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Top 6 factors affecting the cost of your Travel Insurance Plan

All of us get excited about the idea of spending holidays abroad. We make all the list of places to visit, do all the budgeting of expenses, make the reservations etc. But between all this planning, most of us forget to buy the travel insurance. Travel insurance should be the foremost thing that you should do when you plan to take a trip abroad for any reason whether it be a business trip or an education trip or only a short trip. You never know of the causalities that can happen, so it’s better to be safe with a travel insurance plan that can become a lifesaver to you if anything happens on the foreign soil.

There are several insurers that provide travel insurance plans at varying cost. It is you who has to decide which plan is the best and at what cost. Travel insurance premiums vary because it is based on different factors. It would be important to have a fair idea of the factors that determine the amount of premium you will have to pay for your policy. Some of the factors that determine the cost of travel insurance plans are:

  • Sum Insured

Sum insured is an important factor that will determine the premium. Sum insured depends on the place that you are going to. Places which have high medical cost will have a greater sum insured compared to the places that have cheaper medical costs. Higher the sum insured higher will be the premium cost and vice versa.

  • Duration of trip

The period of stay will affect your premium cost. Longer stays will have higher premiums as compared to shorter stays. And if you wish to extend tour trip then the insurer will charge an additional amount of premium for it.

  • Location of travel

The location of your trip will largely affect the premium costs. The premium rates on travel insurance are the highest in Japan, among all the Asian destinations, because it is prone to natural disasters, such as earthquakes and tsunamis.  Similarly, premiums would be higher when you seek insurance for traveling to countries like Canada and America, since medical expenses are high here, especially in comparison to South East Asian countries.

  • Type of plan

Insurers offer various types of plans like single trip plans, multi-trip plans, student plans, senior citizen plans and so on. So different plans have different premium costs varying the nature of the plans.

  • Coverage

The covers included in your policy determines the premium costs. If you chose to take additional coverage like burglary insurance, home contents protection cover, for risks associated with adventure sports, insurance for expensive items and important documents, then extra premium has to be paid. So be wise when you choose additional covers because they carry high costs.

  • Health and age

Health and age play an important role. If there are any pre-existing medical condition then the insurer might not cover it. There is also an age limit in some plans, for example, an individual who is between sixteen and thirty-five years of age only can apply for student travel plan.

Pragati Rajoria

Pragati Rajoria

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About Me

I’m a Commerce Graduate & CFP Professional, engaged in blogging since 3 years. I’m not affiliated with any financial product. The purpose of writing blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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