The minute you touch down on vacation, you want to be sure you’ve left all of your worries behind. That’s why a travel insurance policy is so important-letting you rest easy in the knowledge that if any unexpected issues do arise, your policy will have your back. But, with so much industry jargon involved in the policy process, how well do you understand what you’re paying for? You know you’re paying for a policy, but what exactly is the travel insurance premium?
What is a travel insurance premium?
In basic terms, a travel insurance premium is the name given to the amount of money that you must pay for an insurance policy. This varies from person to person based on the type of policy they take out, as well as a number of personal factors applicable to that individual.
The type of policy that you decide to go with, including any additional extras, determine how much you pay as your premium. You should make sure that you aren’t agreeing to anything that you don’t need, as this could see you paying more than necessary.
What determines the cost of my premium?
There are a number of different factors that go into deciding how much you will be charged for your travel insurance premium. The first thing is the type of policy that you go with; policy packages that are tailored to extreme sports vacations, for example, will set you back a little more than a standard policy. Similarly, if you need to have your insurance policy medically underwritten, it will probably cost you.
Your premium will take into account the total cost and length of your trip-the longer you travel for, the more of a risk you pose to an insurer. And the more money your vacation sets you back, the more they will have to pull out for coverage in the event of a cancellation, delay or interruption.
Another key factor is your age-simply because older travellers, in theory, are more likely to fall ill or become injured while travelling. When you are applying for your travel insurance policy, most insurers will ask that you fill out a quick survey about your general health. If it is discovered that you have a pre-existing medical condition, the likelihood is that they will press you for more information about this, and it may end up affecting your price. It is important that you are honest with your insurer about your health from the get-go. If you do end up falling ill on your trip, and your medical condition is revealed (even if it has nothing to do with the sickness at hand) it could void your policy and ultimately see your claim being denied.
However, the good news is, unlike auto and home insurance, your travel insurance premium will not be affected by any claims you’ve made in the past.
What is the difference between a premium and a deductible?
So you got your policy, and paid your premium-is that the same as a deductible? Alas, it is not and there is actually more money to pay out if you do make a claim. A deductible is the amount of money that you take responsibility for before the insurance company pays out on a claim.
So, if your travel insurance deductible is $200, and you find yourself needing emergency medical treatment which ends up costing you $10,000, it’s your responsibility for paying the $200. Luckily, many insurers will allow you to pay a deductible waiver, which means that while you do pay a little extra money up front, your insurance company will pay out immediately.
While there are a lot of things that come into play when deciding on your premium, it varies from insurance company to insurance company. If you don’t like the premium amount you are initially offered from one insurer, you can always search around and find one that is more suitable for you.