Travel Medical and Major Medical Insurance

Travel Medical and Major Medical Insurance
Both of these types of insurance provide medical protection if the policyholder becomes ill or is injured while traveling. The difference between these two types of insurance is the duration of coverage:

• Travel medical insurance provides only short-term medical coverage; the duration can be anywhere from five days to up to one year, depending on the policy.
• Major medical insurance is for travelers who are planning to take longer trips of six months to one year or longer.

These types of insurance can help you cover medical expenses and locate doctors, hospitals, healthcare facilities and foreign-language services if you become ill or injured while traveling overseas. Whether you purchase medical insurance separately or you already have it, find out if you will need prior approval from your insurance company for any type of medical care.

The U.S. government urges Americans to consult their medical insurance companies prior to traveling abroad to determine whether a given policy applies overseas. For example, your medical insurance may only cover you in the U.S. and Canada, but not Europe. According to the State Department's Bureau of Consular Affairs, Medicare does not provide coverage for hospital or medical costs outside of the U.S. For more information go to Travel.State.Gov.

Also, when traveling, always register your travel plans with the State Department through its free online service Travel Registration website - this way, the nearest embassy or consulate can contact you if there is a family emergency or a state or national crisis while you're traveling.

Note: Check to see what preexisting medical conditions, if any, are excluded before you sign up. Make sure you read all the fine print and know what the policy covers and what it doesn't. (To learn how to save money at the doctor's office, read 20 Ways To Save On Medical Bills.)

Emergency Medical Evacuation Insurance
This type of insurance provides coverage for medically necessary evacuation and transportation to medical facilities. These costs can easily reach $10,000 out of pocket if you don't have coverage. This becomes extremely useful should you become stranded in a remote rural area without easy access to needed facilities. (Paying with cash overseas can lead to unexpected problems. Read Travel Smart By Planning How You'll Pay to learn how to spend wisely.)

Accidental Death and Flight Accident Insurance
These types of insurance pay benefits to a traveler's surviving beneficiaries, as with life insurance. Benefits are paid out in the event of an accident resulting in death or serious injury to the traveler. (For more on making sure you're getting the coverage you need, read Understand Your Insurance Contract.)

Specialized Coverage
There are also more specialized forms of travel insurance. For example, some focus on the needs of business travelers, extreme athletes or expatriates. So, if you are planning to participate in high-risk or extreme sports while away, selecting an insurance that is made specifically to cover you in case of a sports-related injury might be more cost-effective and needs-specific than selecting an insurance policy that provides more general coverage. (Let Life Insurance Riders Drive Your Coverage outlines specialized add-ons that can modify your current coverage. What To Do If Your Insurance Won't Pay describes situations, such as participating in hazardous activities, that can affect your insurance coverage.)

Purchasing Travel Insurance
You can purchase travel insurance in three ways:

1. Per-trip coverage is the most common type of travel insurance. according to the U.S. Travel Insurance Association, 80% of all travel policies purchased are per-trip policies. This policy is for travelers who don't travel as often, and it provides protection for a single trip.
2. Multi-trip coverage provides protection for multiple trips during one year, but none of the trips can exceed 30 days.
3. The annual policy is for frequent travelers; it provides coverage for a full year.

The cost for each varies depending on the category or type of insurance for the coverage you think you will need. Generally, the cost of a per-trip travel insurance policy varies between 4% and 8% of the cost of the total trip. For instance, if your total trip cost, including airfare and a week-long tour of France, is $3,000, your out-of-pocket insurance cost would be between $120 and $240.

Be wary of travel insurance companies that overprice their policies. Check out the reputation of the insurance company you are looking to purchase from. You can start by looking at organizations like the U.S. Travel Insurance Association, which provides helpful advice on choosing travel insurance. You can also go to your Better Business Bureau (BBB) office to find out about qualified travel insurance companies. (Read more about how the BBB can help in The Better Business Bureau's Tool Belt For Saving Cash.)