Domestic and Overseas Travel Insurance in India – An analysis

Introduction

Travel is an exciting proposition and beckons the young and old alike. As the renowned writer Hans Christian Anderson has put it, “to travel is to live”. Whether it is sun kissed beaches, verdant hills, historical places, famous cities or exotic foreign locations, travel has a charm of its own.  Indians are now travelling extensively. However, it would be prudent to give a thought to the risks and losses which one is likely to encounter while travelling and the available insurance protection; hence the utility of Travel Insurance.

There is however a new problem looming on the travel horizon. The novel Covid-19 virus infection has caused widespread disruptions of life and travel globally. It has already been declared a pandemic by the World Health Organization. Many countries are under lockdown and globally travel has totally been disrupted. In fact, internationally, airlines such as Emirates, Cathay Pacific, Air-China, Lufthansa and Etihad have put their staff on unpaid leave due to plummeting demand and ticket cancellations. Even as this essay is being written, the situation is rapidly evolving. However, it is expected that things will improve in the future and travel will once again begin in a big way, after enforced lockdowns.

There are many different types of domestic and overseas travel covers available in India. There are covers for solo travellers, students, families, senior citizens and annual policies for those who travel frequently. There are also some new and innovative covers and low cost covers. Some of the different types of covers, policy exclusions, modifications required for betterment and the need for regulatory attention to some areas will be examined in this essay. The responses of insurers to the novel Covid-19 will also be examined. The components of a suitable policy for an overseas traveller will also be analysed.

Traditional Overseas Travel Insurance by Public Sector Insurers

Traditionally, Overseas Travel Insurance has been a sold as a package policy. I would like to provide a typical example of Overseas Mediclaim policies marketed by Public Sector General Insurers by citing those offered by the National Insurance Company Limited, (NICL). There are three main categories of policies[1]. Specific policies are available for persons travelling abroad on Business and/Holiday, Employment and Studies Travel and for Corporate Frequent Travellers. The policies do not cover persons going abroad for treatment or travelling against medical advice. Pre-existing diseases are not covered. Medical and diagnostic test reports are required for persons over 70 years of age and for over 60 days of travel. An international service provider is available for claims assistance.

The Business and/or Holiday Policy has six sections; namely Medical Expenses and Repatriation, Personal Accident, Loss of Checked in Baggage, Delay in Checked in Baggage, Loss of Passport and Personal Liability. There are four Plans with separate Sum Insureds varying from 50,000 USD to 5,00,000 USD in four slabs. In case, no Medical Reports are submitted due to paucity of time; in case of persons above 70 years of age, a restricted Medical Expenses Cover for 10,000 USD is allowed. There are also Section wise sub-limits and deductibles. Standard exclusions apply to the policies. The Policy is issued for a maximum period of 180 days, at a time.

The Plan-wise and Section-wise Sum Insured under the aforesaid Policy has been taken from the website of ( NICL)[2] and is as follows:

Section A also covers emergency dental services upto US $ 225 per occurrence for the immediate relief of dental pain, in addition to medical expenses related to illness, medical evacuation, repatriation. Delay in Checked Baggage is only for outbound International flight and the delay is for over 12 hrs. Deductibles are applicable for each section. In addition, Plan K – For travel in Asian countries excluding Japan for business and holiday limited to US$ 15,000.Benefits: Section A:  Medical Expenses, Evacuation, Repatriation-USD 15,000.Section B:  Personal Accident, Permanent Disability- USD   7,500.

The Overseas Mediclaim Insurance Policy for Employment and Studies covers Medical Accident and Illness Expenses Coverage for medical expenses upto the Sum Insured, as approved by a registered medical practitioner and the Claims Administrator.  Medical Evacuation Expenses when as a result of a Injury or illness, an Insured Person is hospitalized the Insurers will pay upon the recommendation and prior approval of the attending physician and the Claims Administrator of this Insurance for the evacuation of the Insured Person to India. In case of death of the Insured person the insurance will pay for repatriation of the remains to India or the funeral expenses abroad, upto a sub-limit. Medical Emergency Reunion expenses in case of a disease of the Insured person that necessitates evacuation to India are also payable upto a sublimit. This section covers the expenses of travel and accommodation of a family member abroad. This policy also covers Contingency Insurance for Sponsored Students. In case the Insured Person is unable to continue his studies due to death or other specified reasons, a fixed amount per month of completed studies will be payable to the  Nominated Sponsor, under this section.

