Travel insurance

Travel insurance is insurance that is intended to cover medical expenses, financial default of travel suppliers, and other losses incurred while traveling, either within one's own country, or internationally. Temporary travel insurance can usually be arranged at the time of the booking of a trip, or after, to cover exactly the duration of that trip, or a "multi-trip" policy can cover an unlimited number of trips within a set time frame. Many credit cards include some form of travel insurance, you may be covered by a group policy at work, or individual policies can be purchased from various travel insurance issuers or brokers.

People over the age of 60 typically need to fill out a medical questionnaire when they buy travel insurance. Filling the form is very tricky because as explained in a must-see CBC Marketplace video, "it takes both a doctor and a lawyer to interpret the form properly". Since insurers do the underwriting, or at least detailed investigation, post-claim, any little innocent mistake in answering the questionnaire can be used as a reason to deny a claim, with certain policies. In other words, with certain policies, you do not actually know whether you are covered or not when you board the plane. You will only find out if you file a large claim and it is denied. Ways to protect yourself when buying travel insurance are discussed in this article.

Coverage and benefits
You need to determine what things you need to have covered: emergency medical; baggage (loss and/or damage); trip cancellation or interruption; and accidental death and dismemberment. The most important protection of travel insurance is the health insurance component, since out-of-Canada medical costs can be sky-high, and are not covered by your provincial health plan. The rest of this article therefore deals with travel health insurance.

Pre-existing medical conditions
It is essential for you to review your travel insurance policy to understand the definition of pre-existing conditions and terms such as "treatment" and "stable" as they refer to your medical history.

Treatment
For example, in certain policies, getting "treatment" for a condition might include a diagnostic test that revealed nothing. You were not actually diagnosed nor treated for this illness, but you are still supposed to tick yes in the medical questionnaire.

Stability
With regards to the stability of pre-existing conditions, both you and your doctor may think that decreasing the amount of a medication is a good thing and means that you are more stable, i.e. your health is improving. However, according to one travel insurance specialist,

Eligibility, limitations and exclusions
Travel insurance policies specify the requirements for eligibility. You may be sold a policy you are not eligible for, so read the fine print to make sure that the policy you are purchasing actually covers you.

How to limit the risk your claim will be rejected
Bruce Cappon recommends the following steps be taken to reduce the risk of having your medical claim denied, or even your having your entire policy declared null and void, on the basis of a single error in your medical questionnaire:
 * Consider a policy offering a “compassion clause”, where the policy offers protection (minus a large deductible such as $10,000) even if you failed to disclose medical conditions on the questionnaire
 * Talk to your doctor before filling out the medical questionnaire, and gather your detailed medical history
 * The shorter the medical questionnaire, the less chance for error

Another recommendation would be not to purchase travel health insurance from a travel agent (the person seeling you a trip or cruise) who probably has not been properly trained to sell insurance. In the CBC Marketplace video, travel agents are seen providing inadequate advice about how to answer medical questionnaires.

Problems with the travel health insurance industry
The Canadian Council of Insurance Regulators (CCIR) formed a working group on travel insurance in 2014. A large survey was conducted in 2015. In the 2016 report, CCIR writes that "there is a potential for misalignment between consumer expectations and industry practices based on identifiable knowledge and expectation gaps." The following are quotes from this must-read report, with emphasis added:

Articles from Bruce Cappon in Canadian MoneySaver
See his articles in the reference list and also:
 * Beat The Rising Costs Of Travel Insurance: 10 Tips To Slash Travel Insurance Premiums
 * Travel Insurance: Beware Of Policy Gremlins a.k.a. The Fine Print
 * Travel Insurance – Will You Be Defenceless To Enforce Your Right To Coverage?

Financial Wisdom Forum discussions

 * Travel Insurance, started 24 Jan 2006
 * Travel Insurance, started 05 Jan 2011
 * travel insurance madness, started 21 Nov 2013