Tommy Lloyd
Author: Tommy Lloyd, Managing Director

Tommy has over 15 years experience within the insurance industry, and his primary focus is helping travellers find the right cover for their medical conditions.

Originally posted: 13th Jun 2023

Are you about to travel and need insurance, but do not know what the premiums will be? Many travellers have felt overwhelmed by the range of available providers, policies and prices when researching cover for their upcoming trip.

We understand that it can be confusing trying to determine which provider offers a fair deal at a reasonable price. In this guide, we break down why some travel insurance products are costlier than others. Specifically, we explore factors such as age, pre-existing medical conditions, and how purchasing closer to your departure date may impact how much you would be expected to pay for your travel insurance policy.

Read on to gain an insight into why certain people face higher costs and learn how to get yourself the best possible deal.

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Travel Insurance Premiums

When planning a trip, most people focus on the exciting destinations and activities they will experience. However, it is equally as important to consider those unexpected events that may occur while travelling. This is where travel insurance comes in.

Although some may hesitate due to the premium costs, it is important to understand the benefits of such cover. Travel insurance can provide peace of mind in case of unexpected cancellations, flight delays, lost luggage, or medical emergencies while abroad. It can also offer valuable assistance with travel-related issues, such as language barriers and legal assistance.

In short, investing in travel insurance is a smart decision that can protect your well-being and finances during your trip.

The Key Factors That Determine Your Travel Insurance Premium

When purchasing travel insurance, one of the most crucial factors to consider is the premium, which is the cost of the policy. Many factors can impact the premium you pay for travel insurance, including age, pre-existing medical conditions, and the duration of the trip. These factors can affect your risk level as a traveller, and insurers take them into account when calculating premiums.

Age of Traveller

Age is a significant factor that can determine how much you pay for travel insurance premiums as insurance providers use age as a key consideration when calculating the cost of cover. This is because younger travellers are often seen as less of a risk to insure, whereas older travellers may require more medical assistance while abroad.

As a result, premiums tend to increase as the traveller gets older. This can impact the cost of travel significantly, especially for those travelling frequently. Therefore, before booking a trip, it is always wise to research different insurance providers and policy options carefully and thoroughly, to ensure that you are getting the best cover at the best price.

Pre-Existing Medical Conditions

When purchasing an insurance policy, it is crucial to be honest about any pre-existing medical conditions you may have. Disclosing this information could mean a higher premium cost, but it is a small price to pay for the peace of mind of knowing you are fully covered.

In most cases, you will be asked to disclose your medical conditions, even if they have been treated. This is because failure to disclose pre-existing conditions could result in denied claims, leaving you with unexpected medical costs and emotional stress. It is always better to be transparent with your insurer so they can tailor your policy to your specific needs and ensure you are protected.

Whilst not declaring your conditions would reduce your policy premium, saving you a few pounds – but should you then need to make a claim and it is declined, you could be out of pocket for a lot more than what you have saved. Is the risk worth it? Remember, honesty is the best policy when it comes to purchasing insurance.

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When purchasing travel insurance, the destination you are travelling to can have a significant impact on the premium of your travel insurance. This is because some destinations are considered higher risk than others, based on factors such as political instability, crime rates, and privatised healthcare costs. Insurers, in general, will not provide cover to locations that are deemed “unsafe” due to things like war or terrorism.

Destinations with privatised healthcare may result in higher premiums to account for the potentially expensive medical treatments that could be required during your visit. Additionally, if you have a pre-existing medical condition, the premium will be elevated, to cover you for any treatment you need whilst abroad, that’s linked to the condition.

Typically, the UK and European destinations generate cheaper travel insurance premiums compared to the rest of the world. This is because the countries in Europe are closer to the UK, so often flights and travel costs are lower. If you need to claim for cancellation, for example, it will be a lesser amount than if you’re cancelling a flight to Australia, and so providers charge less. 

Depending on your pre-existing medical conditions, providers take potential costs for treating your conditions whilst abroad, so you may find some countries may be more expensive than others. In particular:

  • Spain, Canary Islands, Balearic Islands, Malta, Greece, Cyprus
    These areas operate a high level of privatised healthcare so travel insurance tends to cost more to cover pre-existing medical conditions than other areas of Europe. That’s not to say you will not be able to access NHS equivalent treatment in these places, but if it’s an emergency, you may not be given the choice.
  • USA, Canada, the Caribbean, China and Hong Kong
    One of the reasons why travel insurance can be costly is all to do with the potential risk of claiming to receive expensive medical treatment, whilst at these locations, especially for those with pre-existing medical conditions.

    The USA is notorious for its expensive medical bills. And although medical services in the Caribbean Islands may be cheaper, there is a strong possibility you will be flown to the USA should you become unwell and require advanced treatment. Additionally, repatriation back to the UK is extremely costly from these areas which also contributes to the higher insurance premiums.
  • Australia
    You will be pleased to learn that a reciprocal healthcare agreement exists between Australia and the UK. This entitles British Citizens travelling on a UK passport to subsidised medical treatment from Medicare Australia.

    However, it doesn’t cover non-urgent treatment or pre-existing medical conditions, which is why having adequate travel insurance in place when travelling to Australia is important.

Single Trip or Annual Travel Insurance Policies

When purchasing travel insurance, one of the key decisions you will need to make is whether to choose a Single Trip policy or an Annual policy. A Single Trip policy provides cover for a specific trip, while an Annual policy, provides cover for multiple trips taken within a given period, typically a year.

