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Travel Insurance That Can Save Your Life

Dan Kundin was an independent guy, even at age 89. So, when he decided to go on a round-the-world cruise, his daughters, Liz and Susan, didn't see a big problem as long as he had travel insurance. No one really fretted about what could go wrong. Until it did.
03/17/2014 08:52am ET | Updated May 17, 2014
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Dan Kundin was an independent guy, even at age 89. So, when he decided to go on a round-the-world cruise, his daughters, Liz and Susan, didn't see a big problem as long as he had travel insurance. No one really fretted about what could go wrong.

Until it did.

The cruise was only two weeks into the four-month total when Dan came down with an intestinal bug. There was a clinic on ship, with medical staff, and they could handle a bug. But then the bug triggered heart and kidney issues. They kept him going until the next port: Easter Island, smack in the middle of the Pacific. He was transferred to the small island hospital, but they could not deal with the level of care that was needed. So he was airlifted (a medical evacuation plane -- imagine an ambulance with wings, only more sophisticated) to the nearest big city: Santiago, Chile, a five-hour plane ride away. Dan had two weeks in the hospital in Santiago, with multiple diagnostic tests and intensive treatment. His daughters flew to Santiago to be with him. When able to travel again, Dan was flown back to the U.S. on a commercial flight, but Business Class and with a personal medical attendant at his side.

Beverly Falley was on a "Bucket List" safari with her mother, Helen, and husband, Mike, when her mom tripped over a floor mat... in Tanzania. It was 150 kilometers to the nearest clinic, where a broken hip was diagnosed. Mom had to be evacuated -- medical jet ambulance -- to Johannesburg, South Africa, for hip surgery. She spent weeks in the hospital until well enough to fly back to the U.S. accompanied by her daughter... and a personal nurse for the entire trip.

"The travel insurance was a lifesaver," said Beverly. "Their medical team was in constant contact with us and the local medical team throughout the crisis."

As an experienced travel agent specializing in custom travel, Beverly had recommended different types and levels of travel insurance to her clients for years. But personally experiencing a medical emergency, with the inordinate expenses involved, has altered her perspective.

"Of all the insurance available, medical evacuation is now at the top of my list," she explained. "The worst thing that can happen is not a flight delay or trip interruption. Those are inconveniences. Medical evacuation can mean your life... and quality of care."

"The devil is in the details" applies to travel insurance. It is essential to understand exactly what a policy covers, the parameters and limits.

But before you start comparing travel insurance policies, research what you may already be paying for... and covered for.

1. Most health insurance plans cover medical treatment anywhere in the U.S. with provisions and protocol (i.e,. pre-approval; using providers, both hospitals and physicians, in networks, etc.). But many plans do not cover international travel. It's essential to know your health insurance plan coverage and protocol. Seniors especially need to note that Medicare does not extend internationally and that some purchased policies exclude coverage for pre-existing conditions.

2. Personal homeowners and renters insurance policies generally extend liability insurance worldwide -- not just at your personal residence. So, if I accidentally do something that incurs liability (i.e., slam into an old lady while riding a bicycle in Portugal), I'm covered. Personal property protection is limited to "named perils," and subject to your policy limits. Theft is covered, and a litany of natural disasters, but deductibles and specific dollar limits apply for everything from jewelry to cameras to computers. If you have a "personal article policy," then listed items are covered (read the small print for "broad peril"). As for iPhones, iPads or Blackberries? Sorry, but small portable electronics are not eligible.

3. Credit cards all have varying coverage for cardholders depending on the level of the card... Golds and Platinums get more bling. But you have to use the card to buy the ticket or pay for the trip. Knowing what each credit card covers can determine which card you use to pay for travel.

Many people have more coverage than they are aware of -- if they make use of it.

For example, I have a Blue Cross and Blue Shield policy through my husband's work. It includes a supplemental BlueCard Worldwide Program with benefits for emergency medical care. But there are required procedures, especially for overseas. I can call the 24/7 hotline (collect, from anywhere in the world) and they will help arrange referrals to a local doctor or hospitalization. I can learn which hospitals and providers are "contracting" at a destination before I even get on the plane so I have that information with me. With hospitalizations, BlueCard can often arrange direct pay so I don't have to cover costs up-front and later get reimbursed. With outpatient, I do pay the provider and submit a claim with itemized statements. Sample international claim forms are on the BlueCard website. BlueCard has supplemental policies for students studying abroad, extended travel and expatriates (which I really intend to use... someday).

