Paulo Coelho once said, “Travel is never a matter of money but of courage”.
And he is right because without travel insurance it takes a great deal of courage to travel near and far. To be able to travel without having to worry that your nest egg may be depleted if something were to go wrong is courageous indeed.
Most people don’t buy travel insurance because they think it is an unnecessary expense. Something that is far from the truth.
If you buy an insurance policy that provides you with adequate protection, you could very well end up saving a lot of money if you were to face any problems while on holiday. And it doesn’t cost you much either! At least not with these 7 money-saving hacks!
Yes, travel insurance is usually the last thing on your checklist when you plan a trip. So, you end up buying (if at all you do buy travel insurance) whatever policy your travel agent or airline sells you because it is convenient.
You see, most of these policies offer basic coverage but are quite expensive for the protection they provide. This is because travel agents, travel portals, and airlines tend to add a hefty commission to the policies they sell.
Your best bet would be to buy your insurance policy directly from the insurance provider.
Do you travel only once or twice a year? Then, buying a single-trip policy each time you travel makes the most sense.
If, however, you travel frequently, multiple single-trip policies could turn out to be more expensive than buying an annual multi-trip policy.
Annual multi-trip policies are valid for a 12-month period. So, you are protected on any trip you take within that period to any of the countries covered by the policy.
Take a look at this illustration to better understand how an annual multi-trip policy helps you save money:
|Destination from Singapore||Travel Duration||Single-trip (Economy Policy)||Annual Multi-trip (Economy Policy)|
|Indonesia||1 December – 4 December||S$34||S$306|
|Malaysia||15 January – 18 January||S$37.50|
|Sri Lanka||30 January – 2 February||S$38|
|India||5 February – 8 February||S$41|
|Hong Kong||19 February – 22 February||S$38|
|Japan||24 February – 27 February||S$41|
|Australia||1 March – 4 March||S$41|
|New Zealand||8 March – 11 March||S$41|
|China||20 March – 23 March||S$41|
*The figures above are indicative only and are based on the Economy travel insurance policy provided by Chubb Insurance for a travel period from December 2018 to March 2019.
As you can see, if you buy an annual multi-trip policy, you end up saving S$46.50! Do keep in mind, though, that these costs are based on a travel duration of 3 days each so a longer travel period means you probably may end up paying more per trip.
If you are travelling with your family, then buying a policy with family coverage makes more financial sense than buying individual policies.
Similarly, if you are travelling in a group, you could consider getting a group policy. This will prove to be cheaper than purchasing individual insurance policies.
Is it possible to be too protected?
Well, in financial terms, it is possible.
Insurers will try to sell you a policy that provides all sorts of coverage from millions in evacuation and terrorism cover to thousands in replacing damaged sporting equipment.
The trick is in figuring out what you do need and making sure that your insurance policy covers those situations. For instance, unless you are going skiing, you don’t need an insurance policy that provides coverage for lost or damaged skiing equipment. Especially, if your travel plans only involve lazing around on a beach.
One way to ensure that you don’t end up overinsuring is to research the country (or countries) you are travelling to and detail out what activities you plan to take part in. Once you do this, make sure that you factor in any contingencies such as your vehicle breaking down or a flight being overbooked. This way you will know if you are buying a policy that provides protection for activities or categories you really need.
This isn’t really a hack as much as it is something that you should keep in mind before you purchase your travel insurance policy.
Some insurers provide discounts on your travel insurance policy if you have other insurance policies with them. Certain providers even have festive discounts or discounts for customers of a particular bank.
Even if you aren’t aware of any current offer, don’t hesitate to ask your insurance provider if there are any promotions you can take advantage of.
If you have a travel credit card, chances are it comes with complimentary travel insurance. Most travel credit cards provide insurance coverage up to S$1 million. And while the coverage isn’t comprehensive, it still includes all the basics such as coverage for flight cancellations, loss of luggage, and medical emergencies among others.
So, if you plan on purchasing a basic insurance policy, you could consider using the policy that comes with your credit card instead. Of course, for the travel insurance on your credit card to kick in, you will probably have to charge your entire trip to your card.
A good rule of thumb if you plan on using the travel insurance that comes with your credit card is to read the fine print to make sure that you have fulfilled all the conditions necessary for the coverage to be applicable.
Ever checked your policy, seen the term excess, and wondered what it meant?
Excess is basically the risk amount that you are willing to assume. So, when you make a claim, you agree to pay a portion of the loss and the rest (up to the coverage limit) is covered by the insurer.
This begs the question, why increase the excess? Why assume a greater risk?
Well, higher the excess, lower the premium you end up paying for your policy. This is a great option if you think that you won’t face any hurdles during your trip and even if you do you have enough money to make the required payment.
Keep in mind, though, that not all policies come with this feature and others have excess that is fixed and cannot be varied.
At the end of the day, a good travel insurance policy ensures that you are protected from financial distress. And these money-saving hacks will ensure that purchasing a policy will not send you into financial distress either.
Looks like Paulo Coelho really did know what he was talking about – travel doesn’t really have much to do with money!