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.
Planning a trip and unsure about travel insurance premiums? Many travellers face confusion when navigating the myriad of providers, policies, and prices for their upcoming journeys. With so many options available, it can be overwhelming to determine which insurance plan offers the best protection at a reasonable cost.
We get it—determining which provider offers a fair deal at a reasonable price can be daunting. In this comprehensive guide, we'll explain why some travel insurance products are more expensive than others, shedding light on the factors that contribute to these price differences. We’ll delve into crucial elements like age, pre-existing medical conditions, and why buying insurance closer to your departure date can reduce the premium, but leave your holiday exposed. Additionally, we'll explore how the length of your trip, the destinations you are visiting, and the types of activities you plan to engage in can further impact the premiums you pay.
By the end of this guide, you should feel more confident in your ability to choose the right travel insurance, so you can travel with peace of mind, knowing you are adequately protected.
Travel Insurance Premiums
When planning a holiday, most people focus on the exciting destinations and activities they will experience. The thrill of exploring a new city, tasting different cuisines, or embarking on an adventurous trek, often takes centre stage in our minds. However, it is equally important to consider those unexpected events that may occur while travelling. This is where travel insurance comes in.
Although some may hesitate to purchase travel insurance, as it's another expense, it is important to understand the benefits of such protection. Travel insurance can provide peace of mind in case of unexpected cancellations, flight delays, lost luggage, or medical emergencies while abroad. For instance, imagine the inconvenience of losing your passport or having your flight cancelled at the last minute. Travel insurance can help mitigate these stressful situations by offering financial compensation and logistical support.
In short, investing in travel insurance is a smart decision that can protect your well-being and finances during your trip.
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The Key Factors That Determine Your Travel Insurance Premium
When buying travel insurance, one of the key factors to consider is the premium or the cost of the policy. Several elements influence your premium, including age, pre-existing medical conditions, and the trip’s duration. These factors impact your risk level as a traveller, and insurers consider them when determining premiums.
Age of Traveller
Age is a significant factor that can determine how much you pay for your travel insurance policy, as insurance providers use age as a key consideration when calculating the cost of protection. This is primarily because younger travellers are often seen as less of a risk to insure, given the lower likelihood of them encountering medical issues or requiring medical assistance while abroad.
Conversely, older travellers may be seen as more likely to need medical attention or face health-related emergencies during their trips, which leads insurance companies to charge higher premiums to offset the potential costs and balance their risk exposure.
As a result, premiums tend to increase as the traveller gets older. This incremental rise can significantly impact the overall cost of travel, especially for those who travel frequently or plan extended trips. The higher insurance costs can sometimes make travel prohibitively expensive for older individuals, thereby limiting their travel options.
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 right protection at the best price. Comparing policies not only helps you find affordable premiums but also ensures you have comprehensive cover that meets your specific needs, such as cover for pre-existing conditions or additional cover for activities like winter sports. Taking the time to read reviews and seek recommendations can also provide valuable insights into the customer service and claims process of various insurers, helping you make a more informed decision.
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 or are currently under control. This includes conditions such as diabetes, high blood pressure, previous surgeries, or any chronic illnesses.
Failure to disclose pre-existing conditions could result in denied claims, or the insurer voiding your policy, leaving you to foot the bill for any unexpected medical costs and emotional stress during an already difficult time. Imagine being faced with a medical emergency, only to find out that your insurance claim has been denied because you did not disclose a condition you thought was insignificant. Therefore, 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 each month, should you then need to make a claim and it be declined, you could be out of pocket for a lot more than what you have saved. Medical treatments and hospital stays can be exorbitantly expensive, and without proper protection, you might face financial ruin. Is it worth the risk?
Remember, honesty is the best policy when it comes to purchasing insurance. Always provide complete and accurate information to your insurer and review your policy documents carefully to understand what is covered and what is not. This proactive approach will help ensure that you are adequately protected and can rely on your insurance when you need it the most.
READ MORE: What Do I Need to Declare on my Travel Insurance?
Destination
When purchasing travel insurance, the destination you are travelling to can have a significant impact on the premium of your policy. 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. For example, countries experiencing ongoing conflicts or high levels of terrorist activity are often excluded from standard travel insurance policies. This is because the likelihood of a claim increases significantly in these regions, making it financially unviable for insurers to provide cover. Additionally, the Foreign Commonwealth & Development Office (FCDO) may have deemed these destinations as unsafe - most insurers will exclude cover for any trips that the FCDO has deemed unsafe.
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. For instance, a traveller with a chronic illness may find that their insurance costs increase substantially when travelling to a country where healthcare is not publicly funded, as the insurer must factor in the high cost of private medical care, should their condition deteriorate.
Typically, European destinations generate cheaper travel insurance premiums compared to the rest of the world. This is because countries in Europe are closer geographically to the UK, so flights and travel costs are usually 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.
Moreover, the European Union has agreements in place, such as the Global Health Insurance Card (GHIC)/European Health Insurance Card (EHIC), which can help cover some medical costs for travellers, further reducing the potential expenses for insurers.
READ MORE: GHIC, EHIC & Travel Insurance
Depending on your pre-existing medical conditions, providers take potential costs for treating your conditions whilst abroad into account, 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 than in 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. For instance, an emergency could lead to immediate admission to a private hospital where costs can be significantly higher.
USA, Canada, the Caribbean, China, and Hong Kong
One of the reasons why travel insurance can be costly in these destinations is due to the potential risk of claiming to receive expensive medical treatment, especially for those with pre-existing medical conditions. The USA, in particular, is notorious for its expensive medical bills, which can easily run into tens or even hundreds of thousands of dollars for treatments.
