Search the Internet          Tips  Sites: Finance, Investment

Have insurance, will fly

Arti Sharma

Did Phineas Fogg take out travel insurance before he embarked on his round the world trip in 80 days? The answer is no. But the global traveller of the 21st century is heading out into an altogether different world and it never hurts to be prepared. And Fogg might have liked today's policies for overseas travellers - some even cover flight delays.

There's plenty on offer. Today all the four state-run players offer standard covers and three of the new general insurance players offer the standard covers with add-ons. But the latest player on the block is a travel agency, Thomas Cook, which is the first to offer an insurance product that has been designed by them.

We take a look at the travel insurance schemes on offer and how they compare with each other.

The standard state-run Overseas Medical Policy (earlier known as Videsh Yatra Mitra Policy) offers a cover for personal accident, medical expenses and repatriation, loss of checked baggage, delay of checked baggage, loss of passport and personal or third party liability.

The cover is available for $50,000 to $500,000 depending on the scheme and the inclusion or exclusion of travel in the US and Canada. The scheme is underwritten by UK-based Mercury International Assistance and Claims Limited.

Premium rates differ if the US and Canada and are included in your travel plans since the insurance rules differ in these countries. Also, keep in mind that travel premium paid in advance is trip-specific and is calculated on the basis of age and the duration of stay.

So, for a standard - excluding US and Canada - policy for a sum insured of $50,000, the premium you fork out is Rs 604 (Rs 575 plus a 5 per cent service tax). This is applicable to persons between six years to 40 years old and who're travelling for a period of one to 14 days. Premium rates have been revised in February this year.

The changes are in the premium rates for the higher age bracket of 61 years to 70 years and for plans that include travel to the US and Canada. So where you would have paid Rs 1,047 for a one to 14 day trip, excluding the US and Canada, if you are between 61 years and 70 years, today you will have to pay Rs 1,204 plus a 5 per cent service tax.

Compare this to Thomas Cook's Travel Care. First, you need not book your tickets through the agency to avail of their insurance offering.

The scheme has been floated through a wholly-owned subsidiary, Thomas Cook Insurance Services India Limited, and is underwritten by Tata AIG. "We decided to get into an insurance product because we wanted to become a one-stop shop for travellers," says Ashwini Kakkar, chief executive officer and managing director, Thomas Cook India.

The scheme offers five options - classic, executive, premium, annual and family care - depending on the size of the sum insured and the add-ons offered. The classic scheme offers assistance services for hospitalisation and personal liability. The accident cover and medical expenses reimbursement is $50,000. This policy also includes emergency evacuation, repatriation of remains and a $10,000 limit for accidental death.

This basic policy, which does not cover travel inconveniences like delay or loss of baggage, comes at Rs 651 if you fall in the six months to 40 year age bracket and are travelling for one to 14 days anywhere excluding the US and Canada. In comparison, Bajaj Allianz and Tata AIG's own policy - Travel Guard - offer covers for the delay of baggage, loss of passport and personal liability at the same premium and sum insured.

The executive category includes assistance services, $200,000 cover for medical expenses reimbursement, out of which $100,000 is towards personal liability, $15,000 for accidental death and dismemberment due to unforeseen circumstances and $5,000 for accidental death and dismemberment while travelling in a common carrier. This policy also has covers for checked baggage loss, baggage delay after 12 hours, loss of passport and a new inclusion of a hijacking cover of $30 per day.

One unique feature, that no other policy offers, is that of a bail bond cover of $5,000. This scheme also offers a home burglary insurance of upto Rs 100,000.

All of this comes for a price. You will end up paying Rs 1,103 (including service tax and service charge) for a one to 14 day trip anywhere excluding the US and Canada if you are below 40. And at Rs 1,523, you can include the US and Canada.

Similarly, the premium category that offers a policy cover for $500,000 includes the above add-ons. But it comes with higher covers for personal liability and home burglary, and has additional covers for in hospital indemnity of $15 per day and for trip delays of $10 per 12 hours.

The premium cover comes at a steep tag of Rs 1,334 for a one to 14 day trip anywhere in the world except the US and Canada if you are below 40. "A traveller has to decide whether it is really worth his while to spend the additional money for this policy. For a normal visa requirement the standard cover is more than enough," says a Mumbai-based travel agent.

Thomas Cook, like the other insurance companies, also has policies for frequent corporate travellers who can avail of an annual cover. Bajaj Allianz offers covers for sums insured of $250,000 and $500,000, whereas the state-run agencies namely Oriental, New India, National and United India Insurance offer covers of $100,000 and $500,000 provided a single trip in a year does not exceed 60 days of stay.

The annual policy is available for the age group of 18 years to 70 years and the premium is divided between 18 years and 60 years, and 60 years and 70 years. For the 18 years to 60 years age group and cover of $100,000, the state-run companies charge a premium of Rs 3,150, including the 5 per cent service tax.

For a cover of $250,000, the private players charge Rs 4,095 if you are below 40. Also, players like Bajaj Allianz allow the policy for a duration of 45 days with a maximum limit of upto 180 days of travel and stay in a year.

Thomas Cook's annual cover is at a standard $250,000 and within the age bracket of six months to 60 years, the premium payable is Rs 5,372. However, any single trip cannot exceed more than 30 days in this case. This, of course, includes all the add-ons offered in the other schemes plus an International Airline Passenger Associations (IAPA) membership that facilitates discounts on car rentals and hotels around the globe. The service charge for this, however, is Rs 500.

Eventually, an insurance policy is a safety net against contingencies. So have a look at all the policies and then decide what will be best for you. In most European countries, insurance is a must before the visa is issued.

All players also offer group policies for families and the state-run players offer policies for employees and students as well. Also, don't forget to read the fine print regarding eligibility and the terms and conditions. After all this, pack your bags and rest assured that you have some back up if ill-health derails a perfectly planned trip.

Powered by

ALSO READ:
The Rediff Budget Special
The Rediff-Business Standard Special
Money