Travelling enriches your soul and renews your spirit. Finding new places and getting to know new people erases the boredom of life shackled in routines and deadlines. However, vacation — especially an international one — entails huge costs. And to add to it the risks of unforeseen circumstances puts off several vacation plans.
Travel insurance comes in handy when you want peace of mind while visiting a foreign country or a new city, but it inflates your travel costs by at least 4 percent. What most of the travellers don't know is their credit card also offers travel insurance that works as a safety net when something goes awry.
You can easily apply for a credit card online in India and avail complimentary travel insurance facilities. But before you apply, let us talk about what these insurances cover and how it works out best for you.
When do you need travel insurance?
You need not take travel insurance for inexpensive weekend trips. But it is important to safeguard yourself against unforeseen risks when you are in a foreign country or for long trips that entail pricey reservations and hotel stays.
Insurance is made to cover for expenses that you would not be able to bear on your own when things go wrong.
If you take travel insurance on your own, it will add around 4-8 percent extra cost to your vacation budget. It will also vary depending on the length of your trip, travel destination, age, amount of insurance coverage and the medical conditions that you want to be covered.
What does your credit card travel insurance cover?
While a travel insurance makes for a significant part of your travel expenses, your credit card offers complimentary coverage for certain types of contingencies. The only catch here is that you do not have the freedom to select the types of coverage you want; it is offered as a comprehensive package.
Credit card companies also tie up with insurance providers to offer such insurance coverages so the benefits will also differ accordingly.
Most of the credit card providers cover the following:
1. Luggage and Personal Belongings
Your credit card insures you against theft or loss of baggage and personal belongings when you travel abroad. Some might also cover delay in baggage delivery after check-in when the delay is longer than a specific number of hours.
Here you should note that your personal belongings will be insured only up to a certain amount, which will be communicated to you in the beginning. You can also check this in your credit card documents.
For example, if you have an HDFC Regalia Credit Card, you should refer to the booklet provided with the card to know the coverage amount. Alternatively, you can also call on HDFC credit card customer care number to ask about the amount.
2. Trip Cancellation or Delay
If you have to cancel your trip for any of the reasons mentioned in the offer document, your credit card company will refund the prepaid expenses incurred by you on the trip. The reasons for cancellation may include terrorist threat, bad weather and natural disaster.
If your trip could not happen or was interrupted midway, the credit card will cover the non-refundable expenses that you have already incurred. There are a few things you should consider about this coverage"
- Read the fine print to know what reasons for cancellation are eligible for insurance cover. In case you cancel the trip for any reason apart from what was mentioned, the insurance company will not be liable to pay.
- The company is liable to pay only up to the amount that was mentioned in the offer document, so you must consider that.
3. Accidental Death
If the cardholder has an accidental death when on a trip, most credit card travel insurances pay a predetermined sum to the nominees of the deceased. Some banks and credit card providers may also pay a portion of the sum insured in case of dismemberment of a body part.
Whether the plan supports death or dismemberment depends on the type of credit card you have and the facilities offered by the insurance company in association with which the coverage is offered. There are a few points to be remembered in this regard:
- If you already have sufficient life insurance coverage, there is not much need to get this coverage. However, if your credit card offers this benefit, it does not hurt.
- Secondly, you should know the quantum of insurance.
- Understand the reasons of death which are not covered under the scheme. For example, death by heart attack or any other medical issue that the person was already suffering from will not make the company liable to pay.
4. Medical Insurance and Emergency Medical Assistance
If you get sick or are injured on a trip, your credit card covers you for the costs of emergency hospitalisation and medical assistance. Under this coverage, you will be transported to the nearest hospital and the costs of medical procedures and hospital bed charges will be paid for by the insurance company.
Important things to consider about this coverage are:
- Injuries suffered during adventure sports like horse riding, skydiving, skiing, rafting, kayaking, etc. will not be covered under this insurance scheme.
- The policy will cover you only up to a limited amount.
- The medical insurance plan will pay out later; initially, you would have to make the payment towards these bills.
- Ensure whether this emergency medical assistance is applicable outside the country.
Besides these benefits, credit card companies also offer round-the-clock assistance to cardholders under their travel insurance plan when they are travelling abroad.
The best part of having a credit card with travel insurance is the coverage is absolutely free. You do not have to pay any extra price like in case of normal travel insurance.
However, insurance coverage on credit card is restricted to what is written in the offer document. You cannot customise it according to your needs and preferences.
So whenever you look forward to getting a travel credit card, you should also ask the card provider about the travel insurance offered on the card.
While deciding the coverage terms and conditions, you should keep the worst case scenario in mind. Compare different credit cards and the coverage offered by them. Read the fine print and take a smart decision.
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