The Plan-wise and Section-wise Sum Insured under the aforesaid Policy has been taken from the website of ( NICL)[3] and is as follows:

There is also a Corporate Frequent Traveller Policy for Corporate directors and employees who frequently travel abroad on work. This is a multi-trip annual policy. It has been specified on the cited website that all policies can be purchased online or by using credit or debit cards.

The products marketed by National Insurance, though fairly comprehensive, have remained static and unchanged for several years and require updating. It would be innovative to look beyond the existing spectrum of eligible persons and expand into uncovered and untapped segments. The existing genre of products exclude many overseas travellers from insurance coverage. Persons above a certain age–profile generally suffer from pre-existing diseases and are especially financially vulnerable if they need hospitalization abroad, as they are excluded from coverage. Also excluded are those persons who are travelling abroad for treatment. These to my mind, are the major drawbacks of such conservative covers and which require modification and change.

Travel Insurance products of Private Insurers

Policybazaar, a web-aggregator registered by the Insurance Regulatory Authority of India (IRDAI) has rated the travel policies of Reliance, Religare, Bharti AXA, HDFC ERGO, Bajaj Allianz and Digit Travel Insurance as amongst the best[4].

I have analysed three of the Travel Insurance Policies marketed by Bajaj Allianz, as reflected on their website[5], as a typical example of travel policies issued by a private insurer. (Disclaimer: I have no connection with Bajaj Allianz or any other private insurer and this compilation is purely for the academic purpose of this essay).  Bajaj Allianz has broadly categorized their policies into a few categories. Some of them are Individual Travel, Family Travel and Senior Citizen Travel. Other products include Corporate Travel Insurance and Travel Asia Policy. They also have a domestic travel insurance policy called Bharat Bhraman Policy and student specific covers.

Their covers broadly speaking include Flight Delays and Cancellations, Medical Treatment and Hospitalization Expenses, Trip Cancellation and Curtailment, Loss of Baggage and Passport and Home Burglary Insurance. They also provide Emergency Cash Advance. This is a comprehensive package of covers encompassing the traditional as well as some new covers. They have also mentioned, that they provide tailor-made plans, if required. They also have world-wide on-call support services.

Several riders can also be added to the base policy, with additional premium, to widen the coverage. The base policies applicable for riders along with the wordings of the riders and the premium required are listed in a convenient and customer-friendly manner. It would be pertinent to note that these riders are a mixture of some unbundled covers in traditional policies with some new and innovative covers thrown in along with them. The riders include Trip Delay Delight, Schengen Cover, Compassionate Visit by a Family Member, Emergency Hotel Accommodation for Family Member, Emergency Hotel Extension for Insured and Family Member, Escort for Minor child or children, Loss of Personal Belongings Cover and Replacement and Rearrangement of Staff. Deductibles are applicable to these riders

The Travel Companion Plan encompasses a group of covers which can be availed of by an individual, a family, senior citizen, corporate or a student. The sectional covers include a package of traditional covers along with Trip Delay, Hijack Cover and Emergency Cash Advance. Claim Payments in Personal Accident Cover and Hijack Cover are on Benefit Basis. Deductibles and waiting periods are applicable to some of the sectional covers, as per the Customer Information Sheet on the website [6]. A special feature of Travel Companion is The Golfer’s Hole-in-one. “A sporting gesture from the company. It offers reimbursement of expenses incurred in celebrating a hole-in-one by the insured during the trip, anywhere in the world (excluding India), in a United States Golfers’ Association recognized golf course.”[7]

I have also selected the Travel Prime Student Plan from the different variants of the Travel Prime group of products of Bajaj for analysis. It is a comprehensive plan for students going abroad for studies. The cover appears to be tailored to the specific requirement of students. There are seven slabs of Sum Insured ranging from 50,000 USD to 1,000,000 USD. The first two pages of the Customer Information Sheet [8] of this policy indicates that the list of covers includes Personal Accident, Medical Expenses and Medical Evacuation, Emergency Dental Pain Relief, Repatriation, Loss of Checked Baggage, Accidental Death and Disability (Common Carrier), Loss of Passport, Personal Liability and Family Visit.

