Travel insurance helps cover all the bases
By Marnie Hunter
(CNN) -- You've researched, reserved and deposited. Losing it all to an unforeseen event or illness would be disappointing -- not to mention expensive.
A travel insurance policy can be a saving grace when something unexpected crops up.
"We try to advise everyone to take travel insurance," said Cheryl Hudak, vice president of the American Society of Travel Agents and owner of Travel Dimensions in Boardman, Ohio.
"Because it's based on the unexpected, it's like carrying house insurance," she said. "You don't ever think anything is going to happen, but if it does, you want to be prepared."
Travel insurance can cover a range of situations, from trip cancellation or delay to medical evacuation. You can buy supplemental medical insurance, baggage insurance and policies that cover money lost if a travel vendor defaults.
With all the choices, how do you decide what kind of protection you might need?
Determining whether or not you want to cover the cost of your trip is the first step, experts say.
"If it's a short trip to go see your grandma in Minneapolis, that's something where you can kind of weigh the pros and cons as to if it's worth it," said Kari Swartz, Expedia.com's leisure travel specialist.
"But if you're planning on going on a cruise or some type of a big-ticket trip, I think it's a good investment to make," she said.
If a trip is canceled or interrupted -- for reasons including weather, illness or a death in the family -- trip cancellation insurance policies generally cover nonrefundable payments and deposits.
Hudak sells polices that include trip cancellation and medical insurance that run about $75 to $100 on a trip worth about $1,000. The price of the trip and the age of the travelers are factored into the premium.
Alex Velinov, president of online travel insurance agency Total Travel Insurance, finds that the destination often determines what customers buy. The company's Web site allows customers to compare products and prices from at least a dozen different plan administrators.
"I think when people travel domestically, they buy trip cancellation plans. When they travel abroad very often they just buy medical," he said.
Reading the fine print
Although your health insurance should follow you on trips within the United States, many U.S. health insurance carriers do not cover medical expenses overseas. Some may cover emergency care, but often will require patients to pay foreign providers out-of-pocket and reconcile claims with you later. Medical expenses that arise overseas from pre-existing conditions often are not covered.
"A lot of people don't realize that when you go abroad, the health insurance that you have in the United States doesn't act the same way internationally that it would here at home," said Linda McGee, President of MEDEX Insurance Services in Towson, Maryland.
McGee encourages travelers to find out what their health insurance plan covers before going abroad.
Find out if the carrier will pay directly to a foreign provider, if the company will pay to evacuate you to a higher standard of care or back home and if the company will be able to provide assistance in locating doctors abroad and coordinating care.
If you're concerned about the level of overseas coverage your primary health insurance provider offers, supplemental medical coverage is a good way to cover all the bases.
Medical policies vary among travel insurance providers, so it is important to read the fine print. Some companies do not cover pre-existing conditions and age is a factor in the amount of coverage some policies provide.
For about $4 per day, with a 7-day minimum, MEDEX offers $100,000 of medical coverage that includes care coordination, doctors' fees and hospital expenses as well as the cost of emergency evacuation to a hospital or home. Older travelers pay slightly higher premiums for the $100,000 worth of coverage: $5.75 per day for travelers ages 71 to 80 and $8 per day for travelers 81-85.
Dr. Phyllis Kozarsky, a professor of medicine and infectious diseases at Emory University School of Medicine, advises travelers, particularly those traveling to more remote areas and those with chronic illnesses or who are pregnant, to consider their medical needs overseas.
"It's incredibly expensive if you're overseas somewhere and you become ill or have an accident and you want to be medically evacuated," Kozarsky said. "That can cost in the range of $100,000 if you or your family were to pay for that."
Whatever travel insurance decisions you make, it's best to make them early. Many providers require that insurance be purchased within seven to 10 days of the initial trip deposit, according to Hudak. Some tour companies will sell insurance up to 60 days prior to departure, she said.
Buying from a tour company or a cruise line may be cheaper than buying through third-party insurance companies, Hudak said, but the benefits vary widely. Some travel vendors offer vouchers rather than cash back if you buy their policies, so it's important to determine your priorities when comparing policies.
Third-party travel insurance providers often sell much closer to the date of departure, but it's too late if the unforeseen event has already happened.
"The best bet is just to take it out from the beginning and know that you're covered and have peace of mind the whole time," Hudak said.
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