The Truth About Annual Travel Insurance — Is It Worth the Cost?

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Suppose you’re a frequent domestic or international traveler. In that case, you may wonder if an annual travel insurance plan is a smart idea to keep a vacation from becoming a financial catastrophe.

Like almost everything else, travel costs have gotten more expensive over the past few years. This, combined with increased weather events, staffing issues and other snafus, has led to more flight delays and general airport chaos. With all of that in mind, it begs the question — is travel insurance worth it?

How Much Is Travel Insurance?

If you take a lot of business trips or are jet-set to vacation destinations, purchasing travel insurance may be a good money move. Though prices will vary, when it comes to additional coverage limits for medical emergencies, lost luggage and more, a comprehensive travel insurance plan could be a good investment to protect the bottom line of your total trip cost. Here are some key considerations: 

• Nationwide, Allianz Travel and IMG are good examples of popular annual travel insurance providers. 
• Depending on the coverage, some annual plans can be expensive. An annual plan, which covers multiple trips within a year, can range between $125 and $700. Variables that can affect the price include age, number of trips and the duration of your trips. 
• The average cost of buying travel insurance is about $220 a year.
• Some types of coverage — such as plans that include pre-existing medical conditions, medical evacuations or trip interruption coverage — aren’t worth much if your limits are too low, so keep in mind you can customize your plan for different needs on different trips.

The Ins and Outs of Travel Insurance

Unlike a standalone travel policy, which covers you for a single trip, annual travel insurance typically covers an unlimited amount of trips throughout the year. It protects you from unexpected travel delays, canceled flights or lost baggage. It includes aspects like:

• Health insurance: Your policy may cover your medical bills and other health expenses if you get injured or sick while traveling.
• Baggage insurance: If your baggage is lost or delayed during your trip, your policy may cover the cost of replacing your items.
• Trip interruption: If something happens during your trip and you unexpectedly need to change your plans, your policy may cover the cost to do so.
• Trip cancellation: Life happens, and if you unexpectedly need to cancel your trip, your travel insurance policy may cover the cancellation cost. Keep in mind, however, that many annual plans don’t offer this coverage. 

Again, there are many different policy options with different tiers of coverage. The more coverage your policy has, the more expensive it will be.

Standalone Travel Insurance vs. Annual Travel Insurance 

There are two main types of travel insurance — single-trip and multi-trip, known as annual travel insurance. As the name suggests, annual travel insurance covers all your trips in one year (unless the policy expires or you reach the maximum payout). 

Most policies cover trips you take that are a certain amount of miles from your home (like 100 miles or more). On the other hand, single-trip travel insurance policies are purchased for each trip, covering you from the start to the end of your journey.

annual travel insurance focuses more on providing medical coverage while traveling. This includes covering medical bills, medication, hospitalization, emergency transport and more. 

Single-trip plans typically have more comprehensive coverage than annual plans. Most annual travel insurance plans won’t include baggage loss or rental car coverage. Some may also not cover trip cancellations or may charge you extra for that coverage. 

Benefits and Drawbacks of Annual Travel Insurance 

Some of the benefits of getting an annual travel insurance policy include:

• Cost-effective: If you travel multiple times in one year, purchasing an annual plan over several individual travel insurance policies is often cheaper.  
• More straightforward: You essentially need to buy the policy once and get peace of mind knowing you have coverage for an entire year — no matter where you go. You also typically don’t need to have all of your trips booked before purchasing a policy. 

But there are some drawbacks to keep in mind, including:

• Limitations: Many annual travel insurance plans will have restrictions on what’s covered. Most don’t cover trip cancellations or trip interruptions. 
• Expensive upfront cost: While an annual policy may be cheaper than purchasing a bunch of single policies, you must shell out a higher upfront payment at the beginning of the year.

Final Take To GO: Should You Get Annual Travel Insurance?

When deciding what type of travel insurance to get, you’ll want to consider how often you travel and your trips. It also matters if you regularly travel out of the country (where your U.S. health insurance policy won’t cover you). Single-trip travel insurance is often better for those who are only taking a few trips in a year or are going on a short journey.

However, if you’re planning multiple trips in one year, getting an annual travel insurance policy may be a good idea, as it offers continuous coverage without the hassle of purchasing separate policies each time. Simply put, if you’re someone who travels many times a year, it’s likely a good investment due to the convenience and potential cost savings compared to buying separate policies for each trip.

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