Although medical services in the Caribbean Islands may be cheaper, there is a strong possibility you could 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. For example, a medical evacuation from the Caribbean to the USA for a serious condition could cost tens of thousands of dollars, all of which would need to be covered by your insurance policy.
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. For example, while you might be able to get emergency treatment at a reduced cost, regular medications or elective procedures would still require comprehensive travel insurance to be fully covered.
Understanding these nuances and details is crucial when selecting travel insurance, as it ensures you are adequately covered for the specific risks associated with your destination.
Trip Duration
The length of your trip is a crucial factor when purchasing travel insurance. Most insurers offer policies for trips ranging from a few days up to a year, with options for longer journeys also available in some cases.
Shorter trips are cheaper to insure, as the risk of claims is lower compared to longer trips. This is due to the reduced period for unforeseen events or incidents to occur. Additionally, some insurers may impose specific restrictions on trip duration, such as not covering claims after a certain number of days or excluding cover altogether beyond a particular period.
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 Multi-Trip policy. A Single Trip policy covers a specific trip, while an Annual Multi-Trip policy covers multiple trips taken within a calendar year. This choice is crucial as it can impact both your protection and your budget, depending on your travel habits.
The choice between these two types of policies depends on how often you travel, the length of your trips, and the destinations you plan to visit.
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 holiday you take. This means that 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. This can be particularly beneficial for travellers who do not travel often or who plan trips spontaneously, allowing them to tailor their protection specifically for each journey.
Annual Multi-Trip
If you travel frequently, an annual multi-trip 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. An Annual Multi-Trip policy is ideal for those who travel multiple times a year, ensuring they are always covered without the need to purchase a new policy for each trip.
Typically, Annual Multi-Trip travel insurance policy providers, operate their location options in tiers, which are as follows:
Tier 1: Europe Only: Provides cover for most European countries, including the UK. This tier is often the most affordable and is suitable for travellers who primarily visit European destinations.
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. It is a good choice for those who travel internationally but do not intend to visit the excluded countries.
Tier 3: Worldwide (Including USA, Canada, Caribbean, and Mexico): These policies can be quite pricey and include all the countries noted in Tiers 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. This tier offers the most comprehensive protection, ensuring you are protected no matter where your travels take you.
Be sure 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 tier 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 then 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 Muli-Trip travel insurance depends on your individual travel needs and budget. It is important to carefully consider your holiday plans and compare policies to find the cover that best suits you. Always take the time to evaluate factors such as the frequency of your travels and the destinations you visit, and to ensure you select the most appropriate policy.
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 you need.
For Single Trip policies, the cancellation benefit starts from the day of purchase. This means that the earlier you purchase the policy, the longer the cancellation cover is needed. When you buy travel insurance well in advance of your trip, the insurance company must provide cover for a longer period, which increases the potential risk they are covering. Consequently, this results in higher premiums.
On the other hand, when you buy travel insurance closer to your departure date, the likelihood of needing to cancel your holiday due to unforeseen circumstances decreases. With fewer days at risk, the amount of cover needed for potential cancellation decreases, and so does the premium. This reduction happens because the insurance company is covering a shorter period, reducing their risk exposure.
While this fluctuation in premium costs isn't a reason to delay buying your insurance, it's important to be aware of these dynamics. There could be an unforeseen circumstance that necessitates the cancellation of your holiday. Without the appropriate cover in place from the moment you booked your holiday, you wouldn't be able to claim any benefits.
READ MORE: When to Buy Travel Insurance
In conclusion, both Single Trip and Annual Multi-Trip travel insurance policies offer unique benefits depending on your specific travel needs. Purchasing in advance can help reduce premium costs but be aware of how this affects the cancellation cover provided.
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Policy Excesses
One other factor to consider when purchasing travel insurance is the policy excess. The excess is the amount that you, as the policyholder, are required to pay towards any claim you make on your policy. For example, if your claim is for £500 and your policy has an excess of £100, the insurance company will only pay out £400.
While higher excesses can help reduce premium costs, it's important to choose a level that you can comfortably afford in the event of a claim. A high excess may mean more affordable premiums but could potentially lead to financial strain if you do need to make a claim.
It's also worth noting that different types of claims may have varying excess amounts. For example, medical expenses and cancellation cover could have different excess amounts. It's essential to read the policy details carefully to understand what you are covered for and what excess amount applies to each type of claim.
Additionally, some travel insurance providers do offer Excess Waivers, meaning that there are no excesses to pay, should you need to make a claim. However, an excess waiver may result in higher policy premiums.
READ MORE: Travel Insurance Excesses
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. These benefits ensure that, regardless of the mishap, you will have support and financial backing to mitigate inconveniences and losses.
However, should you find yourself heading off on a cruise, or heading down the slopes for some winter fun, you will need to add 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. Without these additional benefits, any claims resulting from specific incidents related to these activities would be denied, leaving you to bear the full cost.
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, in the hope of saving ourselves a few pounds. The risk of travelling abroad uninsured outweighs the potential costs we could incur from an unforeseen incident, such as medical emergencies, trip cancellations or lost luggage.
When an unexpected event occurs, having travel insurance can provide crucial support and financial protection, ensuring that you receive the necessary help without bearing the full burden of the expenses. Before you take your next trip, remember to invest in travel insurance for peace of mind and worry-free holidays.
Frequently Asked Questions
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!
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.