Travel insurance is not a one-size-fits-all proposition, so the price and conditions of any travel insurance policy you buy will vary. However, there are some guidelines about pricing that may be useful to understand, so that you can feel more comfortable that you are getting a good value when making a travel insurance purchase.
In general, you should expect that a travel insurance policy will cost you anywhere from 4%-10% of your total pre-paid, nonrefundable trip cost. In other words, if you purchase a trip with a total cost of $5,000, your travel insurance policy should not cost any more than $500. While there are exceptions to this rule, which we’ll explain a bit more in a moment, you can use that figure as a guideline to help you avoid unnecessarily high premiums.
In order to calculate the cost of your travel insurance policy, the company will use a few pieces of personal information that factor into the equation. Among the most important of these is the age of the traveler(s). If you are 88 years old, your travel insurance will likely be more expensive than that of a 20-year-old. Additionally, the length of time you will be traveling and the number of people that will be covered on the policy can affect the price of your travel insurance policy.
Other factors to consider in deciding whether or not the rate you’ve been quoted seems reasonable include additional coverage options you may have chosen when getting your quote. A basic, no-frills travel insurance comprehensive policy will naturally cost less, per traveler, than one that includes things like Cancel For Any Reason coverage. If you also asked for a particularly high rate of coverage for medical expenses, or if you’re purchasing something like a medical evacuation policy, you may also see that the rates are different than they would be with more standard benefits. However, you should not be deterred from buying travel insurance coverage that you really feel you need just because the price of the policy is higher than one without the additional benefits. The kind of protection needed by a traveler who intends to hike the Himalayas, for example, is vastly different from that needed by a family taking a short cruise to the Bahamas. Only you can really decide what level of risk is acceptable for you, and what kind of travel insurance coverage will make the most sense for your trip.
While prices will always vary across different plans, different travel insurance providers, and different kinds of coverage, it’s important to compare prices among all the options you think are best for you and make sure that you are getting reasonable benefits at a reasonable price. Be wise when doing so, and make sure to really compare “apples to apples” – that is, compare only those plans that offer you similar levels of coverage and are absolutely appropriate for your needs. Don’t be swayed by a lower-priced plan with inferior benefits; travel insurance, like any other type of insurance, is not the kind of purchase that should be shortchanged.