As for credit cards, if I use a certain one to book flights or travel, it then covers, at no extra charge, trip cancellation insurance (albeit with defined lists of reasons), trip delay (meals and lodging reimbursement), lost luggage (with limits but for more than airlines cover), baggage delay (18-plus hour delay, to purchase "necessaries"), auto rental collision damage waiver, travel accident (death benefit and -- the word that makes my skin crawl -- dismemberment).
But grab the wrong card when I'm making that reservation on-line? Oops. I get nothing.

So, if i think ahead I can have most emergency travel needs covered, except for the most critical and necessary coverage: medical evacuation insurance.

Which is why I'm about to get pushy.

I've talked to more people who worry about losing a bag, paying for a hotel due to a flight delay, getting sick before their cruise... but risk their life savings (if not their life) by not having medical evacuation insurance. It's like having health insurance for routine medical care... but not cancer or horrific accidents. It makes no logical sense.

Frequent travelers can score the best deals for "medevac" insurance by buying an annual policy that covers all travel rather than trip-by-trip. For example, an annual policy with Medjet Assist for AARP members under age 75 is only $215 per individual or $325 for a family. Regular memberships start at $260 a year. While most "bundled" trip insurance policies have a cap on medical evacuation, Medjet Assist has no caps. TravelGuard also has annual plans and specific trip plans.

The best place to start educating yourself about travel insurance is with the USTIA (U.S. Travel Insurance Association) website (www.ustia.org.) Word of advice: Never buy travel insurance from a company that is not a member. The USTIA site also has a number of useful mini-articles on safe travel. And there are several websites that compare travel insurance policies based on a particular trip: www.insuremytrip.com and www.squaremouth.com are popular.

One final note: Insurance is void if a DUI is involved (and European alcohol limits are much lower than in the U.S.). Or any illegal activity (drugs, arrests, etc.) And some "high-risk" activities are excluded in certain places (zip-lining, bungee jumping, etc.)

I love to travel. I love to explore. I'll take some risks.

But I'm not stupid.

What the Terms Mean

Trip Interruption: You get sick, or a family member back home has a medical crisis, or something unforeseen happens that requires an immediate return. In sum, an emergency. Natural disasters (on trip or at home.) Political unrest (more terrorism, less strikes or labor unrest, at destination... but not just because you start feeling anxious. It needs to be objectively assessed as dangerous). If one person on the trip cannot continue, this can cover the entire family's return... because you can't ship a kid home with a broken leg and continue on to Amsterdam. Will help you get home and reimburse for pre-paid expenses (i.e., cruise, tour, etc.)

Trip Cancellation: All of the above, but before the trip starts.

Trip Delay: Something causes a delay that incurs expenses. Airlines only pay for delay costs if the delay is due to their mechanical issues... not weather, disasters, etc.

Baggage (lost. stolen or delayed): Reimburses according to plan. What airlines cover, especially internationally, can be a pittance of what it costs to replace possessions. With delayed luggage, the delay has to be over a certain number of hours.

Medical Treatment: You get a bad toothache (like me in Germany) or get a flu bug so bad you need to be hospitalized (me in Paris.) You get hit by a car. You trip on a cobblestone and... oops... break an ankle. Covers everything from a doctor visit for an antibiotic to major surgery with weeks of recuperation.

Medical Evacuation: Provides 24/7 coordination of medical care, air-ambulance evacuation to best facilities for urgent treatment required and later evacuation to whatever hospital in the United States you choose. Will also pay for family member to be flown to be with you, for translators to explain and navigate treatment, for the myriad incidentals that one cannot predict. Can be purchased per trip, or, for a much better deal, as an annual policy for frequent travelers. When looking at comprehensive travel insurance, the "up to" limits are important to pay attention to. While $25,000 for medical evacuation may seem like plenty, it's not, especially if you ever need to be brought back to the U.S. (which can cost $50,000 to $100,000). On the other hand, $25,000 for medical treatment goes a long way anywhere except in the U.S.

There are policies that cover "any excuse" cancellation or interruption, but they cost more. But for travelers with unpredictable business demands, it can be worth it.