Travel Insurance Hack

Updated: Feb 12

What is the biggest worry when travelling?

What would be something that you think could happen to you and cost a lot of money, when it happens during your travel? The following three events commonly occur to people when they fly to another country for vacation.

1. Flight delays more than six hours

Flight delay during your trip is a very common event. A flight delay of a few hours is inconvenient, but the world does not end there. You can still enjoy your vacation. If a flight is delayed more than six hours, then very often a lot of additional costs emerge. You will miss your connecting flight. You have to stay for one more night in a foreign country without any hotel bookings. Many things that you did not plan for and cost extra money. If your flight is cancelled or delayed overnight and you need to spend another unplanned night. Thus, flight delay is the number one protection we are looking for when it comes to choosing a travel insurance.

2. Luggage is delayed or lost

You arrive at your vacation destination, and your luggage is missing. Your warm jacket on your winter trip to Scandinavia is in the bags, and now you are freezing outside in Oslo. Your business suit or dress for the meeting is missing. If your checked-in luggage is missing for more than a day, you most likely will need to buy extra clothes, toothbrush, soap and many more things to enjoy your vacation still. You do not waste time waiting in your hotel room for your luggage to arrive. You want to make the most of the limited time you have to enjoy your vacation. A lot of money that you might not have or planned to use for tours, food, etc. instead of clothing. Thus, luggage delay is the second important protection we are looking for when it comes to choosing a travel insurance.

3. You get sick or meet with an accident during your vacation

Another worry, when travelling in countries where the living costs are much higher than Malaysia is Medical Expenses. You like to eat out and adventure on a food journey. Then food poising is no stranger to you. If you get sick on your vacation, you might not be able to wait until you get home to see a doctor. Then going to the doctor or the hospital abroad is not cheap. The low ringgit and the high exchange rate makes a doctor or hospital visits in developed countries like Japan, Korea, Australia or the US cost a fortune. The worst part is if you have an accident or need to get admitted to the hospital. Then the cost can go quickly into the hundred thousands of ringgit. Thus, Medical Expenses is the third most crucial protection when we look for in Travel Insurance.

But, what about all the rest like Personal Accident, Permanent Disablement, Hospital Income, Funeral Expenses and more, especially Personal Accident?

Is Personal Accident Benefit of Travel Insurance Important?

Many insurance companies especially highlight the Personal Accident Benefit of Travel Insurance. This means that if you die during an accident, then your surviving loved ones will get the lump sum insured amount. However, covering for your death using Travel Insurance is a terrible choice. If you do want to have money for your loved ones, you should have protection not only during your vacation. YOU WANT TO HAVE PROTECTION ALL THE TIME. It just does not make sense to insure yourself for accidental death only for vacation. Out of 365 days a year, how many days are you on vacation? Why do you think that you will only have an accident during your vacation?

Mix-up between Travel Insurance and Life Insurance

If you worry about your death and want to make sure that your parents, spouse and children have enough money when you die, then get Life Insurance or buy Personal Accident Insurance, at least, is the better choice. The protection is then not only for the trip but for a whole year or longer. This is the main reason why we do not consider the sum insured for Personal Accident as essential. When we buy Travel Insurance, we only want to look at the things we want to protect ourselves from during the vacation. Death from an accident is not one of them, because we want to be protected against accidents all the time. Not only on holidays. However, you have got no choice because it is bundled together in the travel insurance.

Selection Criteria for Travel Insurance (just our two cents worth): Flight delays, Luggage delays and Medical Expenses.

How much protection do we need?

Next, we need to look at how much protection do we need for those three things that are important in selecting a Travel Insurance.

1. Flight delays more than six hours

Insurance companies offer a fixed amount after a set number of hours of flight delay. For example, Insurance A gives RM 200, if your flight is delayed for six hours. If the flight is delayed for another 6 hours, so in total 12 hours, then you get another RM 200. This continues for every 6 hours until a maximum amount of RM 3,600. That is 4 and a half days worth of flight delay. Now, flights usually are not delayed for days, so we do not care much about the maximum payout. What we will be looking at is the amount that is paid after the first 6 hours, because this is most likely to happen.

Selection Criteria: When we look at the amount, we want the highest payout for every 6 hours.

2. Luggage is delayed or lost

We take the same approach as a flight delay. Instead of looking at how much the maximum payout is for delay or lost luggage, we look at the amount that is paid out after 6 hours of luggage delay.

Selection Criteria: We prefer the insurance company that pays the most after 6 hours of luggage delay.

3. You get sick or meet with an accident during your vacation

The most significant difference between insurance companies is medical expenses. The more we need, the more we pay for the Travel Insurance. To find the Best Insurance for you, you need to decide for yourself, what medical expense amount makes sense. We do not have data on the medical expenses in other countries, the best approach is to go with the most popular amount. RM 300,000 is the coverage that most travel insurance provides, so we believe it is a safe choice to say that the insurance we want must provide at least RM 300,000.

Selection Criteria: The medical expenses coverage must be RM 300,000 or higher.

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