The other Additional Covers as per the relevant Policy[9] which are quite innovative and useful for the insured persons include Bail Bond Insurance, Loss of Laptop, Tuition Fee, Accident to Sponsor, Family Visit and Suicide.  It would be interesting to observe that suicide is normally not covered in many policies.  To quote further from the relevant Policy [10] “ Section 26- Suicide -In consideration of the payment of additional premium as specified in the Schedule, it is hereby agreed and declared that in case of death on account of suicide or attempt to suicide, one-time payment as mentioned in policy schedule would be offered as benefit. Waiting period for 6 month will be applicable for this benefit since departure from India. In case of co-renewal same will be applicable for first 6 months from date of inception of the policy. The Company shall be under no liability to make any payment under Medical expenses, evacuation, Repatriation and personal accident benefit in respect of any Claim for suicide.”

There are also five optional covers, as per the relevant Customer Information Sheet[11] which can be taken with additional premium in the Travel Prime Student Plan; Cancer Screening and Mammography Cover, HIV (Human Immunodeficiency Virus) and AIDS (Acquired Immune Deficiency Syndrome) Cover, Pre existing illness Coverage, Maternity and Baby Cover from Day One, Mental illness and Alcohol related Disorder Cover.  However, these covers have not been mentioned in the relevant Policy Schedule. The policy can be taken for a maximum period of three years and extended by one more year on the basis of a Good Health Declaration Form signed by the Insured.  Thus, a comprehensive cover can be utilized by students going abroad for studies.

The Insurer can be contacted on either their toll-free number or by e-mail. The Claim Settlement Procedure as indicated in the website[12] indicates that a completed claim form must be submitted for all categories of claims.  In case of Medical Claims   Authorization for release of medical information form and the Attending physician’s statement will also be required. In case of non-medical claims the documentary requirements are mentioned on the website

It is worth mentioning here of an innovative low-cost overseas travel insurance product with limited features marketed by an intermediary called Toffee Insurance as per their website[13]. Toffee Insurance has tied up with a number of private insurers and is marketing their products in partnership with them. This comprehensive international travel insurance for all countries comes with a package of covers. The premium is Rs. 346 plus for a policy period varying from one to one hundred and eighty days, appears to be quite affordable.

This policy is available for individuals between 18 years to 70 years of age. Deductibles are applicable for claims. Travel with Tourist/Visitor Visa is covered. Pre-existing conditions and accidents due to hazardous sports and competitions are not covered. It offers a viable and economical option to travellers. The wording is simplified and the digital option makes it attractive to many.

A Comparison of Overseas Travel Insurance premium

The following is a tabular representation comparing the premium charged by some major insurance companies providing Overseas Travel Insurance to various international destinations.[14] For the purpose of the comparison, the age of the travellers is between 33 to 35 years,  sum insured is US Dollar 1,00,000 and the duration of the trip is 15 days.

It may be observed that the comparison between different products should not be made only on the basis of the premium rates as reflected in the table, but after factoring in the sectional covers and deductibles or time excess to arrive at an accurate conclusion, as to which product is value-for-money. It is also to be noted that Apollo Munich Health Insurance is now part of HDFC Ergo Health Insurance.

