By Bbazaar Malaysia on August 14, 2018
With travelling becoming ever so popular, a question that keeps popping up time and again among travellers, especially those on a budget is, whether travel insurance is necessary. While some don’t have the wiggle room in their budget to afford a policy, others just can’t do without insurance.
Truth is that travel insurance keeps you protected financially when something does go wrong with your trip. From lost luggage and cancelled flights to medical emergencies, you’ll be covered against most eventualities. Not convinced? Read our blog How Travel Insurance Shields Your Trip for some insights.
When it comes to protecting yourself during your trip, the conventional way to go about it is to buy a standalone travel insurance policy. But, did you know that even your credit card may also offer complimentary travel insurance cover?
In Malaysia, some credit cards—usually the travel cards—come with travel insurance cover as an additional and complementary feature. Although you don’t need to pay anything more for this type of cover, you may have to pay your card’s annual fee to ensure insurance validity.
Moreover, there most certainly will be some prerequisite condition for you to fulfil if you wish to be covered. For instance, most credit cards in Malaysia require you to pay the entire cost of your flight tickets with the card to activate your travel insurance plan.
Other such conditions include meeting a minimum spend requirement or paying for other travel costs such as accommodation and transport with the card.
When it comes to the basics, credit card travel insurance works much the same way as a regular travel insurance policy from a private insurer. You’ll be covered for travel inconveniences, trip interruptions, and medical emergencies.
But, that’s where the similarities end. In fact, there are quite a few differences that you’d do well to consider before going for either type of travel cover. Read on to see how credit card travel insurance stacks up against the same kind of cover offered by a standalone policy.
The biggest difference between standalone travel insurance and credit card travel insurance is the monetary limit for each coverage benefit. As mentioned earlier, both these travel insurance types work very similarly and even have pretty much the same benefits.
But, where they differ is the coverage amount. For instance, most standalone policies offer unlimited coverage for medical expenses. Credit card travel plans usually have a comparatively lower limit for such cover.
When it comes to protecting yourself financially for an extended trip, a single-trip, standalone travel insurance policy can keep you covered for up to 12 months. On the other hand, a credit card travel insurance plan will only cover you up to 3 months, which won’t be enough if you’re planning a long holiday.
This is really important. You can always customise a standalone travel insurance plan in line with your personal travel needs. Whether you need to increase the excess payable or add additional coverage for adventure sports, you can tailor the policy to ensure complete protection at all times.
On the contrary, credit card travel insurance follows a rigid working process wherein you can’t change or amend any of the coverage benefits to suit your requirements.
When it comes to providing cover in case of existing medical problems, a standalone policy is always more flexible. The premium may go up eventually but you will have some sort of coverage benefit to protect you. Credit card travel insurance plans, however, don’t cover any pre-existing health issues.
If you’re travelling in a group with your close friends or family, don’t bother thinking about credit card insurance. This is because credit card travel plans are only valid for the cardholder and no one else. You may even have to satisfy some qualifying criteria to be eligible for insurance coverage.
With a standalone travel plan, you can add your family members or fellow backpackers too thereby ensuring protection for the entire travel party. That said, it will impact your insurance premium, but guess it’s worth it.
The place where you’re headed too can make a world of difference to the premium when it comes to standalone travel insurance. For instance, a place with a known history of crime or theft or history of terrorist attacks will naturally command a higher premium than a place that’s renowned for being extremely safe.
On the flip side, there’s no such binding factor for travel destinations in a credit card plan. No matter where you’re travelling to, the card’s annual fees or spending requirement will remain the same.
As such, when you look at the overall picture, a standalone travel insurance plan comes up trumps. Unlike credit card travel cover that’s only a feature of a completely different financial tool, a standalone policy is meant specifically for financial protection when you’re on a trip.
In addition, its coverage limits are higher and the product itself is more flexible in the way it works when compared to a bracketed credit card travel plan.
Also, most travel insurance companies have in place well-oiled mechanisms to ensure your claims are addressed faster and you receive timely assistance.
Written by BBazaar Malaysia team