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Which is better, annual or per-trip travel insurance?


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Q:

Our family of 4 goes on holiday at different times. Would you recommend an annual travel insurance plan or for us to buy our insurance each time we go away? We live in Hong Kong and normally travel around asia.

A:

The benefits of a per trip vs annual travel insurance plan really depend on the amount of travel you and your family are planning to undertake each year, and the location of your destination. Frequent short trips overseas to other Asian countries would likely be better served through the purchase of an annual policy. Protection for a single long duration holiday in a location like the USA may be better with a one-off travel policy.

Single Trip Travel Insurance

Generally, every insurance company offering a single trip travel insurance plan will calculate the premium of that policy through the number of days the trip will take. In some cases the insurer may choose to add the traveler’s age, and the trip destination, to that calculation.

In essence, however, most travel insurance plans operate on the general idea of “the longer you travel the more expense the policy becomes.” It is also important to note that the day you leave your country of residence and the day which you return back are both considered “travel” dates under all travel insurance plans.

As such, if you left Hong Kong on Friday Afternoon and Returned Monday Morning at 1am, the premium calculation would be factored on a journey of 4 days in duration.

In Hong Kong Travel Insurance Plans will generally range from HK$70 for the first travel day through to around HK$ 300 for trips of 9 days long, with varying coverage levels and calculations from the many different insurers. Internationally, the highest end travel insurance options will start at roughly US$ 4 – 5 per day for someone between the ages of 17 and 36, and will generally end up in the region of US $ 38 (HK$ 300) for a 9 day journey.

While there may appear to be no difference in premium, the International policy in this case will likely only be providing Medical Insurance. In order to access extra non-medical coverage benefits (like Loss of Baggage, Trip Cancellation, and Trip Curtailment) you would need to pay an additional premium.

In reality, the very best international travel insurance plans would normally end up costing somewhere in the region of US$ 95 – 100 (HK$ 780) for an individual aged 17 to 36 for a 9 day vacation. The insurance coverage being offered is much stronger for the higher premium, but depending on the location you are traveling to this may not be justified.

Annual Travel Insurance

Annual plans will cover you for as many trips as you may take over the course of the year, with the provision that no single trip exceed a certain duration.

This duration will (like the premium calculation) be entirely at the insurance company’s discretion but will normally range from 30 days per trip to 90 days per trip.

If you made 10 trips of 9 days in duration under most Single-trip travel insurance products that would normally cost approximately HK$ 3,000. If an annual travel plan costs less than this, it would likely be more practical for you to purchase an annual travel insurance policy – especially when factoring the additional per-person coverage cost of the rest of your family!

Hong Kong Travel Insurance plans offer annual policies starting at HK$ 2,900 for a family of 4 at the lower end of the market, with plans coming in at HK$ 3,500 – 4,000 at the higher end of the market. International travel insurance premiums are, again, much higher than these with premiums averaging around US$ 640 (HK$ 5,000) for a family of 4; two parents aged between 17 – 36, and two children aged between 2 – 16.

As before, this price is generally for plans which only provide medical insurance coverage. The annual premium for the most comprehensive international travel insurance products, offering protection against the range of umbrella risks included in travel insurance, will likely come in around the region of US$ 1,500 (HK$ 11,700) per year for the same family unit as above.  

Which Type of Travel Insurance Works Best


Annual Hong Kong Travel Insurance for Non-US dominant Travel

In your above situation we would likely recommend a high end Hong Kong Health Insurance plan – an annual premium of roughly HK$ 3,560 for your entire family will ensure the following coverage:

  • HK$ 3,000,000 maximum liability limit
  • HK$ 1,000,000 in medical expenses
  • Emergency Evacuation and Repatriation
  • HK$ 25,000 in Baggage cover
  • HK$ 50,000 for trip cancellation
  • And Much More. 

With frequent trips overseas, even if traveling separately, you would have the convenience of reasonable cover without needing to continually reapply for a new policy each time you go on holiday. As long as your trips are generally less than 30 days in duration each time you travel then this would be the most efficient solution.

However, if the bulk of your travel is to the USA or over 30 days in duration we would generally recommend:

Single Trip International Travel Insurance for US Dominant Travel

If you are taking longer trips to the USA multiple times per year we would normally recommend taking out single trip policies with a high end international travel insurance plan for each journey.

This is due to the fact that the main type of coverage under these policies is:

This means that there is no maximum limit that would apply should you need to make a medical insurance claim under the travel insurance while in the USA, currently the most expensive healthcare market in the world.

As noted earlier, the additional coverage options outside of medical insurance can significantly bump up the overall premium, but the superior medical protection alone justifies the purchase of a single trip international travel insurance product if you are taking a long vacation to America at all.

Get Free Travel Insurance Advice

If you would like to receive any additional information about your Hong Kong travel insurance or international travel insurance options, or if you would like to receive a free travel insurance quotation comparing your coverage options, please Contact CCW Global today.

You can also “ask another question” at the bottom of this page if there is any part of our answer you would like to clarify. 

Answered on: 6 September, 2017 12:57


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