I am going out of the country for just a week. Why should I spend money on travel insurance? Typical statements that you would hear from most people. However, if you truly understand and evaluate the value at stake, travel insurance could prove to be a very sensible investment.
Let’s consider a few reasons for you to buy a travel insurance.
1. Trip cancellation insurance: Imagine the ticket you booked for a trip was non-refundable. About twelve hours before take-off, you receive an SMS saying that the flight has been cancelled due to some reason (could be bad weather, problem with the airline company, or anything else). Since you have no option but to travel to the destination, you book a last-minute ticket with another flight. You will also lose the money on the booking which got cancelled as the ticket was non-refundable. A trip cancellation insurance could have got you the refund for the cancelled flight.
2. Coverage for baggage and personal belongings: Over 10 million pieces of luggage are mishandled per year and each mishandled luggage costs an average US$90 to the airline. You could easily be one of the victims of mishandling of luggage. While your personal belongings may not come back to you in such cases, it is wise to have a cover for such instances while you travel. It will at least help you to recover the value of your personal belongings.
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3. Medical Insurance: If you are traveling to an international destination and happen to fall sick, the cost of treatment would be rather huge and could burn a serious hole in your pocket. A medical insurance cover for such emergencies could help you get treated in the eventuality of you falling ill during the trip. Such insurance is also helpful in case of a medical emergency. For instance, if you travel to a snow-clad peak, feel uneasy and collapse, such cover can enable to safely transport you to the nearest medical facility and swiftly get you the required treatment.
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4. Insurance against accidental death or permanent disability: Unless you have adequate life insurance and cover for permanent disability, it is wise to ensure sufficient cover for such instances while you travel. This is especially useful if the destination is very far off and the probability of such an incident taking place is higher than otherwise.
5. Insurance in case of interruption of trips: If you have a connecting flight to catch and you miss it because of delay in the first flight, a travel insurance would have helped you recover the cost of the ticket. It would also minimise the impact of the emergency booking that you would anyways need to do to reach your destination.
However, each of the above is a rare event and the value at stake needs to be accessed i.e. you should know what you might lose in case of occurrence of such an eventuality. After careful evaluation, you should arrive at a conclusion on whether to buy a travel insurance or not.
I recommend that it is always a good option as the amount you spend on travel insurance would be a minor portion (often less than 5%) of the total ticket cost. And if any such event occurs, it safeguards you from unnecessary financial loss.