As the festive season approaches, so do travel plans! Whether you're heading to your native town or planning a trip abroad, the excitement is undeniable. Traveling to new destinations is always an adventure, offering new experiences and opportunities. However, it’s important to be prepared, as unexpected mishaps can happen along the way.
That’s why having a backup plan, like travel insurance, is invaluable. So, while booking your travels tickets and accommodation, don’t forget to include travel insurance for a worry-free journey. Understanding the purpose of travel insurance, why it’s essential, and what it covers will help you travel with peace of mind.
What is Travel Insurance?
Travel insurance is a financial safety net designed to protect travellers from unforeseen events that may disrupt their journey. It covers a wide range of situations, from medical emergencies to trip cancellations, ensuring peace of mind while you explore.
Why is Travel Insurance needed?
1.Trip Cancellations and Interruptions
Life happens, and sometimes, you need to cancel or cut your trip short. Whether it’s due to an unexpected illness, a family emergency, or something as simple as a last-minute work commitment, travel insurance can help you recover the non-refundable costs of your trip. This includes flight tickets, hotel bookings, and other travel expenses that would otherwise be lost.
2.Lost or Delayed Luggage
Lost luggage isn’t just a concern when flying internationally—it can happen on domestic flights too. If your baggage is delayed or lost, travel insurance can help you replace essential items and minimize the inconvenience.
3.Travel Delays
In case of delays due to weather, technical issues, or other circumstances, travel insurance can cover additional costs, such as hotel stays, meals, or transport, making sure that your trip isn’t derailed.
4.Missed Connections
Connecting flights and layovers are prone to delays, which can disrupt your schedule. So, Travel insurance covers additional costs, such as meals, accommodation, and transportation, if your travel is delayed or you miss a connection.
5.Protection Against Natural Disasters
During your trip, you could encounter disruptions caused by natural disasters like floods, wildfires, or hurricanes. If your travel plans are affected, travel insurance ensures that you won’t bear the financial burden of cancelling or rescheduling your trip.
6.Accidental Death and Dismemberment
Financial compensation in the unfortunate event of accidental death or severe injury during the trip.
Which travel insurance product to choose?
With a variety of travel insurance products available in India, selecting the right one can be a challenge. The Insurance Regulatory and Development Authority of India (IRDAI) has designed a standard travel insurance product with uniform coverage features, addressing common traveller needs. These products are compared across several factors, such as:
- Mode of Travel: Whether you're traveling by taxi, bus, train, air, ship, or using multiple modes of transport.
- Distance Covered: Some policies restrict travel to specific distances, while others are more flexible, covering journeys from one place of origin to the destination.
- Tenure: Policies can be for the duration of the journey or a domestic trip, usually with a maximum of 30 days.
When choosing the right insurance product, key considerations include:
- Understanding Policy Options: Familiarizing yourself with the various policies and selecting the one that best meets your travel needs.
- Evaluating Coverage Limits: : Ensuring the coverage aligns with potential expenses during your trip, offering sufficient financial protection.
- Comparing Insurance Providers: Thoroughly comparing providers based on their reputation, customer feedback, and the ease of their claim process.
- Reading Policy Details: Carefully reviewing the fine print, including exclusions, deductibles, and claim procedures to avoid unexpected issues.
Did You Know?
The adoption of travel insurance has seen a significant rise in recent years, driven by growing awareness among travellers. The data highlights a consistent increase in the number of people insured both domestically and internationally, with the exception of 2020-21, which was impacted by the pandemic. However, as restrictions eased in 2021-22, there was a noticeable recovery in the number of insured travellers. By 2023-24, over 40 million people were covered under domestic travel insurance, while 7.4 million had overseas coverage.
Source: Graph created using data from IRDAI on Number of Lives covered under Travel Insurance
Example: When booking a train ticket through from Indian Railway Catering and Tourism Corporation (IRCTC), travel insurance is offered for a premium of less than 1 rupee, which includes all taxes. This insurance is optional, and if chosen, the premium will cover all passengers listed under a single Passenger Record Number (PNR). The coverage includes compensation for death, permanent total disability (PTD), Permanent Partial Disability (PPD), hospitalization expenses for injuries from a rail accident or untoward incident. The sum insured is as followed, as of February 17, 2024:
| Death | Permanent total Disability | Permanent partial Disability | Hospitalization expenses for injury | Transportation of mortal remains |
|---|---|---|---|---|
| Rs.10,00,000 | Rs.10,00,000 | Rs.7,50,000 | Rs.2,00,000 | Rs.10,000 |
Conclusion:
In today’s unpredictable world, travel insurance is an essential safeguard for both international and domestic travel. With the growing number of insured travellers both domestically and internationally, it’s clear that more people are recognizing the importance of protecting themselves against the unforeseen. From medical emergencies and trip cancellations to lost baggage and travel delays, travel insurance offers peace of mind, ensuring that your trip remains as stress-free and enjoyable as possible.
Source:
irdai.gov.inInsuranceTermCondition
About MicroInsurance Innovation Hub Foundation
The Microinsurance Innovation Hub aims to revolutionize the MicroInsurance segment, especially in India and the Asia Pacific region. Based in Hyderabad, it focuses on developing inclusive insurance solutions tailored to underserved populations. By exploring product, technological, and process requirements, the hub supports interested companies in penetrating this market segment. With a mission to serve the underprivileged, it strives to enhance insurance penetration and foster inclusive growth.
The Hub would work to support the development of micro insurance in the Indian insurance industry through exploring various aspects of this business, the product range, the technological requirements, the process requirements, and the type of people required to enhance penetration. For more information visit us at https://microinsuranceinnovation.com/
Disclaimer:
The Microinsurance Innovation Hub is a Section 8 company and has members who intend to foster financial inclusion of underserved and unserved communities through providing Insurance. The innovation hub will act as an open platform to the stakeholders of microinsurance. This Hub will exclusively work in the Microinsurance / Inclusive Insurance space in India and other regions. The information provided here is gathered from various sources and Microinsurance Innovation Hub doesn’t validate any data. The information here are intended solely for internal discussion purposes.