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With higher disposable incomes and cheaper airfares, travelling abroad has become a common affair for most people. The months from April to June account for almost 45% international traffic each year. Some of the top destinations favoured by Indians include the US, the UK, Canada, Australia, SEA and the Middle East. Europe and Africa are fast becoming sought after destinations.
Though international air traffic is growing at around 5-8% and domestic travel by 15-20%, penetration of travel insurance is estimated at just around 20% for leisure travellers abroad. However, with the rise of a number of online ticketing platforms, cheaper airfares and online insurance offerings by various general insurance companies, there has been a growing awareness on the need for protection while traveling on a holiday. In India, around 70% of travel insurance is distributed through travel agents, around 20% through individual multi-line agents and brokers and about 5% through airlines.
A small but significant and growing percentage of travellers also buy travel insurance online which currently has about 5% penetration. Indian travellers are realising the many benefits of travel insurance, most significantly that they will be able to enjoy their vacation completely, with the added assurance of protection in a strange land, should the need arise.
It is important for any individual, while opting for travel insurance, to be aware of what the policy covers and its exclusions. Customers should understand the various travel insurance policies and choose one according to their requirements. General insurance companies offer various, differing travel insurance products. To differentiate between insurers, factors such as the cover options available, premium amount, medical cover, upper-age limit should be considered.
The premiums of the policy depend upon the destination (country of travel), the duration of travel, age of the traveller and the level of coverage chosen. Premiums are higher for North and South America vis-a-vis other countries. Most insurers offer coverage for travellers between the ages of 6 months and 70 years and many also have Senior Plans for travellers between 71 and 80 years of age. The duration of travel insurance policies are up to a maximum of 180 days per trip. Most travel insurance solutions cover all important areas such as medical treatment, personal accident, emergency evacuation, repatriation of remains, hijack, trip cancellation, curtailment or delay, baggage loss, delayed baggage, personal liability, etc.
Further, there are exclusive insurance covers which offer policy holders specialised protection. For instance, insurance which predominantly covers hospitalisation arising due to sickness or accident while abroad. Baggage loss and baggage delay are commonly experienced today by travellers across airlines and travel insurance does cover this risk. However, this coverage is only for baggage that is in the custody of the common carrier, which in most cases is the airline. One must keep in mind that it will cover only checked-in baggage and delay in receiving baggage outside Indian boundaries. So if there is a delay of baggage in any of the cities in India, while a person is flying into the country, it will not be covered by the policy.
Other travel insurance elements cover inconvenience caused due to trip delay, trip cancellation, missed connections and loss of passport which form a part of the travel policy. Also covered is the possibility of hijack, a very real danger. There is also the possibility of a personal liability arising on part of the traveller, which can lead to litigation in the foreign country. Some insurance policies cover this risk too. Some travel policies also offer protection if the unattended house back home is burgled, while the policyholder is abroad.
Most policies do not cover pre-existing ailments. The insured needs to declare pre-existing medical conditions before they travel. Most policies exclude acts of terrorism, war or war-like actions, mental disorder, stress pregnancy, suicide, self-inflicted injury, anxiety, alcoholism, abuse of drugs, infection of HIV/AIDS. Some other exclusions are hospitalization or accident caused under the influence of drugs or other intoxicants, exposure to excess radiation, nuclear and explosive equipment, congenital anomalies, participation in professional sports, skydiving, hang gliding, bungee jumping, diving etc.
It is always advised that insurance is bought from a registered insurance company with a good brand name, an international presence and a strong track record. Customers should check the claims settlement record of the insurer, the service providers abroad and that the promised covers have been included in the policy schedule. It is advisable that all travelers ensure that they cover themselves adequately to protect themselves from any unforeseen eventuality that could turn their holiday into a nightmare abroad.
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