Travel insurance is basically a limited time health insurance specifically for when you are travelling.
Most people do not need this kind of insurance, although your travel agent will always try to sell it to you. Why? Because they make a good commission on the sale of this product.
If your health insurance already covers you for travelling abroad do not buy travel insurance. It's pretty much that simple. Having said that, there are times when you can make use of this product. If your current health insurance does not cover you when you travel abroad, you should be considering coverage.
Keep in mind that travel health insurance is a very expensive type of health insurance, and dollar for dollar, you can do better. You might even want to call your current health insurance company to see if they can provide you travel insurance at a better price than what is offered through your travel agent.
Why is travel health insurance a bad deal? In most cases, if you are covered by other health insurance any claim to your travel health insurance will be sent back and you will be referred to your primary health insurance FIRST. This is what happened to me - I bought travel insurance and then found out that they only pay what is not covered by my existing health insurance! The travel insurance didn't pay for my care abroad upfront - they only looked at a claim after the fact. Then I had the fun of trying to get my travel insurance company to recognize that there was a currency difference and get the right amount from them. Further, by the time I finally got my travel insurance claim (partially) paid by my own health insurance company, I was too frustrated to try to get the difference from the travel insurance. The difference was too small to warrant my time.
In my case, the travel insurance company won. They got their premium and they didn't have to pay.
So, when DO you buy travel insurance? In most cases, travel insurance is only warranted if:
- The travel insurance company will pay any costs, upfront and not require you to pay first - but this will cost you BIG time.
- You do not have a health insurance policy, which will cover you outside the country. Check your policy ahead of time, so you don't succumb to marketing by the travel agent.
- You do have travel insurance coverage for outside the country, but your insurance will not ensure that it will fully cover your costs. This point comes into play only if you cannot afford to pay the difference. In most cases, it's not worth the additional cost of an additional travel insurance coverage for the difference.