This article is a general guide to travel insurance policies, including some possible terms but is not a substitute for careful review of your own policy. Travel insurance policies differ markedly in their terms and conditions.

Like any insurance, the cost depends on a number of factors. The rule of thumb, however, is travel insurance package plans cost between 4% and 8% of the total trip cost.

Where to buy
You purchase travel insurance for international trips through an insurer in your country of residence, which means the country to which you’d want to be evacuated to or return to after a serious medical emergency and/or the country you’d need to travel to if a family member became very ill (these are assumed to be the same country).
If travelling within your country of residence, you can buy cheaper domestic travel insurance within that country, but you may decide that you do not need it at all if you are willing to risk losing costs associated with cancellations and so on.
You can obtain travel insurance through your travel agent, your normal insurers, or any one of a number of specialist travel insurers. Travel agents sometimes sell overpriced policies as you are something of a captive audience. Shop around. Because travel insurance policies are somewhat interchangeable, there are a number of websites where you can compare policy costs. Sometimes you may be insured via an existing deal. Some credit card companies insure any trip you take as long as you buy the tickets on a particular credit card. Business travellers may be covered by a company-wide insurance policy, but if you intend to take any side trips or have a personal holiday, check the coverage: usually personal holidays on the side must be of a fairly short length to be covered by a business policy. Be sure to check these existing deals carefully and ideally get confirmation in writing of your coverage. Very regular travellers may find that “ongoing” or “periodic” travel coverage, typically purchased a year at a time, can be cheaper than insuring each trip individually. Most travel insurers offer this option, and major businesses often purchase such coverage for their key travelers.

Just like any insurance plan, there are cost factors

The following are the main factors that affect the cost of the different travel insurance plans:

In most cases, a travel insurance package plan will provide protection for medical expenses, emergency evacuations, trip cancellations, loss of baggage and belongings. Senior citizens and travelers with pre-existing medical conditions will be required to buy specific travel insurance plans, and they will pay a little more because it’s deemed more likely that they will have to file a claim.

Travelers who choose a travel medical plan won’t have some of the package plan benefits, like trip cancellation coverage for example, but the plan cost can be a low as dollars per day. Some travel medical plans also have selectable options that a traveler can add to the policy, such as hazardous sports coverage, that will raise the cost slightly, and deductibles, that will lower the cost slightly.

Your choice of options may affect the price as well

Travelers who add coverage options will pay a little more for those coverages. Some of these options include:

• “cancel for any reason”
• “cancel for work reasons”
• rental car coverage
• identity theft protection
• hazardous sports
• deductibles
• non medical evacuation coverage
• concierge services
• athlete/student coverage
• golf course closure coverage
• sports coverage

Adjustable coverage limits and deductibles also affect price

Per person coverage limits, such as the maximum for medical evacuation or life insurance, will affect the cost of the policy. If you choose $50,000 for life insurance protection versus $25,000, your policy will be slightly higher.

Some travel insurance policies apply deductibles to certain benefits, such as baggage coverage or emergency medical coverage. Similar to your health policy at home, a deductible is the out-of-pocket amount a traveler is responsible for before insurance begins picking up the remaining costs. If you select a higher deductible amount, say $100 versus $50 for emergency medical, then your travel insurance plan will cost less.

Making adjustments to the plan to suit your comfort level is a great way to keep the cost of travel insurance affordable.

Let’s look at an example

Let’s say you’re a 32-year old visiting an all-inclusive resort in the Bahamas for a week in June (before hurricane season starts). Your pre-paid trip cost is $3,250.00, and you are buying a package plan to have comprehensive coverage. Let’s see how three of the most popular plan benefits can help you if you have to make a claim.

* Some benefits like hurricane coverage require you to purchase your trip insurance soon after making your trip payment (usually within 10-15 days).

What happens when you don’t have travel insurance

• If an out-of-season hurricane destroys your destination, you could be out the entire $3,250 in pre-paid non refundable expenses.
• If a connecting flight is delayed overnight due to severe weather, you could have to pay as much as $150 for a hotel room and more for meals while your already-paid-for room sits empty in the Bahamas.
• If, while on vacation, you get word that your mother has been in a car accident and you decide to end your trip to be with her, you would not only lose the remainder of your non refundable costs but also have to pay additional money to book a new flight, rent a car, and more.

It’s easy to see how common travel problems can become very expensive without travel insurance. While travel insurance isn’t free, it does a lot to alleviate the risk a traveler faces if something goes wrong on a trip.

Comparing plans to get the best deal

Comparison tools help you view and compare plan details, and also do some price shopping.

Summary

• Travel insurance typically costs 4-8% of the total trip cost
• Trip cost, trip length, and age of travelers are the main pricing factors
• Policy add-ons or upgraded coverage limits can affect price
• Use a comparison site to compare prices

Tourism has become a popular global leisure activity. International tourism receipts grew to US$919 billion (euro 693 billion) in 2010, corresponding to an increase in real terms of 4.7%. As a result of the late-2000s recession, international travel demand suffered a strong slowdown beginning in June 2008, with growth in international tourism arrivals worldwide falling to 2% during the boreal summer months. Tourism is important and in some cases vital for many countries, such as France, Egypt, Greece, Lebanon, Israel, United States, United Kingdom, Spain, Italy,and Thailand, and many island nations, such as The Bahamas, Fiji, Maldives, Philippines and the Seychelles: it brings in large amounts of income in payment for goods and services and creates opportunities for employment in the service industries associated with tourism. These service industries include transportation services, such as airlines, cruise ships and taxicabs; hospitality services, such as accommodations, including hotels and resorts; and entertainment venues, such as amusement parks, shopping malls, music venues and theatres.