Snowbird Tip: Go for Deductibles

The biggest cost saving you are likely to get when buying travel insurance depends on your deductible. Don’t be timid: go for the biggest you can afford. A $500, or $1000, or even $5000 deductible can save you a lot of money, especially if you think of it as an amortization over time.

If you shop around, you can find many policies that will give you up to 20 or even 30 percent premium reductions for  substantial deductibles.  If you take such deductibles four or five years without generating a claim, you will have earned enough savings to get one year free.  And according to all of the statistics available, if you are in reasonably good health, your chances of going that long without a claim are better than even. The great majority of travellers do not encounter claims, even for long trips.

Consider the basics: a deductible is that share of any medical claim you are obligated to pay to the hospital or doctor before your insurer’s share kicks in. If you have a zero deductible, you pay nothing: but your premium offers no discount—it’s full price. If you have a $100 deductible,  your discount is minimal, but it’s worth it to the insurer because the manpower required to handle a small $100 claim costs a lot more.

If you are prepared to pay a $1000 deductible, your premium may be discounted by perhaps 10 percent, and depending on how long you are travelling and how much your premium is, that savings might be quite considerable.

You have to pay that first $1000, but if your hospital bill is $100,000, your share is going to look pretty small and you’ll be happy enough to pay it.  After all, the hospital staff may have saved your life, and what price would you put on that?

A key element to consider in deciding on deductibles is your own economic comfort level.  And here you need to be honest with yourself.  If you are going for a six month vacation to a foreign country (and Florida and Arizona are in foreign countries), and you honestly believe you can’t afford $500 or $1000 in the event you encounter a life-saving emergency, are you wise in taking that vacation in the first place?

Certainly, travel insurance is designed to protect you against economic calamity should you become seriously ill far  from home, but that doesn’t mean you have to pay more for it than you should.

If, as a experienced traveller,  you can look back on a five-year period during which you saved 15-20-or 30 percent on your premiums by taking modest deductibles each year, without having paid out anything for medical bills, you may be very pleasantly surprised at what you have earned.  And if you’re just starting out your snowbird “career”, this is the time to put that foundation in place.

Good snowbirding takes planning.  Travel insurance is fundamental to that plan.

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