If you’re thinking of buying a travel insurance policy for your summer vacation, here’s a thought: Why not get one for the whole year?
If you take more than two trips in 2018, you could save money by choosing an annual policy instead of insuring each trip separately, experts say. But most annual coverage comes with significant restrictions and limitations, and it can be difficult to find. Before you buy, you have to run a few numbers and read the fine print.
Consider what happened to Gary Arndt when he embarked on an open-ended trip around the world more than a decade ago.
First, he priced a regular policy, which would have cost somewhere between $114 and $204 per segment, depending on the length and type of coverage. An annual policy, by comparison, cost $459.
«Assuming I had a series of one- to two-week policies that I had instead of an annual policy, I would have had to pay anywhere between $2,000 to $5,000 per year for the same coverage,» he says.
Arndt, a professional photographer who publishes the blog Everything-Everywhere.com, went with the annual policy. And although he doesn’t travel full-time anymore, he has kept his coverage.
«Overall, an annual policy is a fantastic deal for anyone who does multiple international trips per year,» he says.
So should you buy an annual policy? Maybe.
Annual policies differ from typical travel insurance purchased on a per-trip basis in at least one important way. They tend to focus on medical coverage, as opposed to cancellation benefits. That’s because it’s difficult for insurance underwriters to know how much you’ll spend on your trips, and they are trying to limit their exposure, according to Damian Tysdal, who publishes the site Travelinsurancereview.net.
«An annual plan might be right for you if you are taking multiple trips throughout the year, especially abroad where you will need medical coverage, but cancellation is not your primary concern,» he says.
For example, the basic version of Arndt’s annual policy doesn’t have any cancellation benefits. Rather, it offers emergency medical transportation, auto rental collision damage waiver and accident coverage. Several travel insurance companies, including Allianz Travel Insurance, HTH Worldwide, International Medical Group, RoamRight, Seven Corners and Travel Guard, offer annual policies. You can pay extra for additional cancellation coverage.
Another limit: trip length.
«Buried in the fine print, it states that a single trip during the calendar year is limited to maximum 45 days duration,» says Jeffrey McElwee, who works for a tour operator in Nampa, Idaho. «So, you might think you have a year’s worth of coverage but need to coordinate trips to fit the fine print details. Even if you get sick within the 45-day limit, if your planned itinerary was longer than the 45 days, they will still refuse payment.»
You might also run into a problem if you have an appetite for adventure.
«If you’re taking business trips, visiting grandma and taking the occasional family trip, cruise or all-inclusive stay, you may be OK,» says Margie Jordan, who works for a travel agency in Jacksonville. «But if you like to add in a little adventure, like ziplining, scuba diving, hiking, white water rafting or just like to travel deeper, you might want to explore what your annual policy covers — and more importantly, what it doesn’t.»
Regular travel insurance has those restrictions, too, plus limits on coverage for pre-existing medical conditions. Sometimes you have to get extra insurance to address those gaps. That’s a strategy Carl Lehman uses. He purchases an annual policy but then adds extra policies as needed.
«I have an annual policy for unlimited trips under 40 days each,» explains Lehman, a retired audit manager for the Canadian government. «I can purchase additional coverage for any extended trip.»
As a travel writer, I spend 365 days a year on the road and have no permanent residence. So an annual policy was a clear choice. I went with one that offers a modest $5,000 in trip cancellation and trip interruption benefits. It also provides my family with $50,000 in emergency medical and dental coverage and $250,000 in emergency medical transportation.
Some of my travel purchases are also covered through my Visa card. My primary health insurance covers us for health care domestically.
Even with all of the restrictions, the travel professionals I spoke with were unanimous that an annual policy is worth a look. «I wouldn’t leave home without it,» says Michelle Weller, a travel agent with Travel Leaders in Houston.
Neither would I.
How to shop for travel insurance
• Take a quick inventory of your upcoming trips. The cost of a single insurance package, in most cases, is less than half the cost of an annual package, according to Stan Sandberg, co-founder of TravelInsurance.com, a travel insurance comparison website. That makes single-trip insurance the logical choice for anyone who plans to take two vacations or less per year.
• Compare, compare, compare. In addition to TravelInsurance.com, you can easily compare policies on sites such as InsureMyTrip.com, Quotewright.com, Squaremouth.com, TripInsurance.com and TripInsuranceZone.com. Because annual policies are such a niche product, you sometimes have to search a while to find an annual policy. This list on Travelinsurancereview.com may be helpful: travelinsurancereview.net/plans/annual.
• Check to see if you’re already covered. That’s the advice of Joel Ohman, a financial planner who founded the site InsuranceProviders.com. «You could potentially end up buying a policy that has some duplication of benefits with what you already have,» he says.
Your sister’s planning a destination wedding in the Caribbean. Your college buddies are begging you to fly home for the reunion. And you’ve already planned a cruise vacation for you and your family next spring. It’s going to be an exciting year — and an expensive one, too.
If you plan to take multiple trips in the coming year, you may want to think about an annual travel insurance plan. Here are the three things you need to know before buying multi-trip insurance.
1. You can save money with an annual travel insurance plan.
You already know you need a comprehensive travel insurance plan in case of medical emergencies or other unexpected events while you’re traveling. If you’re planning three or more separate trips in a year, you can cover them all for less with an annual travel insurance plan.
Most annual plans offer a year’s worth of protection for health, property and trip costs. Look for a travel insurance policy that offers emergency medical coverage, coverage in case of illness or death of a family member and travel delay coverage, among other things. Keep in mind that most annual trip insurance plans have a coverage limit for trip cancellations and trip interruptions.
2. Annual travel insurance plans are great for business travelers.
If you’re a frequent traveler for business reasons, a multi-trip insurance plan is a must. You’re familiar with all the things that can go wrong, such as flight delays and misplaced luggage. And you know that a sudden trip cancellation or trip interruption may mean you lose business — and money.
Protect yourself with a multi-trip insurance policy that’s designed for business travelers. Look for a plan that offers coverage for special situations, such as business equipment coverage, rental car collision coverage, and business concierge assistance.
3. Multi-trip travel insurance keeps things simple.
If you’re taking three trips this year, you’re not going to buy three suitcases. Why would you buy three separate travel insurance plans?
Trip insurance policies can be complicated. You always need to read the fine print carefully, so you understand exactly what you’re buying and what’s covered. It makes life much easier if you buy a single, multi-trip policy that covers you all year, instead of buying a new plan for every vacation you take. Just make sure you review your insurance plan carefully before you buy because not all plans offer the same coverage.
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