Travelers often ask us what type of travel insurance they need for their particular trip. Essentially, there are three types of travel insurance plans: package plans, travel medical plans, and specialty plans that limit the coverage to specific options such as evacuation/repatriation, car rental, or flight accidents for example.
Most travelers think of travel insurance as the first type – a package plan, which is a comprehensive travel insurance policy that combines a lot of coverage options into a single plan that’s intended to cover all the mishaps and disasters that could occur on a trip. Package plans are the most common type of travel insurance sold, but it’s also the most expensive type of travel insurance – costing between 6 and 8% of a traveler’s total trip cost.
Some travelers don’t need the level of coverage in a package plan – they need a travel medical plan instead – and they can avoid the extra expense that comes with a package plan. The following explains how to determine what type of travel insurance plan you need.
1. You need a travel medical plan when …
… your travel is domestic, relatively cheap, or outside your health insurance network.
Travel medical insurance plans cover your emergency medical care when you’re traveling outside your health insurance network. Many U.S. based health insurance plans do not cover their members when they leave the U.S. and they apply out-of-network charges for travel outside the health insurance network area, which means the traveler pays a higher portion of the bill.
Essentially, you need a travel medical plan when you’re not worried about recovering your non-refundable trip costs, your trip is relatively inexpensive, and you know you will be outside your health insurance network area (and therefore won’t have coverage for medical care).
The following travelers need a travel medical plan:
Business travelers who don’t have to pay for their trip costs but know their health insurance doesn’t extend to their destination.
International student travelers who are not worried about trip cancellation and need coverage for injuries or illnesses while they’re abroad.
Families, couples, and individuals traveling outside their health insurance network who want the secondary coverage so they won’t have to pay a huge medical emergency bill.
- Backpacking travelers who aren’t worried about trip cancellation but need coverage for emergency medical care, trip interruption (in case they have to return home quickly), and want some coverage for their stuff.
Missionary or volunteer travelers who are not concerned about getting their trip costs refunded, but know they need coverage for medical emergencies and evacuations.
Senior citizens on Medicare traveling outside the U.S. (Medicare coverage does not cover treatment abroad although some supplement plans include a little medical coverage.)
Workers leaving the U.S. for employment who need medical coverage until they can qualify as a legal resident and be a part of a national health care system.
Visitors from other countries who need medical coverage while in the U.S.
Some travel medical plans include benefits that are similar to package plans like minimal trip interruption, coverage for lost or delayed luggage, and even some trip delays. Read our full review of travel medical insurance plans for additional information.
2. You need a package plan when …
… your travel is expensive, once-in-a-lifetime, or you’re on a budget.
Travel insurance package plans cover a wide range of travel risks, including trip cancellation, travel interruption, emergency medical care, baggage loss, and evacuations as well as features like travel delays, car rental, and more. Cancellations can occur for a number of reasons, and when you want coverage for trip cancellation, you’ll need to buy a package plan.
The following travelers need a travel insurance package plan:
Travelers taking an expensive trip, like a cruise or safari, and want to be able to recover their non-refundable trip costs if they have to cancel the trip.
Travelers who are taking a once-in-a-lifetime trip, such as for a sporting event, an anniversary, a honeymoon, etc. If the trip must be cancelled for some reason, you’ll want to recover your losses.
Traveling families and seniors on a budget who can’t afford to lose all their non-refundable trip costs in the event of an unexpected emergency like an illness, a car crash, or a job loss.
Travelers taking an adventure trip. Most travel insurance plans exclude adventurous activities, but travelers can purchase adventure package plans or upgrades to a standard package plan to cover their medical emergencies on an adventure trip.
Travel insurance package plans include coverage for travel medical emergencies. Read our full review of package plans for additional information.
3. You need a specialty plan when …
… you have a insurance gap you need to cover.
Travel insurance specialty plans are ideal for covering gaps in your insurance. Here are a few examples:
If your travel medical care is covered when you’re abroad through your health insurance and you don’t need to recover your pre-paid trip costs, then you may only need evacuation and repatriation coverage. This is often called a ‘med-evac’ plan.
If you’re traveling within the U.S. and don’t own a car but will be renting one for a trip, you can buy a car rental damage plan that’s much less expensive than what you’ll get at the rental counter.
- If you paid a lot for an airline ticket and are traveling where you won’t need travel medical coverage and want to be able to recover your pre-paid ticket costs, you can buy airline ticket protection.