Travel Insurance and Coverage for Covid-19 Virus 

The obvious concern that arises in the mind of a traveller in these uncertain times, wherein the novel Covid -19 virus infection (CoV) assumed the proportions of a pandemic, is whether or not the overseas travel policies in India cover this virus. There is no divergence in the opinion that there are no specific exclusions in either any domestic or overseas travel policies for epidemics or pandemics like CoV. The Out-Patients-Department (OPD) and/or hospitalization expenses occasioned by this virus would be duly covered, as per the travel plan opted for. However, it is of note that due to the fact that such patients would likely be treated or quarantined in government facilities, the likelihood of claims under these policies is low.

 Apart from the more evident lacunae in the travel insurance sector, there are many more problematic questions that require consideration. Will overseas travel policies at all be issued freely during this period? What will be the status of existing policy holders? As reported[15], insurers have adopted different strategies in this regard. For existing policy holders, it has been mentioned that “IFFCO Tokio General Insurance Co. Ltd will most likely pay medical expenses even if there is a travel advisory in place.”[16]  However for new proposers travelling to China, they will issue policies after ascertaining the specific destination in China and the purpose of travel before issuing policies. “On the other hand, Bajaj Allianz General Insurance Co. Ltd may not pay the expenses if policyholders travel to a country against which a travel advisory has been issued.”[17]  They have temporarily discontinued policies to China, Hong Kong and Macau in wake of the travel advisories.

ICICI Lombard General Insurance Co. Ltd, however, may issue policies based on certain conditions. Sanjay Datta, Chief – Underwriting, Claims, Reinsurance and Actuary, ICICI Lombard General Insurance Company Ltd., said, “It’s an advisory not a ban, therefore we are not bound by it. Insurance companies may or may not issue policies to people as it’s a matter of covering their risks.”[18] In case a country is on a ban list, the insurance company will not issue a policy, he added.[19]

Many travel policies cover losses due to ticket or accommodation cancellation under their Trip Cancellation Cover due to “death, serious injury or sudden sickness requiring minimum three days of hospitalization of the insured or his spouse, parents or children. Inclement weather conditions, natural disasters or the government imposing compulsory quarantine or prevention of travel”.[20] Some experts have opined that as the virus outbreak is not specified in the Trip Cancellation clause of most standard travel insurance plans, recouping these losses due to the Coronavirus related cancellations are not possible. However in my opinion, if compulsory quarantine or prevention of travel by the government due to the Cov leads to unexpected cancellations then such claims should qualify for payment, as these causes are mentioned in the aforesaid cover. However, losses due to cancellation caused by fear of contracting infection are not viable insurance risks. The ‘cancel for any reason’ [21]clause/condition affords some level of trip cancellation protection, if the same is available, and has been opted for by customers.

There is however an ambiguity in relation to claims payment. The article [22] goes on to say “A multi-trip or annual policy may not require you to give the travel details in advance, so you may get the policy. However, at the time of claim, expenses related to a trip to China may not be covered.” This may be extended to include other places where the virus is now spreading. The rationale is not clear as to how the writer has arrived at this conclusion. In my opinion claims under a policy which has already been issued cannot be withheld or rejected unless the policy is cancelled by the insurers and premium duly refunded.

It is quite clear from the aforementioned discussion, that there is considerable divergence in the views expressed by different insurers. This ambivalence is bound to confuse customers. It is pertinent to note that the Insurance Regulatory Development Authority of India (IRDAI) has already issued Guidelines on handling of claims reported under Corona Virus vide their circular no. IRDAI/HLT/REG/CIR/054/03/2020 dated 04-03-2020. These guidelines have made it clear to insurers that CoV related claims are to be dealt with expeditiously under their health policies. It is time that the Regulator also takes similar initiatives in the sector of domestic overseas travel insurance for the convenience of customers.

Domestic Travel Insurance Covers

 Domestic Travel Insurance is also available across a large number of public and private sector insurers in India. Since such covers are not mandatory, it is not essential to avail of them for domestic travel, as against the requirement of such products for international travel to several countries, where visa requirements make them a necessity. However, it would be prudent to do so. Though the reasons for availing cover may not seem to be as compelling, it is particularly necessary to avail of this insurance especially if the traveler does not have standard Health Insurance and Personal Accident Covers. It is also quite useful to cover possible losses arising out of flight delays and cancellations.

