Top 5 elements to consider before declining private travel insurance
“I don’t need private travel insurance. I’m covered by my credit card.”
Wise travellers know of the importance of travel insurance. And many of them rely on protections embedded with their credit card, thinking they will be covered, no matter what. But are the protections really optimal? Is the insurance automatically in force just because you paid your most recent bill? Are there any stability clauses to know about?
Did you know that:
- After a certain age, coverage can be limited to a few days only?
- Some protections may be limited or nonexistent if the trip was not paid for with that credit card?
- Your protection could be invalidated if you purchase a top-up from another insurer?
There are many things to consider! And so many cards to compare! We have analyzed eighteen popular cards known for their travel insurance plans or travel reward programs, and came up with the Top 5 elements to consider before declining private travel insurance.
#1: Value of the medical protection
From all of the cards we analyzed almost half provided coverage of only $2 Million or less.
Just like everything else, medical costs increase year after year. Thankfully, million-dollar claims don’t happen often. But they happen. Just think about this lady who gave birth to a premature baby while in Hawaii and whose claim was around $1,000,000. Or the man who needed a special respiratory device and was hospitalized for weeks before he was stable enough to be repatriated to Canada, with claim costs close to $5,000,000. Coverage of at least $5,000,000 is highly recommended or you could be left with hefty bills to pay upon your return!
Advice from our experts: Most private travel insurance policies, including Tour+Med, provide coverage up to $5,000,000.
#2: Number of days included
Although some of the credit cards we analyzed promoted coverage for trips up to 60 days, such lengths are usually limited to clients less than 55 years old. As a person gets older, the number of days included with their credit card diminishes… quickly.
In most cases:
• Clients between 60 and 64 years old will get from 15 to 31 days (some of the cards offering only 8 or 10 days), and
• Clients 65 and older will get from 3 to 15 days (most cards offering 7-8 days).
Some cards were no longer offering any coverage after 65 years old!
Advice from our experts: Tour+Med provides Per Trip plans up to 183 or 212 consecutive days, depending on your province of residence, for clients up to 95 years old! We also provide Multi-Trip Annual plans of 8 and 15 days for clients of less than 85 years old, and a Multi-Trip Annual plan of 30 days for clients of less than 80 years old.
#3: Are top-ups with other insurers permitted?
You could be surprised to learn that coverage can be completely invalidated if the top-up is purchased from another insurer. This is surely something you need to know in advance!
From the cards we analyzed:
• Some required the top-up to be purchased from the same insurer or their coverage was invalidated;
• Most sold top-ups with the same insurer but did not mention what would happen if it was purchased elsewhere;
• A few sold top-ups with the same insurer but also allowed top-ups elsewhere;
• Many did not provide top-ups at all. Some even mentioned that coverage was literally cancelled if the trip lasted longer than the number of days included with the card!
Advice from our experts: Do not take anything for granted. When in doubt, ask! It is your responsibility to verify if the financial institution or credit card company provides top-ups or if it allows you to get it from another insurer. If so, you should also confirm if there will be continuation of benefits once coverage from the credit card has ended, so that you don’t end up having to pay for a follow-up visit, for example. Many private travel insurers will provide top-ups, but won’t cover events that occurred while you were covered by another insurer (ie: your credit card). It is your responsibility to know the extent of your coverage.
#4: Stability of pre-existing conditions
Tour+Med requires 3 months of stability for clients of 59 years old and less, and 6 months for clients of 60 years old and more. If a person wishes to cover an unstable condition, they can ask about our Reduced Stability Period option, which will reduce the required stability period from 3 or 6 months down to 30 days before the departure, while covering the concerned condition(s) up to $5,000,000.
While 3 to 6 months of stability is also the norm for the majority of the credit cards we analyzed, some cards required as much as 1 year of stability for clients over 74 years old.
Advice from our experts: Whether we are talking about private travel insurance or protections from credit cards, pre-existing medical conditions must satisfy stability criteria to be covered. So although this is common, you should pay attention to specific requirements pertaining to age, as this varies from one card to another.
#5: Must you pay the entire trip with this specific card for coverage to be in effect?
The last thing you must pay attention to is knowing if it is mandatory to have purchased the trip with this card specifically for coverage to be in effect. While medical coverage is not affected by this rule, it can have a huge impact on non-medical protections.
One of the cards we analyzed only offered medical coverage so we will consider the remaining cards for the following categories.
Trip cancellation and/or interruption:
Although a few cards mentioned that customers were covered for trip cancellation or trip interruption if “part” of the trip had been paid with that card, the majority of the cards did not provide any coverage if the trip had not been paid in full with that card, or did not provide coverage for elements that had been purchased with another mode of payment.
To better understand this, let’s image a couple visiting Europe: they used their credit card to purchase their plane tickets, but once there, paid for a Mediterranean cruise in cash. In case of trip interruption before boarding the cruise, only their plane tickets would be covered since their cruise was paid using another mode of payment. This isn’t practical and the losses could be substantial!
Not only should you check if your luggage and personal effects are covered depending on how you paid for your trip, but you must also verify what is covered: loss, theft, delay, damage? Some cards cover only a few of these misfortunes. Tough luck if you experience another one!
Accidental death and dismemberment:
A small number of cards didn’t provide any coverage in case of accidental death or dismemberment, and a few required that at least 75% of the ticket price be paid with that specific credit card for coverage to be in force. The remaining cards required full payment of the ticket for coverage to be in force.
Let’s have another look at our couple visiting Europe: While in Paris, they decide to purchase a bus tour of the city and pay cash. In case of accidental death or dismemberment resulting from a bus accident, private non-medical insurance would cover them since they are aboard a ‘common carrier’. However, coverage from their credit card would be of no help since they used another mode of payment to pay for their tour.
Advice from our experts: We know a travel insurance policy is not your most captivating reading book, but taking a few minutes to read it carefully will allow you to know what is covered, what are the exclusions, which risks are covered, etc. Have all aspects of your trip in mind and don’t hesitate to contact the insurer before your departure to make sure you will be appropriately protected. Ask your broker for advice or get them to look for private non-medical travel insurance if you fear that this is lacking. Trip cancellation and/or trip interruption coverage is not to be neglected!
As you can see, travel insurance protections offered by credit cards can be interesting for some people, but are not suitable for all travelers, or for all trips. To have peace of mind while traveling, analyze your needs and don’t be afraid to ask questions to the various insurers. Will the value of the medical protection be sufficient? Is coverage provided for the full duration of the trip? Can you get a top-up from another insurer? Are the stability requirements realistic? Is non-medical coverage available? All of these questions, and many more, should be addressed (and answered to your satisfaction!) before you officially decline private travel insurance.