“All my bags are packed, I’m ready to go...” Is this John Denver’ number on your lips already? Well, then it’s time to head out on that much-awaited vacation with your loved ones. But before you leave for that exotic destinations, be sure to have your travel insurance tucked inside your prized Jimmy Choo bag. For many of us, the extra cost may seem unnecessary. But it’s one travel thingamajig you must have with you.

What it covers

Travel insurance ideally covers travel-related risks. These include flight delays and cancellations, passport or baggage loss, emergency medical expenses, and other losses while travelling. Travel insurance is available for both international and domestic travel.

Taking a cover for your foreign travel is particularly imperative as travel insurance can reduce your financial burden in case of trip cancellation or interruption, trip delay, lost or delayed baggage, medical expenses and personal liability.

In a nutshell, travel insurance saves you a lot of trouble and moolah in case of a mishap. Imagine you’ve spent a fortune planning your Europe vacation and just a day before the travel, there is a personal emergency preventing you from making the trip. While your airline may refuse to give back your money, a trip cancellation cover can reimburse you for flight costs — but only for specific and unavoidable reasons laid down in the policy.

If you suffer from an illness or injury during your overseas travel, sudden medical expenses can burn a hole in your pocket. A travel plan that covers emergency medical expenses and extends daily allowance in case of hospitalisation can be helpful.

A travel insurance can also ease some of the stress and pain caused due to loss of baggage or passport. Personal accident, covering death or permanent total disablement due to an unfortunate accident, or personal liability compensating for any third-party damage are other important covers offered under travel plans.

Hijack cover and emergency cash benefit are some other covers offered by most insurers.

Hence, travel insurance plans can cover you quite comprehensively from medical-, journey- and baggage-related risks. The premium a 30-year-old has to pay for making multi-trips worldwide, with a $250,000 coverage, is just ₹3,500-4,000.

How to select

But how do you go about choosing a travel plan from the plethora of options?

First, you need to assess the type of travel insurance you may need. Insurance players offer plans for individuals, family, students, senior citizens, and so on. If you are travelling with your family, go for a plan that covers you and your spouse (and generally two children). The next step is to zero in on the type of plan offering different coverages. This is important as it will vary, depending on your destination, duration of the trip, purpose of travel, etc.

All travel insurance plans come with a total coverage or sum assured. The higher the sum assured, the higher the premium. So, be sure to choose a plan that best suits you. For instance, under Bajaj Allianz Travel Prime Plan, you can choose from a standard $50,000 coverage or a Silver $1-lakh cover. Select one that is adequate for you.

But remember, this is the maximum cover one can get under the plan. There are caps on specific benefits. For instance, TATA AIG’s Travel Guard Gold policy covers medical expenses up to $250,000; accidental death compensation is $5,000, whereas loss of checked baggage is covered up to $1,000. Under Bajaj Allianz’s Travel Prime Gold Plan, while medical expenses are covered up to $2,00,000, daily hospitalisation allowance is $25 per day up to a maximum of $125. Under HDFC ERGO’s platinum plan, medical expenses are covered up to $200,000, while hospital cash is $15 per day, up to a maximum of $150.

So, compare various plans and look at various benefits before deciding.

Sub-limits and deductibles

You also need to be mindful of sub-limits and deductibles before choosing a plan. Most travel insurance plans offer comprehensive medical coverage (without sub-limits) only up to a certain age. After that, there are sub-limits on hospital room, surgical treatment, physician’s fees, diagnostics, etc. Some insurers offer a no sub-limit plan, but with a cost.

Deductibles is the amount that the insured has to bear before the insurance amount can be claimed. Common deductibles under travel insurance plans pertain to medical expenses, loss of passport, personal liability, trip delay, or delay in checked baggage. For example, under HDFC ERGO, most plans have a deductible of $100 for medical expenses, $30 for loss baggage and personal documents, and a maximum of 50 per cent per bag in case of loss of checked baggage. The deductible in case of checked baggage delay is laid down in terms of duration. You are not paid for first few hours of baggage delay, which is generally 12 hours.

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