Travel Insurance to the Rescue!


Have you ever considered purchasing travel insurance but weren’t sure how it works or if it would even be worth it? Fear not!  Determining whether you need coverage and obtaining it if you do is simply a matter of knowing the answers to three questions.

Travel insurance can be beneficial in many scenarios.  For example, what if:

  • You have a medical emergency a few weeks prior to your trip?
  • Your luggage is lost, stolen or damaged?
  • Your flight is canceled and you have to stay an extra night?

Travel insurance is a safety net that can see you through numerous unexpected issues. But don’t rush out to purchase coverage on your upcoming getaway just yet. Travel insurance can be an invaluable expense, but it may not be a necessary one. Before you buy, be sure you know the answers to the following three questions.

#1  Do I Actually Need Coverage?

If the answer is yes to either of the following questions, you’ll want to consider purchasing travel insurance to protect yourself financially.

  • Are you prepaying for a costly vacation?
  • Are you planning a foreign trip and your health insurance coverage is limited to the U.S.?

If you’re prepaying for an expensive trip, travel insurance provides protection if your vacation is canceled or interrupted. Travel insurance reimburses unused, prepaid experiences such as flight costs and hotel stays as long as the cancellation/interruption circumstance is covered. “Covered circumstances” may include jury duty, hurricane or natural disaster, legal separation or divorce, or injury or illness of the insured or a family member prior to or during the trip. Every policy differs, so read the fine print to determine the coverage.

Travel insurance becomes particularly important if your health insurance doesn’t provide coverage in foreign countries. Are you insured by Medicare? According to the Centers for Disease Control and Prevention (CDC), the Social Security Medicare program does not provide coverage for medical costs outside the U.S.  However, some Medigap and Supplemental Medicare programs do provide limited overseas coverage.

What if you have a preexisting condition?  Be aware that most travel insurance policies won’t cover preexisting conditions. The CDC lists preexisting illness and poor documentation as the main reasons companies refuse claims. You may be able to purchase a waiver of preexisting conditions, however.  Paying more for additional coverage for known medical conditions is worth every penny should such arise before or during your vacation.

Bottom line: If the financial risk of missing out on a prepaid vacation or the possibility of experiencing emergency health issues abroad is too great, travel insurance is a wise investment.

#2  What Type of Travel Insurance Do I Need?

Coverage comes in all different shapes and sizes. Insurance policies for standard travel, travel health, and medical evacuation can be purchased separately or as a comprehensive package, depending on the provider.

  • Standard travel insurance. Protects against trip cancellation/interruption, flight cancellation/delays and lost/stolen luggage. It may include emergency medical coverage.
  • Travel health insurance. Provides short-term medical coverage in foreign countries.
  • Medical evacuation insurance. Covers evacuation expenses resulting from a medical emergency. According to the CDC, these costs range from $20,000 to $250,000.

Tip: Surprise! You may already have some travel insurance. Often credit card companies provide a certain amount of coverage for specific issues like flight cancellations or lost baggage. Prior to purchasing coverage, check into the benefits you may already have.

#3  When and Where Should I Buy Coverage?

Often people plan and pay for costly vacations months in advance. If you decide to purchase travel insurance, do so shortly after your trip is booked.  A window of 15 days after booking is ideal, according to Berkshire Hathaway Travel Protection.  It’s possible to purchase coverage up until the day before you leave, but available coverage may not be as extensive.

Private insurance companies, insurance brokers, travel agents, and travel insurance websites all sell coverage. Investigate several options and compare the policy offerings regarding the amount and type of coverage, as well as the cost.

One last tip: If you’re a frequent international traveler, consider an annual renewable policy to eliminate the task of purchasing coverage for each trip.


Obtaining travel insurance may be the last thing on your mind when planning your next vacation.  It shouldn’t be!  Prepayment for expensive vacations and inadequate health insurance coverage abroad are two automatic qualifiers for considering travel insurance.  See what coverage may already be available to you and shop around for any additional layers of protection you need.  Your next vacation will be more enjoyable knowing you’re covered!

Abby VanDerHeyden, CFP, is a Financial Planner with Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit their website or email Abby.

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