Cheap Travel Insurance? Beware the Sales Pitch

Consumer ads and websites are full of sales pitches carefully designed to lure you into buying travel insurance on price alone. The worst of these are ads by companies or brokers that “compare” their premiums against one or two of their competitors. Such comparisons are meaningless. They are apples and oranges. Don’t fall for it.

You can’t compare the price for covering a 35-year-old runner in perfect health with that of a 62-year-old boomer taking medications for high blood pressure and slightly high cholesterol. Neither can you compare a plan that has a built-in $250 deductible with one that covers you from the first dollar, or one that purports to cover you for 15 days against another that will cover you for half a year.

Some plans have built-in trip cancellation/interruption benefits, while others don’t—or if they do, their benefit levels differ. Some plans will cover you in the US, with its high health costs; others will only cover you outside the US. The variables are endless.

The point is that price comparisons are only valid if they are based on YOU—your health status, your medical record, your age, your duration of travel, your destination, the level of benefits you choose, the amount of deductible you select (if any). Do you have any pre-existing conditions? Have you been hospitalized in the past five years? How many medications do you take? All of these are variables that will affect the price.

Twenty years ago you used to be able to go to the airport, put some coins into a vending machine, and buy travel insurance for your trip. The trouble was that it didn’t cover very much: your provincial government paid most of your out-of-country medical costs. They don’t do that anymore. And the private insurance you buy today must be structured to cover some potentially massive medical bills. That can’t be done by selling you insurance products off the rack.

Actually, Canadian private travel insurance is already relatively cheap. Most of you can get daily coverage for the cost of a cheeseburger, fries, and a large diet coke (beer is extra). As you get older, it will cost more, but you have to expect that. Still, compared to what your friends in the US pay for their health insurance, yours is a bargain. And the reason it remains so affordable is that it is has limitations and exclusions, it is there to cover only unexpected, unforeseen emergencies, and it is calibrated to your specific requirements. If it was a “one size covers all” product, most of you wouldn’t be able to afford it year after year.

It may sound complicated, but it’s not—not if you’re dealing with a broker or agent that understands travel insurance. Not all do. Make sure you have the assistance of reliable people. And shop around for prices, absolutely. But make sure the product fits YOU.

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