All Indian citizens between six months to seventy years of age can avail of these policies. The exact age may, however, vary across different insurers. Foreign nationals in India can also avail of these policies with proper documentation, if they are present on work or tour. In fact such policies would be quite useful for the latter category of persons.

As per the website of Bankbazaar.com[23] , which describes itself as “a neutral online marketplace”, most domestic travel policies offer a package encompassing many benefits.  According to this site, these benefits include the following:

1. Accidental demise and PTD (24 hours)

1. Coverage for accidental hospitalization
2. Medical evacuation advantage in case of emergency
3. Deportation of remains benefit
4. Individual liability benefit
5. Accidental hospital money Benefit
6. Hotel accommodation rent if the trip is postponed due to delay in train/ plane arrival.
7. Loss of Ticket – Rail/Flight following accident
8. For transportation of family
9. Additional staff assistance in case of emergency (Only for business tours)
10. Ticket expenses if you miss the train or flight due to an accident

Some of the major providers include Reliance, Religare, Apollo Munich (now HDFC ERGO), Bajaj Allianz and TATA AIG.

To illustrate the point ; the Bajaj Allianz Bharat Bhraman Insurance Policy is one such  policy, which is designed to take care of the risks faced by travelers travelling within India. It is a comprehensive cover with one compulsory and several optional sections. In fact, this makes it a very flexible policy which can be tailored to the specific needs of the domestic traveler. As per the Customer Information Sheet of this policy [24] there is a Base Cover which is the Personal Accident Section. Further, depending upon the mode/modes of transport opted for by the Insured he can opt for various optional covers. The optional covers include Accidental Hospitalization Expenses, Hospital Daily Allowance, Emergency Medical Evacuation, Personal Liability, Repatriation of Remains, Trip Cancellation, Emergency Hotel Extension, Missed Connection, Home Burglary Insurance, Bounced Hotel, Compassionate Visit by a Family Member, Delay of Checked Baggage, Loss of Checked Baggage, Trip Curtailment, Trip Delay by Scheduled Aircraft, Loss of Baggage and Adventure Sports Benefit. It may be observed that the covers are in line with those covers available for overseas travel insurance. Moreover, the Insured has the option of selecting those covers which he requires and ignoring those which may be already covered elsewhere.

An interesting low cost domestic travel cover is  provided by a start-up Digit Insurance[25]. They are offering a fixed-benefit cover for only domestic flight delays at a premium of Rs. 49/-, for a single flight. Subject to conditions, there is a benefit of Rs.1000/- for a delay of 90 minutes or more during the travel months of February to November. For delays of 120 minutes or more during the travel months of December and January, there is a benefit of Rs. 750/-. The claim process is mobile phone oriented and simple and hassle free.  On conclusion of the procedure, the money is credited to the account of the Insured and can be used for any purpose that he deems fit.

The Digit on the Move Policy of Digit Insurance also covers travel in India or foreign countries. It is a comprehensive travel cover. As per Areas Covered it mentions [26] “Area Covered-The area covered shown on your policy schedule which will be one of the following:•India •Asia Excluding Japan• Europe –Schengen Countries• Worldwide excluding USA, Canada and all Caribbean Islands• Worldwide including USA, Canada and all Caribbean Islands”.

Standard Travel Policy Exclusions

Be it domestic or overseas travel policies, there are some fairly standard policy exclusions, common to all insurers. As far as medical coverage is concerned; policies generally exclude the following: pre-existing diseases, those travelling against the advice of a physician, has received a terminal prognosis or those going for planned treatment. However, of late, some insurers are covering declared pre-existing diseases upto a limited and specified quantum. The new global health policies (analysed later) cover planned treatment abroad with the prior permission of the insurer. Treatment other than allopathy is normally excluded. Pregnancy related complications are covered in a very restricted way, by some insurers.

