Travel Insurance

18 November, 2016

I had no idea when I started in this business that there were different types of travel insurance—One time trip, Multiple trip, Emergency Medical, Trip Cancellation & Trip Interruption,

Filed Under: Financial Planning
Travel Insurance

I had no idea when I started in this business that there were different types of travel insurance—One time trip, Multiple trip, Emergency Medical, Trip Cancellation & Trip Interruption, Baggage Loss, Damage and Delay, and Flight and Travel Accident just to name a few. I take one or two trips a year and go over to the USA two or three times a year so I chose a yearlong multiple trip policy. 

There are a number of insurance providers that will sell you travel insurance as well but be aware that some policies go to age 65 maximum and others go to age 85 (or longer), so it is important to decide how long you will be traveling and what policy makes the most sense for you. My 84 year old father-in-law just paid $600 for a single trip 7 day policy to Newfoundland. You can get couple or family travel as well and the cost can be as low as $250 a year for a multiple trip plan. I have included more specific information in the paragraphs that follow.

If you plan to go abroad, even on a day trip to the United States, you should purchase the best travel insurance you can afford before you leave Canada. Your travel insurance should include health, life, and disability coverage that will help you avoid large expenses, such as the cost of hospitalization or medical treatment outside Canada. If you are flying, being insured for flight cancellation, trip interruption, lost luggage and document replacement will save you from major disruptions and additional costs. If you are travelling by car, make sure you have driver and vehicle coverage in case you have an accident abroad.

You can purchase travel insurance through your travel agent, insurance broker or your employer’s insurance provider. Your credit card company may also offer travel and health insurance. Regardless of how you obtain travel insurance, it is very important that you understand the eligibility requirements, terms and conditions, limitations, restrictions and exclusions of the policy.

Your Canadian insurance is almost certainly not valid outside Canada. Your provincial health plan may cover nothing or only a very small portion of the costs if you get sick or are injured while abroad. For more information, contact your provincial health authority. Hospitals and clinics in some countries have been known to refuse to treat patients who become ill or who have had an accident and who do not have adequate travel health insurance or the money to pay their bills. You could face years of debt paying off the costs of treatment for an illness or accident you suffered abroad. The Government of Canada will not pay your medical bills.

Carefully research your needs and verify the terms, conditions, limitations, exclusions and requirements of your insurance policy before you leave Canada.

When assessing a travel health insurance plan, you should ask a lot of questions.

Does the plan provide continuous coverage for the duration of your stay abroad and after you return?

  • Does it offer coverage that is renewable from abroad and for the maximum period of stay?
  • Does the company have an in-house, worldwide, 24-hour/7-day emergency contact number in English and/or translation services for health care providers in your destination country?
  • Does it pay for foreign hospitalization for illness or injury and related medical costs and provide up-front payment of bills or cash advances, so you don’t have to pay out of your own pocket?
  • Does the plan cover pre-existing medical conditions?  What are the definition, limitations and restrictions of any pre-existing conditions and tests and treatments you may have undergone?

 Make sure you get a written agreement that your pre-existing medical condition is covered or you could find your claim “null and void” under a pre-existing condition clause.  Also, be aware that the agreement must include a stability clause stating that for you to be covered for any pre-existing medical conditions you must have no changes to or new medical conditions, symptoms or medications during the stability period prior to your trip. The agreement should include a compassion clause stating that an inaccurate statement may not invalidate the entire policy, and a change of health clause.

Ensure that the plan provides for medical evacuation to Canada or the nearest location with appropriate medical care and pays for a medical escort (health care provider) to accompany you to and from your destination. Also ensure that deductible costs are clearly explained in the plan. Plans with 100-percent coverage are more expensive but may save money in the long run. The plan could cover health care provider visits and prescription medicines, or emergency dental care or emergency transportation, such as ambulance services. Check whether it excludes or significantly limits coverage for certain regions or countries you may visit.

Finally, ensure that the plan covers the preparation and return of your remains to Canada if you die abroad.