Following the post-COVID stimulus hangover in 2022, the bull market has continued to run. One of the key factors was the Federal Reserve’s decision to
Travel Insurance: A Different Type of Investment
Published Date : December 22, 2015
There’s no denying it now – the holiday season is in full swing. And for many, the holiday season means travel – to visit family or to take a long-planned vacation while the kids are out of school – and we hope your travel goes well this season! As often happens in life, though, things don’t always go according to plan. What if you get terribly sick right before leaving or break a leg while hanging the holiday lights? Depending on where you’re headed, you may be subjected to flight delays or even cancellations due to bad weather. While the likelihood of these events impacting your trip may seem remote – and you may be willing to roll the dice even knowing the risks – it might be wise to consider travel insurance.
If you’re an American Express cardholder, you’ve probably grown accustomed to seeing a charge for flight insurance posted to your account right after purchasing an airline ticket. Have you ever wondered what you’re getting for that insurance? What does it cover anyway? Most likely this is an Accidental, Death and Dismemberment (AD&D) policy with a coverage limit specified by you when you signed up for the policy – one of their cardholder benefits. If you’re like me, you’ll need to call American Express to refresh your memory on your coverage limit and beneficiary designation (yes, there is a beneficiary designation they keep on file). Simply put, if you lose a leg on your trip, call American Express and they’ll help you file a claim. If you get sick and can’t take your trip, don’t bother as it’s not that type of insurance.
Fortunately, there are many more carriers in the travel insurance marketplace these days who offer coverage beyond the typical cancellation for medical reasons. Travel insurance can be purchased to include coverage for flight delays, overbooked accommodations that boot you to a different hotel or simply changing your mind. Traditional insurance carriers like AIG, Allianz and Nationwide all offer comprehensive options. InsureMyTrip.com provides access to over 32 different carriers and helps users customize coverage to their needs. Travelling with kids? It might be in your best interest to check for a policy that covers emergency medical care while you’re away from home, as children are the ones most likely to suffer broken bones or contract a nasty stomach bug in the middle of a dream vacation. Unfortunately, many primary care insurers refuse to cover medical expenses for patients seeking treatment outside of their coverage area. It is important to know how your health insurance policy handles these situations before the need arises.
Why this seemingly sudden boom in travel insurance? While the skies may still be friendly, airlines are not so much these days. Airlines have taken to increasing the number of non-refundable tickets sold, thus putting the risk squarely on consumers when plans change for whatever reason. Insurance companies are looking to capitalize on this change by making their travel policies more accessible and affordable. This is a good thing for the consumer looking to share or entirely offload the risk of a cancelled flight on to the back of an insurance company.
As with investing, your risk tolerance and ability to recover from a significant loss are two major factors when considering the purchase of a travel insurance policy. While the loss of airfare for a cancelled trip to grandmother’s house may not impact you financially, cancelling your once-in-a-lifetime trip around the world – with the associated hefty price tag – just might. In this case, the cost of a travel insurance policy would be money well spent. Just don’t forget to read the fine print.
Resources: www.InsureMyTrip.com, Time Magazine “Travel Insurance: No Longer Just for the Overprepared”
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