Long list of exemptions

The proverb,‘The knowledgeable man knows the rules but the wise man knows the exceptions,’ is apt for travel insurance. Parallel to this adage, before embarking on a trip, acquaint yourself with what is not covered [and this is a rather long list] by your travel insurance policy.

Pre-existing diseases [defined as any disease that you have at the time of purchasing the policy, including some that your mediclaim policy may be covering] are unlikely to be covered by your travel insurance policy. This policy will generally not cover you for the medical condition that you wish to get treated abroad. It is also unlikely to cover you for orthopaedic and degenerative diseases, cancer, HIV/AIDS and so on. It may, however, make an exception for emergency procedures that are aimed at saving the insured’s life or those meant to relieve acute pain. Suicides or attempted suicides are not covered, nor are expenses arising from mental and psychiatric problems. Injuries caused by terrorism, and death or disability caused by war are also likely to be beyond the ambit of these policies. Furthermore, don’t expect your insurer to reimburse you if you incur an injury while undertaking any illegal activity.

As for the possessions in your baggage that are excluded from coverage, the list includes valuables such as ancient manuscripts, vintage stamps and coins, ornaments, precious stones, money and securities.

What determines the premium

The premium that you are charged on a travel insurance policy depends on factors such as the sum assured, traveller’s age, duration of visit, destination, and list of contingencies covered. Travel insurance costs less if you are travelling to Asian countries or Europe and more if you are travelling to the U.S. or Canada [chiefly because healthcare costs are higher in North America].

Rates tend to be more attractive for frequent travellers than for leisure travellers. Several companies now offer an innovative feature wherein they charge business travellers on a per day basis. For example, a business traveller buys travel insurance for 60 days but returns to India within 45 days. If the insurance company is charging him on a per day basis, then a part of his premium is reimbursed. Also, premium rates tend to be higher for older travellers and for those with ailments.

Choosing the right plan

First a disclaimer, do not buy the first plan that is offered to you. Read the fine print of a few plans in order to thoroughly acquaint yourself with every cover. Preferably draw a table comparing their features. Then choose the plan that best meets your needs.

At the time of purchase make sure that the entire duration of your trip plus the right destination must be covered. The headache of purchasing a travel insurance policy has zeroed out because you can make the purchase on the Internet and even via a phone call. Most insurance experts suggest that you should avoid buying a travel insurance policy from the travel company from which you have bought your ticket. The standard policy offered by them may not be best suited for your needs. Instead, as suggested above, get the policy documents from a few insurance companies, see what benefits each one offers, compare premium rates, and then make the purchase decision.

Claim procedure for travel insurance

Do acquaint yourself with the claim settlement procedure before your journey begins. Keep the customer service number of the third-party assistance provider in a hand baggage where it is easily accessible. Contact this company in case of trouble. This service provider will provide you the address of the nearest hospital that provides cashless treatment. In case you have lost your passport, it will help you contact the Indian Embassy in that country.

Documents required for getting compensated vary, depending on the nature of your contingency. In case of a medical emergency, you must get the claim form signed by the doctor who treated you. You must meticulously save all the other documents generated during your stay in the hospital like the medical reports from the hospital, admission and discharge slip, x-rays, pathological reports, and so on. Any or all of these documents could be demanded by the insurance company for validating your claim. If your flight gets delayed, get written proof from the airline regarding the exact duration of the delay. Most policies will not compensate you unless the delay was for more than six hours [varies from one policy to another]. You may also have to submit a copy of your passport, visa with entry and exit stamps, boarding pass, ticket, and so on. Hence do not discard even the smallest proof of your travel abroad.

Finally, there is a deadline before which these documents must be submitted to the insurance company [usually within 30 days of the end of the trip or before your policy expires]. The exact provision will be mentioned in your policy document.

In ancient times, Indians feared venturing beyond the seven seas and performed several pujas to propitiate the gods before a journey. But in the modern times, you should simply ensure that you are adequately protected via insurance before you step beyond your native shores.

This was first published in the February 2013 issue of Complete Wellbeing.

Amar Pandit
Amar Pandit is the founder and CEO of My Financial Advisor and best-selling author of The only Financial Planning Book that you will Ever Need. He is very passionate about spreading financial literacy in India and does so regularly through his sharp and analytical columns in various newspapers and websites.