The choice between these two types of policies depends on how often you travel and the length of your trips.

  1. Single Trip
    Whilst potentially the cheaper option, single trip policies will only cover you for a specific holiday. These policies come into force the day you purchase (providing cancellation cover in the run-up to your trip). You are then covered for everything else included within the policy, from the moment you leave your home to start your holiday. The policy ends the moment you return home.

    With Single Trip policies, you need to buy travel insurance for each trip you take. Meaning, if you only take one or two trips per year, a Single Trip policy may be more cost-effective, as you only pay for the policies you need.

    One thing to remember is, to ensure you are covered correctly when heading off on a cruise, you need to make sure that you list all the countries you will be stopping at when obtaining travel insurance quotes for a Single Trip policy.
  2. Annual
    If you travel frequently, an annual policy may be the better option, as it provides cover for all your trips in one cost-effective package, providing of course, the policy covers all the destinations you are visiting. Typically, Annual travel insurance policies providers, operate their location options in tiers, which are as follows:
  • Tier 1: Europe Only: Provides cover for the majority of European countries, including the UK.

  • Tier 2: Worldwide (Excluding USA, Canada, Caribbean and Mexico): This type of policy will cover most of the world, (including the countries listed in Tier 1). This policy excludes the USA, Canada, the Caribbean and Mexico, helping to keep the premiums down.

  • Tier 3: Worldwide (Including USA, Canada, Caribbean and Mexico): These policies can be quite pricey and includes all the countries noted in Tier 1 and 2. If you are travelling to the countries that are included within the range frequently, it can be more cost-effective overall, when compared to purchasing Single Trip policies for each trip.

Do ensure to check the countries covered, regardless of which Annual policy you decide on, as the countries can vary depending on the provider. All this information can be found in the policy documentation.

For annual policies, you are not required to inform the provider of your travel plans – you only need to make sure that you have selected the right level of destinations you plan to visit. You do, however, need to inform them if your circumstances change (new medical conditions, or if you plan to head to a country not covered in your existing policy etc.).

This could raise the premium; however, you need to do this, otherwise any claims you may need to make, could be declined.

The choice between Single Trip and Annual travel insurance depends on your individual travel needs and budget. It is important to carefully consider your needs and compare policies to find the cover that best suits you.

Purchasing In Advance

Purchasing travel insurance in advance is always a smart decision, but have you ever noticed that the premiums for a single trip policy can vary from one day to the next? Well, the reason for this fluctuation is the amount of cancellation cover needed.

The cancellation benefit starts from the day of purchase. Meaning the more in-advanced you purchase the policy, the longer the cancellation cover is needed. When you buy travel insurance closer to your trip, the likelihood of cancelling your holiday due to unforeseen circumstances decreases, which as a result, the amount of cover needed for a potential cancellation, decreases, and so does the premium.

Whilst this is not a reason to hold off from buying your insurance in advance, there very well could be an unforeseen circumstance that may result in you needing to cancel your holiday, but without the cover in place to begin with, you would not be able to claim.

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Benefits and Cover

It can be tempting to choose the cheapest policy available to save money. However, it is important to remember that the cheapest policy may not necessarily be the best option for you.

While cost is a key factor to consider, it should not be the only one. It is crucial to choose a policy that meets your specific needs and has the right cover in place. It is worth investing in a policy that provides the cover you need rather than risking being underinsured in case of an emergency.

One thing to keep in mind is that a good policy should include benefits such as trip cancellation, emergency medical and repatriation, lost or stolen baggage cover, and 24/7 assistance services. With these benefits and covers, you can travel with peace of mind knowing that you are adequately protected.

However, should you find yourself heading off on a cruise, or heading down the slopes for some winter fun, you will need to add in optional extra covers to your policy when obtaining your insurance quotes. Usually, Cruise and Winter Sports are excluded from travel insurance policies as standard, meaning you need to opt-in for these covers.

Adding either or both covers to your policy will drive up the price, but without the cover, claims caused by an accident whilst skiing, or if you were confined to your cabin whilst on a cruise, would not be covered.

It is essential to read your policy documents carefully to understand what is covered and what is excluded to ensure you have the right protection for you and your trip

As with all insurance policies, there isn’t too much we can do to help keep the costs down. However, travel insurance should not be overlooked, just to try and save ourselves a few pounds.

The risk of travelling abroad uninsured clearly outweighs the potential costs we could incur from an unforeseen incident.  So, before you take your next trip, remember to invest in travel insurance for peace of mind and worry-free holidays.

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Frequently Asked Questions

You will need to add each country that you are visiting. If you are on a flight stopover this will include any countries where you leave the airport. If you are on a cruise it includes any countries where your ship will be docking at.

Single trip cover usually can cover you for up to 45 days, but a few providers may be able to cover you for up to 94 days. If you are getting annual trip cover, there will be a maximum number of days that you are covered for any one trip, but we'll let you know what this is for your quote!

Cancellation amounts will be per person. So, if you were going on a trip for 2 people which cost £1,000 in total you would ideally need cancellation cover for at least £500.

If you don't travel much then a single trip cover is perfect as you can cover specific dates suited to your trip. If you have cancellation cover, you'll also benefit from this as soon as you buy your policy.

If you travel 2 or more times a year, it may be cheaper for you to go for an annual multi-trip cover. It's best to start your annual trip cover as soon as possible, as if you have cancellation cover, you'll only benefit from this from your policy start date.

You can send your question to our team, or visit our help centre on Policy Premiums.

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