Travel policies also exclude expenses arising from suicide, attempted suicide, mental illnesses, self-inflicted injuries, alcoholism, abuse of drugs, HIV and AIDs and venereal disease. However as stated earlier, a few insurers are now covering some of these exclusions, with additional premium, in their student-specific policies.

Persons participating in naval, military or air force operations are also excluded. Travelling via transportation not licensed to carry passengers is not covered. Claims are also not payable for war, acts of foreign enemy, hostilities war be declared or not and nuclear radiation or contamination. However, Terrorism is covered unless it is explicitly excluded; as it is done by some insurers.

Expenses arising from Adventure sports are covered by a few insurers, to a limited extent. Baggage Delays are generally covered when they exceed 24 hours. Most of the coverages also come with their own deductibles or time excess.

Trip cancellation cover pays for cancellation of the trip in advance due to specified reasons, which varies from insurer to insurer. Payouts include unrecoverable expenses due to ticket and hotel cancellations, but the terms and conditions need to be verified  carefully.

Some innovative overseas travel insurance products

The issue of coverage of pre-existing diseases is in my opinion, a very important dimension of overseas travel insurance plans. The costs of hospitalization treatment in USA/Canada and Europe etc. being prohibitive; it is essential to have adequate cover in this respect. Otherwise the traveller may find his savings wiped out in an instant. Moreover, a pre-existing disease cover must also be taken since there is a preponderance of pre-existing diseases, not only in senior citizens, but now even within the younger generation.

However, only a handful of overseas travel policies with this condition are to be found online[27]. This data has been taken from the website of a registered web-aggregator, namely Instant Cover Insurance Web- Aggregator (EIndia Insurance).

In the 55 year old age profile of a traveller wanting a worldwide cover including USA/Canada for USD 50,000, TATA AIG’s Silver Plan under Travel Guard offers a limited cover of upto USD 1500 to relieve acute pain or stabilise the patient for further treatment. Bajaj Allianz’s Assist Card Classic covers pre-existing conditions upto USD 300 (deductible USD 100).  Reliance General Insurance’s Travel Care Standard covers pre-existing diseases which are of a non-critical nature upto the maximum limit of the sum insured, only in life threatening conditions. Religare’s Explore Platinum $50,000 and Explore Gold $50,000 cover previously declared pre-existing conditions only in life-threatening conditions upto a limit of 10% of the sum insured. Thus the customers with pre-existing conditions have very limited options.

In this backdrop of restricted covers, global health insurance covers offer a much better option to the customers with pre-existing conditions. Global Health insurance covers have been launched by a few Indian insurers. They cover health care treatment both in India and abroad under the same policy. Not only is sudden emergency hospitalization covered abroad. Persons going abroad for planned hospitalization, with the prior approval of the insurer, can also obtain coverage under a global health plan. This is a significant feature of this genre of policies as normally persons travelling abroad for planned hospitalization are excluded from overseas travel policies

Some of the insurers who have launched such products[28] are Religare Health Insurance Company, Max Bupa Health Insurance, Cigna TTK Health Insurance and Apollo Munich Health Insurance (now HDFC ERGO). This information has been sourced from the website of the web aggregator Bank Bazaar, registered by The Insurance Regulatory Authority of India.

Religare Care is one such policy featured in the list of global policies[29].  The policy is available for persons between the ages of 5 years to 75 years with lifelong renewability. It can be availed of by individuals or families on floater basis. As of now there is a  sum assured of Rs. 60 lakhs plus . The Global Coverage Benefit allows treatment anywhere in the world. It allows for treatment upto a maximum period of 45 days in a single trip and upto 90 days in all, in a policy year. But additional premium has to be paid to extend the cover to the USA.  Co-payments are applicable. The treatment coverage that has been mentioned appears to be fairly comprehensive. However it has not been clearly mentioned as to whether all the benefits indicated, are also available for treatment abroad, as well. It is also not clear whether cashless treatment can be availed of abroad.

