It has been a few years since the world reached a standstill where all travel was restricted. But in just 2-3 years since that, Indians have seen a massive boom in international travel, with more than 20 million travellers going abroad in 2022.
Although this number is still below the pre-COVID levels of 2017-19 of 25 million travellers, with Thailand and Sri Lanka offering visa-free entry to Indians, this number is expected to rise significantly. And while this is a fantastic time to be a globe trotter, there are certain risks you might need to consider.
When travelling, while relatively rare, there are certain risks to which you might be exposed. These risks can have varying severity and frequency, resulting in a negative travel experience.
In this article, let us explore one tool that can be utilised to mitigate these risks and decide whether it is worth it.
What is travel insurance?
Travel insurance is a risk management tool that can mitigate the impact of specific risks associated with travelling. As mentioned, these risks can range in severity and how often a traveller might be exposed to them. For example, missing a connecting flight or getting into a personal accident.
The insurance acts as a safety net and offers financial protection from covered risks. Covered risks are certain circumstances that an insurer protects for. This coverage is checked and opted for when purchasing the insurance policy and includes the scope and the extent of coverage.
For example, if a traveller has a policy insuring a sum up to $100,000 and they break their limbs while on the trip, how much of the sum insured will be offered as compensation included in the policy.
Is travel insurance worth it?
To answer the question of “Is buying travel insurance worth it?” Let us state the facts and explore the circumstances for and against the claim.
First, “most people who buy travel insurance will never have to claim it”. This is true; while there is no current information on the number of claims in proportion to policyholders, historical data suggests that only one in six individuals started a claims process. But despite that, studies show that up to 92% of travellers intend to purchase insurance during their next travel.
This is because while certain risks might be uncommon, the financial impact of those risks can be significant, such as having your trip cancelled at the last minute due to an accident or a medical emergency. This can result in financial loss due to the cost of getting the visa, the cost of the flights, accommodation expenses, and any other non-refundable deposits.
Other than this, while something might not be as severe, it is familiar enough to become a problem and lead to property loss. Consider a somewhat common occurrence, such as losing checked-in baggage. According to some reports, US-based airline carriers mishandled more than 1.9 million luggage in 2021. While there is no updated number for the entire world, this number can be expected to be several times higher when considering all airlines.
So, in the end, the worthiness of travel insurance depends on your travel experience. If you face specific risks, opting for insurance is worth it, while if your experience is pleasant and risk-free, the insurance might not be worth it.
This is why it is a paradox and truly depends on your situation.
What are certain things to keep in mind when purchasing insurance?
Now that it is clear whether travel insurance is worth it, let us explore some factors that can enhance its protection while helping the traveller choose the best policy for their needs.
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Coverages offered
The first thing to consider in a policy is the coverage offered. While not every coverage might be as necessary, based on the travellers' needs, there can be different importance assigned to certain coverages. Other than this, it is also essential to assess the scope and extent of the coverage.
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Sum insured
Insurers can offer a wide range of sums insured, but while these numbers might sound good when looking to claim a settlement, they can add to the premium price. This is why it is beneficial to assess this and choose accordingly.
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Premium price
The cost of travel insurance in India is considerably lower than in any other country. Still, despite that, it can be beneficial to check the premium price and see whether it fits into your budget.
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Travel destination
While insurers offer coverage for dozens of locations, specific destinations need to be covered. It is essential to check whether an insurer covers the travel destination before finalising it.
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Reliability of the insurer
Another aspect of the purchase process is finding an insurance provider for the policy. For this, it is essential to assess the insurer's reliability by checking the claim settlement ratio and testimonials.
Niva Bupa, one of India's leading travel insurance providers, excels at these criteria when choosing a policy. And is the provider I trust when purchasing a policy for my family.
Conclusion
Whether travel insurance is worth it is a paradox that depends on several other circumstances. But one thing is clear: facing rising challenges and hidden risks associated with travelling can be daunting, but having insurance offers the confidence and peace of mind when travelling to face these risks and emerge unaffected. So look out for a comprehensive insurance policy and travel confidently to mitigate the impact of these risks if faced.
