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For a Safe Flight

Chandralekha Mukerji | Print Edition: May 2012

While planning a vacation, you use words like unwinding, adventure, fun and entertainment, and not accident, illness and medical emergency. So, you usually don't bother to buy a travel insurance plan unless it is mandatory.

Even though you don't make a claim every time you buy travel insurance, it is unwise to go out without one. Medical costs in most foreign countries are high. Even consulting a doctor can burn a big hole in your pocket.

A travel plan provides cashless hospitalisation and, if needed, covers the evacuation cost. It insures you against mishaps such as loss of checked-in baggage or passport, trip cancellation/interruption and personal liabilities. It also pays for legal support in a financial emergency.

By spending a few hundred rupees, you not only insure yourself against financial disaster but ensure that, if needed, you get the best possible service.

Therefore, do not treat this as "just another paperwork" and buy whatever the agent recommends or make a hasty purchase along with the air tickets. This may not give you the best deal.

It is important to understand your needs. Answer the questions below to know the type of cover you must buy and avoid glitches in case you have to file a claim.

WHERE AM I GOING?

Your destination determines the size of the cover, that is, the sum insured required. Since medical cover is the main feature of travel insurance, decide the sum insured on the basis of how expensive medical services are in the country or city you are travelling to.

Premium is high for places where health costs are more. "Medical treatment is significantly costlier in countries like the US and Canada than in South East Asia and this drives the premium difference. In Japan, given the history of natural disasters, premium rates are higher than in other Asian destinations," says Gaurav D Garg, MD and CEO, Tata AIG General Insurance.

WHAT WILL BE THE DURATION?
Longer stays mean higher premium. For instance, a single-trip travel plan (sum insured of $100,000) for a 25-year-old from HDFC ERGO for an eight-day trip costs Rs 760. The cost is Rs 902 if the stay is extended by another seven days.

If you are a frequent flyer, opt for annual multi-trip policies to save money. These plans are valid for a year and usually cover any number of trips abroad, each trip having a maximum duration of 30-45 days.

"Annual multi-trip plans turn out to be cheaper than the single-trip policies for each trip. This is because the insurer doesn't have to bear additional administration expenses," says T A Ramalingam, head, underwriting, Bajaj Allianz General Insurance. It is also convenient as you don't have to buy a new policy and submit documents every time you travel.

Currently, insurers don't have different plans for business and leisure travellers. "The travel insurance market is maturing. Over a period, we will see differentiation," says Garg.

WHAT WILL I DO?
Is it a sleep, eat and sightseeing holiday or do you plan to be more adventurous? If your itinerary includes sporting activities such as trekking in difficult terrains, skiing, water sports, etc, you better fill the gaps in your travel cover. Though a regular travel insurance plan will not cover risks involved in these activities, you can get special coverage on request at an extra cost.

Similarly, if you are above 65, you can opt for plans for senior citizens that have features such as cover for pre-existing illness in special situations, higher sum insured and accidental death and dismemberment cover.

Insurers also offer add-ons like burglary and fire insurance for your home for the days you are travelling. There are also 'missed connection' covers for travellers who visit more than one city or country in a single trip and bail bond insurance if you are arrested abroad.

DID I COMPARE?
Always compare the plans. Don't buy only on the basis of sum insured and premium. "Conduct a comparative analysis of companies and their offerings like online services, claims process, toll free number, payment options, network of hospitals, etc," says Neelesh Garg, executive director, ICICI Lombard.

Also, be prepared for making a claim. Since so many different covers are clubbed in one policy-medical, accident, passport and baggage loss, personal liability, trip cancellation, etc-the claim procedures differ according to the situation.

Read the claim procedures, have the required documents ready, and save the helpline numbers of your insurer and the third-party administrator in your phone (you can also keep a hard copy in case you lose your phone).


*PREMIUM CALCULATION*
Here are the factors which determine the premium you'll have to pay-

SUM INSURED:
The higher the sum assured, the costlier is the policy.

TYPE OF PLAN:
Single-trip, multi-trip, student or senior citizen plan.

COVERAGE:
Special add-ons such as cover for adventure sports, home insurance or separate insurance for important documents and expensive items will increase the cost.

DURATION OF TRAVEL:
The longer the duration, the higher will be the premium

TRAVEL DESTINATION:
Insurance for regions such as the US and Canada, where medical services are expensive, is costlier.

AGE AND HEALTH:
Your age and general health are also parameters for underwriting travel policies. Pre-existing illnesses and illnesses related to alcoholism and drugs are not covered.

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