However, critics advise caution prior to opting for global covers. No doubt, they seem to be a solution to some of the constraints presented by standard overseas travel policies; but it would be prudent to take a considered view of the nature of coverage before paying a high premium. As per a leading Wealth Advisor, Mr. Vivek Rege[30], Religare Health Insurance Company does not pay for pre and post hospitalization treatment costs abroad. Moreover, there are additional expenses for Out Patient Department optional cover. The co-payment clause also adds to the expenses. The maternity benefit extension is only available in a family floater and so it is ruled out in case of an individual.

He also goes on to say that these covers maybe four to five times as expensive as standard health policies, particularly as the sum assured necessarily has to be high. The benefits are well-defined and may not allow flexibility at the time of claims. Pre-existing conditions also have a waiting period of three to four years, which varies across policies and so one has to pay premium for quite some time before one enjoys this advantage. Further, insurers of these policies settle claims on reimbursement basis mostly, and so there is a huge out-of-pocket expenditure in foreign currency before receiving the claim in India.

However, on balance, it is still a new and better proposition for the foreign traveler compared to the standard and restricted covers available earlier. It is expected, that with time, the range of covers may also become more affordable, comprehensive and customer friendly.

Which is the best Travel Overseas Insurance Policy?

This is a question which would definitely come to the mind of the Overseas Traveler, when he is looking for travel insurance at the time of going abroad. However, even for academic purposes, to give a considered answer to this question requires a lot of thought. Selecting travel insurance should not just be an afterthought after all other travel arrangements have been made. This is as important as other travel arrangements, as some perils can jeopardize an otherwise perfect trip. This is where a good overseas travel insurance plan is a life saver. A budget should also be kept aside for travel insurance.

 A good overseas travel plan would definitely not be the cheapest policy or the one casually recommended by the overseas traveler’s travel agent. Though of course the Proposer should compare prices, and the travel plans of the major insurers , there are many other important aspects to be examined, as well.

First and foremost, whatever may be the age profile of the Proposer it would be wiser to focus on the medical costs of hospitalization in his destination country to decide what would be an adequate sum insured for him and or his family. Then he and his family should also go in for a thorough medical check-up and ascertain their state of health well in advance. Does he have any pre-existing disease? Then it would be prudent to select either a global cover, if funds permit, or a policy with pre-existing conditions. He should also check for other benefits such as Medical Evacuation,  Dental Treatment, Outpatients Department Cover (in case OPD treatment is required) Hospital Cash and availability of cashless facilities to avoid out-of-pocket expenses in foreign currency. Is he a senior citizen? Then the requirements will be different and suitable travel plans have to be examined.

A Personal Accident cover is usually part of the package and is very necessary. Baggage loss covers, loss of Passport and other important travel documents are part of the standard covers but usually come with a deductible. The same must be verified in advance. Delayed or cancelled flights can be covered and the customer can get compensation. Additional stay in hotels due to hospitalization can also be covered and it is for the customer to decide whether these covers are really necessary.

If he has purchased flight tickets and has hotel accommodation booked in advance then he should also check the trip cancellation cover rules as otherwise he will suffer a big loss, in case of trip cancellation due to some unforeseen peril. There are different conditions for payouts in trip cancellation covers across different insurers. The same should be examined before taking the cover, as it may prove to be very useful in case of trip cancellations due to some unforeseen reason.

Last, but not the least the claims ratio of the selected insurer must be examined to verify as to what is their record in claims payout. Is it satisfactory as compared to other insurers or does it rank way below the others? The policy conditions and exclusions vis-à-vis the coverages must be examined thoroughly. The claims procedures for different kinds of claims must also be examined to avoid unpleasant surprises at the time of claims.

To sum up the best travel insurance policy is one which meets the customer’s specific requirements adequately within a reasonable premium; provides him with the promised support at the time of distress and is prompt with the payout, at the time of claims.

Steps for hassle-free claims under Travel Insurance Policies

The most important part of any policy is the timely payment of claims and the same holds true for Travel Insurance Policies.

