What is the Cost of Travel Insurance? - 2021 Review
The cost of travel insurance reflects a range of factors, such as:
- Length of Trip
- Ages of Travelers
- Price of Trip
- State of Residence
- Trip Destination
Length of Trip
Most travel insurance carriers charge the same cost for a 10-day trip as for a 30-day trip. Then, the cost of insurance increases for each additional day after 30 days.
For example, we have a couple, both age 60, going on a 30 day trip to France, which costs $6,000 in total.
Worldwide Trip Protector costs $332, and Seven Corners RoundTrip Choice is $344. Note that the price is for both travelers, not per person.
Ages of Travelers
The travelers in the last example were 60 years old. What if they were age 40 instead? How does that affect the price of travel insurance?
In this case, the price decreases because it’s less risky to insure younger travelers. The Worldwide Trip Protector’s price went from $332 to $246, and the RoundTrip Choice reduced from $344 to $288.
Also, notice that the Worldwide Trip Protector is not the least expensive, but now the RoundTrip Choice is. The takeaway is that as you change variables, different plans will come up as the least costly.
What happens if our travelers are age 80?
The RoundTrip Choice now costs $546, and the Worldwide Trip Protector went up a bit more, to $712. However, another plan came in costing less than Worldwide Trip Protector: Seven Corners RoundTrip Elite, which is $656.
Typically, travel insurance companies use 5-year incremental bands for age-based pricing. A traveler age 79 will see a different price than an 80-year-old. However, an 80-year-old and 84-year-old are likely to see the same cost.
If you’re coming up on a milestone birthday, you can save some money if you buy the policy before your birthday.
Price of Trip
Very simply, the more expensive the trip, the higher the cost of travel insurance. Recall that our 60-year-old couple was going to spend $332 on the cheapest trip insurance for their $6,000 vacation.
Here is what happens when the vacation price drops to only $1,000:
Our cheapest travel insurance, Worldwide Trip Protector, is now $92. The RoundTrip Choice is $104.
Overall, the Trip Cost has the most significant impact on the price of travel insurance. The more expensive the trip, the more expensive insurance will be.
Travel insurance policies offer comprehensive Trip Cancellation benefits if a covered illness or injury prevents travel. In that case, the travel insurance carrier provides full reimbursement.
State of Residence
You’d never expect your state of residence would affect how much you pay for travel insurance. But each US state and Washington DC has different laws, rules, and regulations regarding the sale of insurance.
Remember that the Worldwide Trip Protector was $332?
Well, that was the price for residents of California. If you reside in Florida, the price is $406. Washington state is $408. Missouri is $464.
The reason for the differences is because those are the prices that a particular state approved. Different states may also have various provisions and definitions in the policy. This is another excellent reason to spend a few minutes reviewing your plan certificate.
What If My Traveling Group has Multiple Residences?
Friends and family frequently travel together as a group, often as residents of different states.
Sometimes, married couples have multiple residences as they near retirement. For instance, one is already a resident in Florida, while the other is still a resident of New York.
When traveling with a group, if you live in another state than the other travelers, you’ll have to buy a separate policy.
Unfortunately, you cannot combine all travelers from multiple states because each state regulates insurance differently. If you do, you can run the risk of invalid coverage for some travelers. Fortunately, there should not be much difference in price.
Period Before Travel
It might seem logical that the cost of travel insurance increases the longer between buying the insurance and departure for the trip. Fortunately, this is rarely the case.
Almost all travel insurance plans at AARDY cost the same whether you buy it a year before departure or a day before departure. The only exceptions are insurance plans from AIG Travel Guard because they are dynamically priced.
Also, you get more value for your money when you buy travel insurance early. First, your trip is covered for cancellation for a longer time for the same price. Second, if you buy shortly after paying your Initial Trip Deposit, you can also qualify for Time Sensitive benefits, like Pre-existing Condition coverage, Cancel For Any Reason, and Bankruptcy of the travel provider.
Typically, if you buy the policy within 10-21 days of paying your initial deposit and cover 100% of all prepaid, non-refundable Trip Costs, you can take advantage of Time Sensitive benefits.
So, if you can achieve substantial savings by booking your cruise a long way ahead, then you can always protect the financial investment by buying travel insurance.
There is no sense in delaying when you buy travel insurance. The insurance will not become cheaper.
Comparing the Travel Insurance Market
You’ve seen some of the factors that impact the cost of travel insurance: length of trip, ages of travelers, price of the trip, state of residence, and the period before travel.
There is no single ‘best’ policy. It is critical to compare travel insurance options to get the best value and peace of mind.
Use the travel insurance comparison tool at AARDY to see the available coverage levels and prices.
More expensive does not necessarily mean better. At AARDY, we consistently recommend the least expensive plan with at least $100,000 Medical Insurance (if you’re heading overseas). We believe it’s the right balance of coverage for the money for most travelers.
However, you may have specific concerns that the policy does not address. So we always recommend contacting us to make sure the plan you buy covers the circumstances that concern you. You can reach a licensed AARDY agent by chat, email, or phone.