Top 3 Things Travel Insurance Should Cover (And How Much is Enough)

At the very least, a travel insurance plan must offer overseas medical and emergency cover; personal accident benefits; and compensation for travel inconveniences.

Whether you’re purchasing a COVID-19 travel insurance plan, getting complimentary credit card travel insurance or purchasing airline travel insurance, you have to ensure that you are sufficiently covered for in every aspect. Furthermore, there are certain things you need to take note of when it comes to your travel insurance policy. 

Here’s a quick explanation of the three most important benefits any travel insurance plan should have, and how much coverage to choose.

Overseas medical benefits

Because your personal insurance coverage only covers you within Singapore (and in some cases, West Malaysia and parts of Thailand), travel insurance becomes a necessity. If you should suffer an injury or illness while overseas, you will have to pay for your medical expenses out of your own pocket.

This isn’t necessarily a problem if it’s just a minor illness or a slight injury that is easily fixed with a quick visit to the clinic. However, if you happen to get a serious injury or illness that requires hospitalisation, your holiday could end up burning a huge hole in your bank account.

That’s why one of the most important benefits of any travel insurance plan is overseas medical coverage, which covers the cost of medical treatment and hospitalisation (including emergency care and life-saving surgery). Some plans also cover hospitalisation and treatment costs incurred during follow-up treatment in Singapore.

Overseas medical coverage should also include the costs of an emergency evacuation (transport home to Singapore for treatment) and repatriation (bringing a body back for last rites), which can easily cost several thousands of dollars or more.

In addition to the above, insurers may add in perks such as hospital cash, visitation allowances, guardian benefits (to hire a caretaker for children) etc.

How much is enough for overseas medical benefits?

This will depend, in part, on where you are going. If you’re travelling in a country with a lower cost of living, hospital expenses are likely to be lower as well. This means that you can get by with lower coverage.

Conversely, if you’re travelling to, say, the US, it might be best to opt for the highest level of coverage you can comfortably afford.

Also, bear in mind that your coverage will also determine the type of healthcare facility or hospital you can go to. If you prefer a private hospital or a higher-class ward, it would be prudent to go for higher coverage.

Having said that, popular travel insurance plans in Singapore offer at least S$200,000 to S$250,000 in overseas medical coverage, which should be suitable for most travellers.

However, be sure to check the sub-limits in the plan – elderly persons and children are only entitled to a fraction of the coverage, so adjust accordingly.

Personal accident coverage

Personal accident coverage in a travel insurance plan provides a lump sum payout in the event of death or total and permanent disablement arising from an accident or injury while overseas.

Some insurers offer double or extra payouts under certain scenarios, such as when taking public conveyance – this will significantly boost the amount received.

It is meant to help survivors cope with the aftermath of a catastrophic incident and should not be confused with overseas medical coverage; the latter is designed to deal with an emergency as it occurs.

As such, you should evaluate the personal accident benefits separately from overseas medical benefits when choosing your level of coverage.

How much is enough for personal accident coverage?

This is a more personal choice. The level of personal accident cover you should have should be tagged to your family’s or dependant’s current lifestyle.

This is because insurance is designed to help surviving family members or dependents maintain their current standards of living instead of falling into financial hardship due to the loss of a breadwinner.

If you already have a life insurance and/or personal accident plan, you can refer to it to set your personal accident benefits in your travel insurance plan.

If not, do a quick calculation by multiplying your current household expenses by the number of years it takes for your dependents to reach financial stability on their own.

Travel inconveniences (delays and curtailments, cancellations, loss of luggage)

Travel inconveniences is an umbrella term that refers to the various payouts and reimbursements you can claim should you encounter certain incidents while travelling. They can roughly be split into three categories:

• Travel delay
• Trip cancellation or curtailment
• Loss or delay of luggage

Travel delay benefits

Whether due to flight delays or diversions, over-bookings or missed connections, you find yourself stranded (at the airport or elsewhere), and now have to pay for extra accommodation and meals.

Your travel delay benefits can help defray some of these additional costs, and offer some reimbursement for things like prepaid tickets that have now gone to waste.

Having sufficient travel delay benefits can mean being able to spend the night in a comfortable hotel instead of slumming it at the airport.

Trip cancellation or curtailment coverage

Should your trip be cancelled or cut short, you may be able to claim compensation from your insurer. Things can and do go wrong during travel, so having trip cancellation coverage gives you an added layer of assurance.

Note that some insurers require you to first claim compensation or a refund from relevant parties, such as your airline, before making a claim against your policy.

Also, note that some insurers allow claims under a wider range of reasons and scenarios than others, so be sure to check carefully to see what’s covered.

Luggage loss or delay

If your luggage or personal belongings become lost or damaged during your trip, you can make a claim against your policy for compensation.

Note that luggage loss benefits are calibrated to allow you to replace your belongings at a reasonable cost, so don’t expect to be able to upgrade your mobile phone or wardrobe with your insurance claim.

Also, you may need to produce receipts for the replacement items you bought, so be sure to keep them.

How much is enough for travel inconvenience benefits?

Travel inconvenience benefits are mainly designed to allow you to carry on your trip with minimal disruption, so you won’t find very high levels of coverage here.

Be aware that there are sub-limits for particular items, such as laptops and mobile phones. Family travel insurance plans may also be subject to an overall policy limit, which means the amount of overage you are getting may be lower than as individual policyholders.

All these mean that you shouldn’t travel with your most expensive stuff, or bring along high-value items.

If you really must bring along that professional-level camera (maybe because you’re travelling to film an award-winning vlog), consider looking into specialised insurance for valuable items with worldwide coverage.