Travelling is good for us in many ways. It helps us de-stress, experience life in different ways, and opens our minds to different cultures and perspectives. Many people have started understanding the importance of travelling and ensuring that they take time out of their busy schedules to explore the world. However, travelling to new places also exposes you to certain risks. You might have to face a change in weather, food, and water and get exposed to different diseases, accidents, injuries, etc. Also, there are chances of financial losses due to trip cancellation, delayed flights, lost baggage, thefts, etc. A travel insurance policy offers financial coverage for many such medical and non-medical emergencies.
When you buy a travel insurance plan, the insurer offers a list of inclusions and exclusions of the policy and asks you to pay a nominal premium to avail of the benefits of the policy. But, what is the basis of determining the premium rate in travel insurance? What are the factors affecting travel insurance premium cost?
Here are 5 crucial factors that impact your travel insurance policy premium:
- 01: Your travel destination
Some countries have made it mandatory for travelers to have a medical and/or travel insurance policy. Therefore, if you are planning to visit any of these countries, then you need to make sure that you check the minimum sum insured required and buy a policy accordingly. This can have a direct impact on the premium amount.
Further, insurance companies categorize countries based on the risks posed to travelers. These include health risks (countries with a high rate of communicable diseases), risks of accidents (countries with difficult terrain), or risks of theft (countries with higher crime rates). As the risks increase, the premium of your travel insurance policy will increase too. Also, the longer you decide to stay can impact the premium too.
- 02: Age of the traveller(s)
If you are buying travel insurance for a single person, then the sum insured will be less, and the premium will be less too. However, if you are buying insurance for multiple people, then the number and age of travellers can impact the premium amount. The insurer will consider the medical history of each traveller covered under the policy to determine the optimum premium.
- 03: Type of travel insurance plan
Are you travelling within India or internationally? Are you purchasing the policy for a single trip, or is it a multi-trip policy? Are you looking for a student travel insurance policy? Is the purpose of your trip business? Insurance companies have different types of insurance plans for different needs. Each of these plans offers different coverage and hence has different premiums.
- 04: Add-on Covers
Insurers offer a range of add-on covers with a travel insurance policy to help you customize it based on the needs of your trip. These covers boost the coverage of the policy. However, each add-on cover increases the overall premium of the policy. While it is recommended to opt for add-on covers based on your needs, you need to be mindful of the impact they can have on the premium of your travel insurance plan.
- 05: Medical condition of traveller(s)
When you purchase a travel medical insurance policy for multiple people, the insurer assesses the medical history and condition of all travellers to calculate the premium of the plan. Usually, insurers do not cover pre-existing medical conditions. Some insurers offer coverage for pre-existing conditions at a higher premium rate.
As you can see, there are numerous factors impacting the premium of your travel insurance policy. Hence, before you buy one, understand the features and coverage you need from the policy. Once you are clear about the features you need, start looking at different insurers and plans and compare them to find the best plan for your needs.