There’s a lot to be learnt during short-term courses in a foreign university. Ask Srabani Das. The 34- year-old consultant with the Indian Water Management Institute learnt quite a lot while on a scholarship in the UK last year. Lesson No 1: Never leave your baggage unattended in a crowded restaurant—it might get stolen. Lesson No 2: Always buy a travel insurance plan while on an overseas trip. When Das lost her handbag containing her passport, credit cards and camera in a McDonald’s outlet in Brussels, her travel insurance plan with ICICI Lombard came in handy. The insurer first gave her emergency cash to meet immediate expenses, then helped her get a new passport and compensated for the loss of her valuables. The Rs 2,800 she had paid as premium covered her against a loss of almost Rs 20,000.
Not everyone is blessed with such foresight. Four out of five people travelling out of India don’t take travel insurance. The general refrain is that if you’ve already spent a bomb on the air tickets and hotel reservations for your foreign holiday, is there any need to shell out another Rs 4,000 or so to cover against unforeseen events?
Well, if Das’ experience is not enough, here’s another good reason. A week long stay at a state-run hospital in the UK can cost around $4,000 (roughly Rs 1.8 lakh). Enough to send your holiday plans and budget for a six. Says Sudhir Menon, head of Travel Insurance, ICICI Lombard: “Often one realises the worth of travel insurance only when one has such an experience.”
There are some countries—the UK and 15 nations in western Europe, which are part of the Schengen Agreement, for instance —where travel insurance is a prerequisite for all visitors. Yet, only about 1.2 million of the estimated six million outbound travellers from India in a year take travel insurance.
To attract customers, insurance companies have customised travel insurance plans, making them more flexible and adding clauses that cover new risks and unique situations. From the no-frills limited cover of medical expenses launchedby public-sector insurance firms in 1997, travel insurance now comes as a comprehensive plan to cover almost any travel-related emergency. Much of the credit for this change should go to private insurance companies that have changed the very perception of insurance in the country. “The risk profile of the traveller is changing. Travel insurance policies address the specific risks that different kinds of travellers may face,” says K. Krishnamoorthy, head (underwriting), Bajaj Allianz General Insurance.
The era of one-size-fits-all is gone. An insurance policy for a business traveller will be very different from one meant for a student going to a foreign university. Or a tourist going on a holiday. Earlier, travel insurance came only in blocks of 15 days. So, if you were on a three-week tour, you would have to take a 30-day cover. Now the duration of the insurance cover can be matched with the travel schedule to the last day. And you can extend the policy cover just in case you decide to extend your travel. “The customisation is so high these days, that for our corporate clients, we tailor products to suit the kind of countries their executives travel to,” says Khalid Sohail, head of Travel Insurance Services at Tata- AIG General Insurance Company.
Insurance companies categorise travellers in three broad categories— business travellers, students and tourists. Policies broadly cover medical expenses (in-patient as well as out-patient), loss of baggage and travel documents, delayed flight, even third party damages. Some comprehensive policies offercover even against hijacking.
Travel insurance is especially important for students going to foreign universities. Many universities do offer insurance to students but these are mostly medical covers. It is important to take non-medical cover too. For instance, if a student is unable to continue his studies due to sickness, there’s a policy
which reimburses the tuition fee that has been paid in advance.
There’s more. If a student is hospitalised for a week or more and requires a family member in attendance, the insurance policy provides a return ticket from India for one family member besides an accommodation allowance during the stay abroad. A similar cover is extended to the student in case of death or hospitalisation of parents, spouse or children back in India. What’s more, there is even a bail bond cover, just in case one is found on the wrong side. Of course, all these are add-on covers that come for an extra premium over and above the basic policy.
The globetrotting businessman, however, has entirely different needs. A single entry-single country kind of plan doesn’t work for him. That’s why insurance companies offer policies that take into account multiple destinations, with multiple entries for a year. “You pay a flat rate, instead of piecemeal payments for duration-specific standalone policies,” explains Krishnamoorthy. The cover is higher than an ordinary travel plan. For instance, a standard travel package covers you for medical expenses up to $100,000. This policy covers you for up to $500,000.
Then there are policies customised for software professionals who frequently go abroad for shortterm offshore assignments. “We have partners who function out of every possible country that one may wish to travel, and moderate plans to suit the software army,” adds Sohail. However, many large corporate entities with large workforce on offshore sites prefer to deal with local insurance companies in these countries. Not only is it cost effective but also convenient.
But just as travel insurance is important, so is understanding the rules that govern it. All policies require that the insured person pays a small portion of the total expense. For instance, if you make a claim for medical expenses, the first $100 of the total bill would have to be borne by you. This prevents frivolous claims. Similarly, a claim for lost baggage must be accompanied by a letter from the airport authority certifying the loss.
(With Tanmoy Neog)