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How is My Travel Insurance premium calculated?

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Published on September 13, 2021. EST READ TIME: 3 minutes

Travel has invariably been among the most sought-after activities during the holidays. Ever since the Covid-19 struck, travel was restricted due to lockdown rules and regulations laid out by authorities. With widespread vaccination drives and the number of vaccinated people rising at a rapid rate, travel is back among the list of activities planned in the coming months. Travel insurance has become a crucial tool to have while travelling within the country or abroad. Some countries have even made it mandatory for travelers to have travel insurance while applying for a visa.

What is Travel Insurance?

Travel insurance provides cover for a wide variety of uncertainties such as loss of baggage, flight delays, medical emergencies, etc. You can be a travel enthusiast planning a trek in the mountains, a business person travelling to close a deal, a student going abroad for higher studies or a family visiting their relatives during holidays. No matter what the purpose, travel insurance has become vital during these uncertain times.

Premium Calculated Based On

A premium is an amount paid by an individual for buying a travel insurance policy. It is one of the key factors to be considered while deciding on travel insurance. All you have to do is visit the HDFC ERGO website and choose the travel insurance best suited for you. Once you fill in the basic details such as the traveler’s age, destination, the coverage extent etc, it’ll compute the premium amount that can help you in making an informed decision. A travel insurance premium amount could vary based on multiple factors such as the destination, duration of travel, age of the traveler, etc. Some of the key factors which impact the travel insurance premium are listed below.

• The company, Type of policy, and Coverage

The amount of money paid as a fee to get the financial coverage under a travel insurance policy is called the premium. A premium can vary based on multiple factors such as

1. Insurance company -

Different insurance companies have different coverage that they provide under their travel insurance policy. The premium amount paid to avail benefits of these policies varies from insurer to insurer. Hence, it is prudent to do due diligence before finalizing a travel insurance policy.

2. Type of policy -

There are various types of travel insurance policies. A travel insurance policy for a solo trip is different from a group or family trip policy. Similarly, the insurance policy for domestic travel will differ from an international travel policy. The component that changes the most with different types of travel insurance policies is the amount paid as an insurance premium.

3. Coverage -

The coverage provided under travel insurance, in simple words, is the scope of liabilities covered under that insurance service. A coverage could range from basic such as loss of luggage or theft to advanced ones which provide financial aid against the medical exigencies and dental treatment, etc. while travelling. The more the coverage the more would be the premium amount for that travel insurance policy.

• Sum insured

The sum insured directly impacts the premium amount. The higher the sum insured for a travel insurance policy the higher will be the premium amount and the rate of interest charged.

• Period of travel

Just like sum insured, the duration of travel has a direct connection with the amount of insurance premium. The longer the duration of the trip, the higher would be the insurance premium amount a policyholder pays and vice versa.

• Add-ons

Usually, a basic travel insurance policy provides cover for common travel occurrences such as loss of baggage or theft, flight delays or cancellations, etc. But if you wish to get additional coverage such as medical expenses reimbursement, protection for vital documents, etc, you can avail of these benefits by paying an additional amount for premium.

• Destination

One of the key factors that impact the calculation of travel insurance premium amount is the destination. Travelling to a country where the chances of occurrence of something unfortunate is more probable will have a higher premium as compared to a destination that has a low probability of risks.

Conclusion

Reasons for travel might range from a backpacker’s trip to business travel to pursuing higher studies to visiting family and friends in different parts of the world. Whatever might be your reason, it is imperative to have travel insurance to safeguard yourself against eventualities that might affect you financially when travelling.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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