How does credit card travel insurance work?
Many credit cards now offer “free” travel insurance to customers, which on the surface sounds like a good deal. But how does this service stack up against regular standalone travel insurance.
We’ve taken a look at what credit card travel insurance actually entails, how it works and the advantages and disadvantages to help you determine whether it’s the right move for you.
What is free credit card travel insurance?
Well, the most important thing to recognise with this service is that “free” travel insurance isn’t really free. In fact, “complimentary” would probably be a better word to describe it. Credit card travel insurance is offered for customers who meet certain criteria, and generally require the customer using this service to meet a minimum expense threshold to activate the coverage.
How does it work?
The attraction of credit card travel insurance is that while there’s a minimum threshold of expenses to be met, you may find yourself paying for these expenses with your credit card anyway so at the end of the day your overall travel bill significantly easier to manage. Aside from that, credit card travel insurance works in largely the same way as regular travel insurance.
Advantages of credit card travel insurance
- Cards that come with travel insurance usually have other bells and whistles like rewards points that when put together make the annual fees for travel insurance worth it.
- Credit card travel insurance generally isn’t location or time specific, allowing you to go on longer trips all around the world without having to fork out for higher premiums.
- The level of coverage is generally comparable to that of standalone policies.
- It can also be a big time saver. Instead of having to duck around to different companies all of your travel expenses are coming out of the same source, which can be useful.
Disadvantages of credit card travel insurance
- Just having the card generally isn’t enough. Usually you will have to buy your tickets with your credit card to make sure the travel insurance applies, which can be restrictive.
- Some banks may not necessarily offer full coverage for each trip and you will need to get into contact to activate extras like emergency medical treatment and luggage delays.
- Excess expenses for making a claim can often be more expensive.
- Pre-existing conditions are often not covered and it can be difficult to get an exception.
- Doesn’t apply to domestic travel and age limits can also be restrictive.
How should I compare schemes?
Think about what sort of service you’re looking for and how the one offered as part of this deal fits in with your particular needs. By making sure you’re across the costs, restrictions and benefits associated by the cards being offered by each major bank, you can make sure you’re well informed to make the best decision to suit your particular situation and end coverage you’re happy with.
Related links:
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16 travel trends you need to know for 2016