Is annual travel insurance best for older people?
It has become a common belief over recent years that annual travel insurance will save you money if you travel more than a couple of times a year, but this is not always the case, especially for older travellers. or those with existing medical conditions
Although annual travel insurance can save you time, because you don’t need to worry about buying insurance for every trip, it isn’t always the best option for those who are over 65 or who have existing medical conditions
Firstly, annual travel insurance is not suitable for all holidays or trips abroad
Annual travel insurance policies are designed to cover lots of short trips during a 12 month period; they have a limit to the length of time you can be away on any one trip, which is often 31 days but can be less
For those who are retired and want to take full advantage of your free time by taking longer trips to sunnier climes, an annual travel insurance policy may not provide the cover you need
The main purpose of travel insurance cover, whether you choose a single trip or an annual policy, is to protect you against the risk of incurring large medical bills if you fall ill and require medical treatment in a foreign hospital
Therefore the price of a travel insurance policy is based on the likelihood of you needing medical treatment whilst you are away and the potential cost of that treatment
This is much easier for an insurer to calculate for a single trip policy than it is for an annual, which means that the single trip policy could be much better value for money
There are 3 main elements which go in to assessing the likelihood of you needing medical treatment whilst you away and the potential cost of that treatment, which together determines the cost of a travel insurance policy:
1. Your medical history
- Travel insurance acts like private medical insurance for when you are on holiday, therefore both your age and your medical history will have an impact on the cost. This is also why it is important to declare any existing medical conditions to make sure you are fully covered
2. The duration of your trip
- The longer you are away, the greater the risk of you needing some form of medical treatment during your trip
3. Your travel destination
- The cost of medical treatment for British nationals can vary hugely in different countries
- Destinations where health care is more expensive, such as the USA, will be more expensive for travel insurance cover
- Even for countries within Europe the cost of medical treatment can differ hugely, resulting in some European countries being more expensive for travel insurance than others
- When you purchase a single trip policy the insurer will know exactly where you are going and for how long, which means that they can accurately price the policy for you
- With an annual policy this level of accuracy is not possible and can result in you paying a higher premium than if you’d bought single trip insurance for each individual trip
There are 2 main reasons why annual travel insurance can work out more expensive than buying separate single trip policies
1. The insurer doesn’t know where you will be going
- As mentioned above, the main reason for having travel insurance is to cover the cost of medical treatment abroad, which can vary wildly between different countries.
- On an annual policy where you may have to choose between cover for the whole of Europe or the whole of the rest of the world, your policy may be priced as if you were travelling to countries, such as USA or Spain, where medical treatment is more expensive even if you have no intention of going to those countries
2. The insurer doesn’t know how often you will be away or the duration of your trips
- An annual policy will usually cover you for an unlimited number of trips in a twelve month period and although most insurers will specify a maximum trip duration, they will not know how long you are travelling or how often you will be going away
- This means your annual policy could be priced as if you were travelling several times a year for 31 days at time, even if you are only planning 2 or 3 one week breaks
In short, it the this lack of knowledge about your travel plans which means that you could end up paying more than you need to for travel insurance if you choose an annual policy. Single trip travel insurance is specifically tailored for you and your holiday and is therefore much more likely to be competitively priced and better value for money.
Before buying an expensive annual travel insurance policy, why not get some single trip quotes for your planned holidays to see how they compare, you might be surprised.
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Written by Sarah Findlay at Goodtogoinsurance.com, who specialise in providing travel insurance for older travellers and those with medical conditions.