To start with, it would be important to correctly fill in the Proposal Form and not withhold any information which would prejudice claims later on. For smooth claim payment under travel policies it is important to be very clear about the policy terms and conditions and particularly the exclusions. For example, pre-existing conditions are excluded in most travel policies. So claims may be excluded for that reason. This is in fact a common reason for rejection of medical travel insurance claims and should not come as an unpleasant surprise at a critical time and cause fund problems.

If one presents an adventure sports related claim, that too would also be rejected under most policies, unless it has been specifically covered. It is common to indulge in alcohol during holidays. However this is again a reason to exclude claims by insurers. So it is important to know at the outset as to what is not covered by the insurer.

To give another topical example it has been reported that the onset of Covid-19 caused many persons to cancel their overseas trips to the affected countries, even before advisories and flight cancellations started. But they did not get the payouts they expected under their Trip cancellation Cover because the onset of a pandemic or pandemics in general are not listed in reasons why trip cancellations are allowed.

In this context, it would also be relevant to say that advisories by the insurers which are available on their website from time-to-time should also be checked to avoid unexpected setbacks later on, even if one has already purchased a policy from them. This will avert problems under multi-trip annual policies at the time of claims. For example many insurers have issued advisories about their policies with the onset of Covid-19.It would also be prudent to check with the insurance advisors or the insurer’s Helplines  on their toll-free numbers for any queries in this regard, before embarking on a trip,in case of doubt, to avoid confusion later on.

The claim procedure for medical and non-medical claims is also mentioned clearly in all websites. The requirements for say a baggage loss claim, would be different from a medical claim. So the procedure has to be carefully adhered to for smooth and hassle-free claim payment.

Last but not the least, it would be better if some basic documents are always maintained carefully as well as keeping a soft-copy of each, as they will always be required for claims. These documents include the original policy copy, claim form, air-tickets or trip tickets, correspondence with airport officials for baggage loss/baggage delays, FIR or Report with police authorities for theft and hospital documents in case of reimbursement claims. Moreover, all important documents which help to substantiate a claim must be preserved and presented properly at the time of claims.

Needless to mention, fraudulent or false claims must be avoided under all circumstances as otherwise not only will the claim be rejected, but the policy would also be cancelled forthwith and the customer blacklisted.

There are well-established grievance-redressal mechanisms in case of disputes with the insurer. However, it would be advisable to read the “fine print” of the policy one is opting for up-front and to clarify all doubts in advance, so that lengthy and protracted procedures subsequently are not at all required.

Insurance Regulatory Development Authority of India(IRDAI) and travel policies

IRDAI has recently given relief to travel insurance customers vide circular number IRDAI/INSP/CIR/MISC/077/03/2020 dated 30^th March 2020. The circular states, “In case insurers have issued travel insurance policies which were/are valid between 22nd March 2020 and 30th April 2020, an option may be provided to the policyholders to defer the date of travel without any additional charge.”  This directive offers much needed relief to customers who have been compelled to postpone their trips because of the government imposed lock-down to avoid incurring cancellation charges for their travel policies.

In my opinion, this sector needs more attention from the Regulator. In line with standard health policies, there are many areas which could do with a relook. Customers are often confused with the variety of different products from various insurers with varying terms and conditions.  The introduction of one universal travel policy with similar coverages and exclusions across all insurers, such as Arogya Sanjeevani in Health Insurance, would be of immense help to customers [31]. Common definitions for different coverages such as Trip Cancellation Cover is also required urgently. Incorporation of coverage for pre-existing diseases by all insurers, would also be a welcome addition to travel policies.

Conclusion

One hopes that the Covid-19 threat soon stops looming over the travel horizon and the travel sector which is practically at a standstill, improves once again. The need of the hour is that insurers come out with more innovative and affordable travel products. Some combined domestic and overseas travel covers, global health insurance policies and low–cost policies for the customer to utilize, with the encouragement and under the supervision of a vigilant Regulator will transform this field appreciably. The American travel blogger and New York Times bestselling author Nomadic Matt says “travel safe, travel far, travel wide and travel often”. I would like to add that it would be advisable to do all this but with a good travel insurance policy packed with your luggage.