Sunscreen for Your Assets
/The kids are out of the house and your husband is taking a week long deep-sea fishing trip with his buddies. Sounds like it’s time to get the ladies together for a much-needed girls trip! Whether you and your friends are into luxury weeks at a unique spa, cruises to the Mediterranean, or even in search of an adventure at the Grand Canyon, your vacation is an investment…so why not protect it? Shielding yourself from the potential for a financial downfall related to uncontrollable circumstances like medical emergencies or natural disasters can add an extra layer of comfort to your time away.
We all love to think about the fun things we’re planning to do on our vacation, like time on the beach or that hip new restaurant you’ve been reading about. We don’t want to think about the unfortunate things that can happen, but that’s an essential part of the travel planning process. There are several different types of travel insurance you may want to consider, dependent on your age, your medical history, and your destination. We’ll cover the basics of what you’ll want to look for here.
1. Start with your credit card. Many credit cards offer some type of travel insurance for the trip items you charged to the card. You’ll have to dig deeper into the fine print to see what, if anything, is covered under the terms of your card. If you no longer have the terms and conditions booklet (you know, that one with the tiny print you probably never read?), most credit card companies have an electronic version available on their websites or you can call to ask questions about your coverage.
There’s a wide array of what can be covered by your credit card company, varying from no coverage at all to full trip reimbursement based on the circumstances of cancellation, delay or travel interruption. Check the dollar limits and the terms of a “covered event” to ensure that if you catch the flu before your trip to Paris, you’re not left hung out to dry because the flu isn’t a “covered event” or the dollar limit is less than the cost of your trip. If your credit card’s policy falls short of your desired level of coverage, consider a supplemental travel insurance policy. Keep in mind credit card insurance policies never cover medical expenses.
2. Let’s talk medical coverage. Most U.S. health insurance plans won’t cover emergencies that occur outside of the U.S. If you decided to finally try scuba diving on that cruise with your girlfriends, get bitten by a shark, and need an air ambulance to take you to a medical care facility, you’ve probably already racked up a 6-figure bill. Tack on the fact that most foreign hospitals will require you to plunk down a credit card before they’ll let you in the door, and the bills keep adding up.
There are several different ways you can make sure you’re covered in an international medical emergency. If you’re 65 or over and on Medicare, there are supplemental plans you can purchase that will cover up to 80% of a foreign travel emergency with a $50,000 lifetime coverage limit. Go to www.Medicare.gov to learn more about these Medigap plans. If you’re not yet eligible for Medicare, you can also consider a travel medical insurance policy to cover the costs of various levels of overseas medical treatments. Go to www.travel.state.gov and look in the Before You Go tab for a list of U.S. Based Travel & Medical Insurance Companies.
3. Will you be traveling outside the United States or splurging on a dream vacation that’s outside of your credit card’s travel insurance dollar limits? If so, consider taking out a separate travel insurance policy. According to the U.S. Travel Insurance Association (www.ustia.org), 1 in 6 American travelers are impacted by a medical condition, a natural disaster, or a carrier-caused delay, and only about 1 in 5 of those affected had travel insurance policies in place. Taking out a separate policy ensures you can cover the gaps in coverage from other providers and protect your financial well-being. There are many providers available, so look at the coverage limits and decide which policy best fits your travel plans. When in doubt, ask a professional travel agent for some help deciding what type of policy makes the most sense for your situation.
- Margaret Gooley, CFP®, Worley Erhart-Graves Financial Advisors
