe insurance provider) after you paid the initial deposit for your trip. Oursoftware will help you sort this out easily.

Some Travel Medical plans may provide renewableprotection as well as coverage for long-term travel abroad. 

Please note you might not be covered by yourhealth insurance when you travel abroad. Many private companies, as well asMedicare and Medicaid programs, do not cover emergency treatment outside of thecountry. Without travel insurance coverage, should an emergency occur, you and your family could incur medicalbills that you need to pay for out of your own pocket.


SPECIALTY PLANS

If you are not concerned with trip cancellation ormedical expense, or do not want to bear the expense of a Comprehensive Plan,but do want to mitigate some particular risk, there are Specialty Plansavailable that may be the best fit for you. These may be Flight-Only, AccidentalDeath or Dismemberment, Evacuation-only, or Rental car plans.

Evacuation plans focus on emergency evacuations, and areoften sold on an annual basis as a membership. With an evacuation plan, the companyarranges transport, and you will not lose your savings to a costly emergency evacuation.

Accident plans provide life insurance style coverage fortravelers. It pays benefits if you should have a serious injury that results indismemberment or loss of life. Benefits paid by these accident plans are inaddition to any benefits paid by separate life insurance plans.

 

If you have questions about any particular plan, or wouldlike assistance in making your next travel insurance selection, we areavailable to walk you through all of your options.  Please contact us at support@travelinsurancemaster.com.

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