Travel insurance is essential luggage

BALI Belly, Kathmandu Quickstep, Montezuma’s Revenge...whatever you call it, getting sick overseas can be a dreadful experience, and potentially a very expensive one. So if you’re planning a trip with the family this summer be sure to put travel insurance on your list.

In a recent AAMI survey, nearly a quarter of all holidaymakers surveyed said they had fallen ill overseas. Many of these people needed medical treatment. Almost one in seven had to see a doctor, 14% were admitted to hospital and 9% had to cut their trip short because they were too sick to keep going.

There are ways to reduce the odds of falling ill on holiday. Drink bottled water instead of tap water, be careful about what you eat and take a sensible approach to alcohol.

However even with the best precautions people get crook. If it happens to you, it won’t just wreck your holiday, getting sick could blow your budget.

Many people don’t realise that Australia does not have a reciprocal health care agreement with a number of countries including some popular destinations. In India for example, the survey said it could cost anywhere from $A100 to see a doctor through to $A1,500 for a hospital stay.

This makes travel insurance worthwhile. It may be an easy option to accept the policy offered by your travel agent, but the premiums are likely to include a commission paid to your agent. This raises the cost without providing any additional benefit.

Arranging travel cover yourself is easy thanks to the internet but do shop around as premiums vary widely. Furthermore, conditions and coverage vary, so check carefully exactly what you are buying and what coverage you get.

As a guide, the cost of cover for a family of four holidaying to Fiji for ten days over the Christmas break, ranges from about $128 with QBE through to $196 with SureSave. At about $3 per person per day it’s good value.

Apart from shopping around for the best deal, there are other ways to save. If you have a package home loan your lender may include discounts on travel cover as part of the deal. Or, if you have home, car or even health insurance, your insurer may offer a customer loyalty discount on travel insurance. These discounts can be worth about 10%, so it’s worth looking into.

If you pay for your trip with your credit card, you may be entitled to free travel cover but it’s important to know exactly what the policy covers you for. These deals can have quite a few strings attached and plenty of exclusions – something travelers may only discover when they go to make a claim. Read the conditions closely.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

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