Over the past few years, travel insurance has gained immense popularity, moving from a fringe service to a financial necessity. It is designed to cover medical expenses and other optional expenses in the event of an emergency or sudden illness. However, travel insurance rates work much differently than standard health insurance rate calculation. Some of the differences factored into the premium depend on whether a person is on vacation or traveling for business. Other factors use principles based on risk assessment.
The more options and coverage provided by the travel insurance policy, the higher the travel insurance rates will be. While medical expenses are a given for travel insurance, specific circumstances can be limited. Some forms of travel insurance include standard office visits if sickness should befall, while other forms cover only emergency room visits. Hospital stays and surgery may or may not be covered. Emergency transportation is another option included in rate calculation.
Other options available for travel insurance policies include accidental death or dismemberment, funeral expenses, body transportation, and personal liability for damages or injuries caused to others. Some options available for travel insurance that are included in rate calculation have nothing to do with medical expenses, but can be important when traveling. These types of coverage include trip cancellation or interruption, delayed departure protection, loss/damage/theft of personal possessions, baggage delays, and international legal assistance.
While travel insurance uses some of the common exclusions of standard health insurance, some companies will eliminate the exclusions by introducing a higher rate calculation. In some cases, pre-existing conditions, such as diabetes, asthma and pregnancy, can be included in policy coverage. Another common exclusion that can be eliminated with a higher rate is injury or death brought on through acts of war or terrorism. One exclusion that usually cannot be included, no matter the rate, is injury/death that occurs while intoxicated or under the influence of illegal drugs.
Despite all of the exotic factors involved in travel insurance rate calculation, the single greatest factors are the length of the trip, age of traveler(s) and the trip cost per person. The longer the trip, naturally, the greater the chance that illness or injury will befall the policyholder. To lower rates, most companies give travelers options to pay a portion of medical expenses out-of-pocket through a deductible system. Travelers can also choose a maximum coverage limit to further reduce the premium rate.
The only way to be sure of a rate is to ask the travel insurer for a quote. Quotes can be provided instantly and free of charge online, over the phone, or from an agent in-person.