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Small-ticket Travel Insurance policy: Should you opt for it?

Priyadarshini Maji
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The UN World Tourism Organisation (UNWTO) said in a report that India by 2020 will account for 50 million outbound tourists. Around a decade back, only 8 million Indians were traveling overseas. Though traveling is fun at the same time, it can become challenging if not planned well. We prepare the tickets, accommodation, transportation, and food ahead of the travel, but most miss out on the insurance. Having an international travel insurance policy ensures that you have a safe and secure trip. They also come with a lot of benefits. From medical expenditure, to trip cancellation or delay and more, Overseas Travel Insurance offers coverage for all so that any unforeseen situation does not ruin your trip. Almost all insurance companies offer domestic and international travel insurance policies.

Along with insurance companies, many start-ups have also started offering small ticket-size travel loans, the price of which are comparatively minimal from other general insurance companies. Recently, Toffee Insurance, a Gurgaon-based all-digital insure-tech startup, introduced International Travel Insurance plans. The premium for the policy is set at Rs 400 for a maximum of 180 days, underwritten by HDFC Ergo. The policy covers medical treatment in case of a personal accident, loss of passport, loss of baggage and more when traveling on a visitor visa.

Experts say, in India, travel insurance remains an under-penetrated segment with only a minority of Indians protecting their travels. This is seen mostly because of the high costs and inconvenience of any disaster, while abroad. Industry experts add, insurance is a necessity, and people traveling abroad should consider it particularly when the losses can stack up to be unaffordable. In case of any health issues or accidents, evacuation from a foreign country cost thousands of US dollars. Even in Asian countries, hospitalization expenses go up to $500 to $1000 a day.

Rohan Kumar, Co-founder and Chief Executive Officer at Toffee Insurance, says People are always surprised to learn how expensive medical care is abroad. For example, a hospital stay in Thailand at a mediocre hospital cost $500 per day. Compare that to the cost of travel insurance, and it’s immediately obvious why a travel cover is essential for foreign travel.

Inclusions in the policy

  • The international travel insurance policy offered by Toffee Insurance is a comprehensive plan applicable to all countries after departure.
  • Emergency medical expenses up to $50,000 are offered which includes inpatient and outpatient expenses, ambulance, tests, prescription drugs, doctor fees, medical evacuation, and repatriation.
  • Expenses for check-in baggage loss up to $1,000 or delay up to $100 after 12-hour delay, is covered under the policy.
  • Expenses due to flight delay or cancellation for more than 6 hours up to $10 per hour for up to 12 hours is also covered under the policy.
  • In the event of hospitalization for more than 5 days, which leads you to miss your return flight hotel accommodations up to $3000 is covered under the policy until a return flight becomes available.
  • Expenses due to loss or theft of passport and IDs of up to $250.

Exclusions in the policy

  • Any pre-existing conditions, will not be covered under the cover. Treatment for any medical issue that you had prior to the departure date will be excluded.
  • The age eligibility for this policy has been set between 1 year to 70 years. Any individual below 1 year and above 70 years will not be eligible for this travel insurance.
  • If you get into any accidents due to taking part in hazardous sports and activities, the policy will stand void. Hazardous sports and activities include aviation, scuba diving, bungee jumping, parachuting, racing, diving, rock or mountain climbing, parasailing, hang-gliding, off-piste skiing, naval, military or air force operations.
  • Policyholders will also have to pay a small amount out-of-pocket (deductible), for each claim related to medical, dental, baggage loss or delay, loss of personal documents or personal liability.
  • Accidents under the effects of intoxicants or hallucinogens will not be covered.
  • In case of theft, loss or damage of personal possessions is not covered.

Should you opt for it?

These insurance policies are specially targeted towards millennials. First-time buyers or people who do not have insurance can start with these type of policies. Industry experts say especially here in India, there is a large segment that does not have any insurance cover. With such small-ticket size insurance cover, one gets introduced to a product, before opting for a full-fledged cover.

However, because of the lesser premium, the coverage of these policies is also low and might not be adequate in certain situations. For instance, this international travel plan by Toffee Insurance is suited for individuals and does not really benefit a family. These policies are also not for everyone as people with pre-existing diseases or conditions have a different requirement.