YOU ASK:

In travel insurance why is there a large difference in premiums when the policies are similar?

WE ANSWER:

The travel insurance coverage seems similar and you may be wondering why one travel insurance plan requires higher premiums than the other.

Well, there are some key differences that may not be immediately apparent at first glance, since they both offer the same things. However, upon a closer look, you may notice great differences in terms of the travel insurance's exclusions, terms and conditions.

Here are some things you can look into to know whether you are getting excellent value for money when choosing a travel insurance plan.

  • One, you should check whether medical expenses are paid directly to the hospital. In most cases, you will have to shell out some money for your hospitalization and doctors' fees and have it reimbursed when you come back from your trip. When this happens, the hospital may require you to show your credit card or any proof that you can pay your hospital bill before they will admit you.

    Of course, a travel insurance company that can provide direct payments to the hospital and doctors is preferable, since you don't need to spend out of pocket. In this case, the premiums of a travel insurance plan that offers direct hospital payments may be higher than one who does not.

  • Two, although both travel insurance plans provides medical cover, one plan may have a higher limit than the other. It may also offer more benefits for its medical cover. A more expensive plan may provide emergency expatriation, as well as intensive care treatment. It may also have higher limits per benefit - so that you have a higher limit for daily hospital room and board, daily prescription medication and surgeon's and anesthesiologist's fee.
  • Three, some plans may have exclusions and terms that may not be acceptable to you.

    For example, one travel insurance policy may only pay for trip cancellations for a specific set of reasons. It may only pay for emergency situations (such as when you get sick or when someone close to you, like a parent, passes away before the trip). You would want a more comprehensive cover, so that when you suddenly lose your job, you are able to get a refund if you do decide to cancel the trip. This is something you can do under a cancellation for any reason cover.

    Another example would be related to baggage cover. One travel insurance plan may only pay when your belongings are lost due to theft but may not pay when the same belongings are damaged or lost.

    Thus, the price is often affected by the offering in terms of benefits and benefit limits. You should check these to make sure you are paying excellent value for your money.

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