What is travel insurance?
Travel can involve financial risks. Travel insurance is a financial product that transfers some of that risk to an insurance company. The policy wording describes the coverage and limits that may apply.
The cost of just one medical emergency while abroad could be financially devastating. However, many Canadians travel without travel medical emergency coverage, believing government health programs cover everything – they don’t.
There are different types of travel insurance. Some insurance covers you for medical emergencies, while other types of travel insurance covers your personal property or the cost of a trip cancellation.
Emergency medical travel insurance covers the costs resulting from a medical emergency while you are travelling abroad.
This is the most important type of insurance to have in place because the costs of a medical emergency abroad can be high. Click here to read about some real-world situations where people incurred hundreds-of-thousands of dollars of medical costs to cover a medical emergency abroad.
In general, travel insurance should include health, life and disability coverage that will help you avoid large expenses, such as the cost of hospitalization and medical treatment outside Canada.
Ensure your coverage includes or has provisions for pre-existing medical conditions, medical evacuation and repatriation (preparation and return of remains) in case of death.
Be sure to seek professional advice to compare and contrast different types of coverage.
Trip cancellation and interruption insurance coverage protects the financial investment you made in your trip from unexpected trip cancellations and interruptions. The financial impact of cancellation would not be as great as a medical emergency, however, trip cancellation and interruption is common. So even though the financial risk is not as high, you are more likely to claim this type of insurance.
Baggage loss, damage and delay insurance coverage protects your personal property while travelling. This insurance allows you to replace your lost or delayed property while travelling, and the insurance company will reimburse the costs with limits prescribed in the coverage.
From this list above it is clear to see that emergency medical insurance coverage is the most important type of coverage to have. Insurance companies often bundle the three types of insurance together at a discount. However, you should prioritize emergency medical coverage over the other types because of the potentially devastating impact of a medical emergency abroad.
About Colin Barry – Canfin Financial Group
Colin Barry is a Certified Financial Planner (CFP) who works with families and small businesses to plan their finances and make the most of what they have. Visit www.colinbarry.ca for more information. Fee for service financial planning and investments provided through Canfin Magellan Investments Inc. Insurance provided through Canfin Capital Group Inc.
