What Is Travel Insurance and How Does It Work When You’re Abroad?

International travel introduces possibilities of new experiences, career development and personal enrichment. Travel insurance helps to facilitate such trips through providing structured cover to healthcare requirements, travel plans as well as necessary support facilities overseas. With a clear understanding of ‘what is travel insurance and how it operates’, you can plan trips with clarity and ensure compliance with travel requirements.

An Overview of Travel Insurance

Travel insurance is defined as a contract between an insurance company and you and this covers you against unexpected events. Through this agreement, the insurer agrees to cover travel risks of the policyholder in exchange for a premium. The coverage is valid within the given travel period. The primary purpose of travel insurance is to provide a financial safety net against unforeseen events that may lead to financial loss.

Components of Travel Insurance Coverage

There are four primary components of travel medical insurance, which are as follows:

Medical and Emergency Services

Medical coverage is the primary component of travel insurance. It often covers expenses related to hospitalisation, emergency medical treatment and doctor consultations. In severe conditions, you may also be admitted to the nearest medical facility or repatriated to your home country. Some travel insurers also assist in dental treatment and ambulance services are also included.

Trip and Journey Related Coverage

Travel insurance also addresses losses caused by disruptions to travel plans. Some of them include reimbursement for trip cancellation due to medical reasons or flight delays. For example, insurers like HDFC ERGO offer policyholders 24/7 claim assistance and trip cancellation protection due to unforeseen circumstances.

Baggage Protection

Loss or delay of checked baggage is another commonly covered under travel insurance. After the specified period, policies may reimburse the loss incurred due to baggage delays. This protection aims to strengthen your financial protection to cover the cost of essential items purchased due to baggage delays or loss.

Personal Liability

Travel insurance is equipped with personal accident cover in case of accidental injury or death during the trip. The personal liability cover also assists you in compensating third-party damages while abroad.

Types of Travel Insurance Plans

There are primarily six types of travel insurance plans, which are as follows:

• Individual Travel Insurance: This policy is best suited to individuals who like solo trips or often travel for business purposes.
• Family Travel Insurance: The type of travel insurance is designed to meet the needs of families that are planning international trips and covers a maximum of 12 individuals.
• Multi-Trip Travel Insurance: This plan is designed for individuals who often need to travel abroad for personal reasons or business purposes.
• Student Travel Insurance: This plan is suited to students and it covers up to 2 years of travel insurance. The age eligibility of the plan is specific to 16 to 35 years.
• Schengen Travel Insurance: The Schengen region has some specific travel insurance requirements. Travel insurance for Schengen visas requires tourists to be insured for a minimum of €30,000 of coverage.
• Senior Citizens Travel Insurance: The plan is designed to cover travellers aged 60 and above and includes medical emergencies, hospitalisation, baggage loss, trip cancellation and passport loss.

How Travel Insurance Works?

The working principle of travel insurance is followed by a simple process, which is as follows:

Purchase and Activation

Travel insurance is usually bought before the start of the journey. The travel start date indicated in the policy schedule is the date on which coverage will be activated and will continue till the day of return. Many insurers do not allow travel medical insurance purchase after departure, so timely planning becomes necessary.

Paying the Premium

Travel insurance premium is determined by a number of factors, including destination, length of trip, age of the traveller and the benefits you have chosen. Coverage limits, deductibles, exclusions and claim procedures are stated in the policy document. These are some of the terms that should be reviewed prior to travelling so that one knows what to expect in case of a claim.

Making a Claim Abroad

In the event of an insured occurrence abroad, the traveller should report the occurrence to the insurer as soon as possible. In the case of theft, claims usually have to be provided with documents like medical reports, bills, boarding passes and police reports. The claims are submitted either via online portal, email, or specific helplines, based on the procedure of the insurer.

Cashless Services

Some travel insurance policies provide cashless hospitalisation through the network of international hospitals. In these instances, treatment costs are paid by the insurer.

Final Thoughts

Travel insurance is an important aspect of international trips as it helps to strengthen your financial buffers for emergency needs. These policies also bring structured assistance for trip-related issues such as flight cancellation or baggage loss. In terms of medical assistance, insurers make sure that you get the required financial assistance during medical emergencies. Therefore, with the right coverage and knowledge of how the policies work, you can be insured from all travel-related uncertainties.