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Get travel cover for peace of mind

It can protect you from risks of overseas trips, and save you a huge sum of money.

Check benefits and level of coverage given

Before you pack your bags and fly off, do not forget one essential item - travel insurance.

Buying a policy has never been easier and it could save you tens of thousands of dollars if your dream holiday suddenly turns into chaos.

But like any form of insurance, it pays to know what you are buying and what exactly the policy covers.

Travel insurance trends

Singaporeans are getting away more frequently than ever, thanks in part to the boom in budget airlines and rising affluence.

Ms Annie Chua, senior manager, personal lines, NTUC Income, said departures from Singapore jumped to a record high of more than eight million last year, well up from about 6.8 million in 2008.

Travel insurance sales have also grown, by 8 per cent to 10 per cent a year on average, in the last five years.

On average, insurer AIG issues more than 40,000 travel insurance policies per month.

Roughly speaking, a travel insurance single-trip policy for one person - for a one-week trip to an Asian city - could range in cost from about $30 to $50 depending on the coverage.

And more consumers are buying higher premium travel insurance, which provides better medical and travel benefits to destinations such as Europe, Japan and Australia.

DBS Bank's head of consumer investment and insurance products, Mr Brandon Lam, said: "On average, Singaporeans travel up to four times a year. With an increasing number of budget flights available in recent years, there is also an increase in the number of travellers who go for free-and-easy holidays."

With package holidays, insurance is almost always included in the price - but for free-and-easy trips, it is up to you to buy it.

Last year, almost half of DBS TravellerShield policies bought, were for coverage in Asia, and more than 60 per cent were for trips of five to 14 days, he added.

Changing travel tastes

MSIG Insurance (Singapore), which underwrites TravellerShield, added that more travellers are going to exotic places and those farther away.

The firm said it has noticed a greater level of awareness of the risks and hazards of overseas travel.

High-profile disasters are etched into the public consciousness - such as the 2004 tsunami across the region and the 2011 earthquake and tsunami in Japan, which caused the Fukushima nuclear crisis.

Travellers are also more aware of the risk of transportation delays, air disasters, political unrest and threats of terrorism, among other worries.

Insurers can sometimes be flexible in applying policies.

In 2011, NTUC Income's travel policy covered trip cancellations to Japan occurring within 30 days of the March 11 catastrophe.

But the insurer later extended the date for trip cancellation to a period within 30 days of April 14, the date of the last aftershock.

Ms Chua said: "Policyholders who did not wish to travel to Japan, due to the effects of the nuclear radiation, were allowed to claim for trip cancellation even though this was not provided for in the contract.

"Some 400 claims totalling $200,000 were paid out for claims relating to Japan's earthquake."

Easy to buy

Given all the possible calamities, jetting off to your next destination without travel insurance is risky.

And buying this coverage can be as simple as using a mobile app - an option offered by DBS TravellerShield.

The policy can also be bought at DBS Bank and POSB branches, ATMs and AXS stations.

You may even buy travel insurance from banks when you pay for the air ticket using a credit card.

But DBS' Mr Lam urged travellers to find out more about the insurance offered by credit cards.

Otherwise, you might end up with just a personal accident travel insurance plan "which pays a sum of money if the insured person dies or suffer disablement due to an accident only", he said.

Be aware of your needs

As with any insurance product, travel insurance also depends on your needs, which means that you should look out for the benefits and the level of coverage offered.

An AXA spokesman said travellers should look out for key features such as:

  • Medical expenses including overseas hospital allowance and emergency medical assistance and evacuation;
  • Access to a 24-hour assistance hotline;
  • Coverage for the loss of money;
  • Coverage for the cost of obtaining replacement travel papers if original documents are lost due to theft;
  • Rental car excess; and
  • Trip cancellation.

Extreme sports coverage

The spokesman said coverage might even include certain types of sports for more adventurous travellers.

For example, AXA's SmartTraveller covers sports such as bungee jumping, skydiving and parachuting.

Mr Lam said it is a myth that travel insurance does not cover potentially hazardous sports activities.

He added: "Most travel insurance offers cover for leisure sports and, in some cases, hazardous sports such as rafting, bungee jumping, skydiving and mountaineering, provided you are not engaged in it as a profession."

However, do check with your insurer in case there are specific exclusions when it comes to sports.

Mr Derek Low, executive vice-president, personal lines, Liberty Insurance Singapore, noted: "With a recent trend of Singaporeans embarking on trips to exotic places and adventure trips such as mountain climbing and trekking, there has been a notable increase in annual travel plan purchases, as compared to single-trip purchases. It is of great importance to have the appropriate travel insurance when going on such trips."

Annual travel plans make sense for frequent travellers, so you can consider one which provides cover for unlimited trips.

Liberty's annual travel plans start from $200, and this depends on the limits of indemnity and area of travel.

On the other hand, when it comes to shorter trips such as a day trip to Johor Baru, Mr Low recommended one-off travel insurance especially for those driving in, if you do not already have an annual travel insurance plan.

He said: "Motor insurance will cover theft of car, but it would not cover the loss of personal belongings within the car such as wallets or laptops. This is where travel insurance will come in handy."

Pre-departure benefits

Once your travel plans are firmed up, the next step has to be buying travel insurance so that you can enjoy what NTUC Income's Ms Chua calls the "pre-departure trip cancellation benefit".

She explained: "This is a standard feature found in most travel insurance plans that will reimburse you the non-refundable portion of your package, hotel or airfare paid in advance, should you be unable to start your trip due to serious illness, injury, death of a family member or travel companion, or closure of the travel agency.

"Travellers start to enjoy this benefit once they purchase their travel insurance, even if it's months before their trip."

For example, you can buy the DBS TravellerShield up to 182 days - about six months - in advance, while insurer Liberty allows for purchase up to four months prior to the travel date.

The claims process

The most common claims made, said Citibank's head of credit payment products Jacquelyn Tan, are for overseas medical expenses, trip cancellation and travel inconveniences such as travel delay and lost or damaged baggage.

Losing items is always a traumatic experience, but stay calm and follow these steps given by OCBC Bank's head of bancassurance Evelyn Yeo.

First, take note of the exact time, place and circumstances of the loss. Then, file a police report immediately after discovering the loss and keep a copy of the report.

Once you return home, get a copy of the claim form from your insurer and complete it.

Also, attach receipts of the lost items where possible to substantiate the amount claimed, and submit them to your insurer, she said.

Having travel insurance will certainly give you peace of mind as you enjoy your vacation, because you never know what may happen.

No one knows this better than 33-year-old lecturer Aaron Yuen.

In December 2006, on the second day of his South Korea trip, he went skiing on the slopes of a scenic resort in Incheon, near Seoul.

He took a wrong turn and ended up breaking his left femur or thigh bone and tearing his left knee ligament.

Mr Yuen said: "They brought me to a hospital in Seoul, where I stayed for about three to four days. No treatment was done there, just X-rays.

"I spoke to the international SOS, which arranged through the insurance company for medical evacuation on a commercial flight. I was bedridden and had to be transported on stretchers as my left leg was swollen."

Thankfully, he had purchased travel insurance with AIG, which covered his medical expenses in Seoul and most of his warded stay in Singapore, which he estimated to be between $20,000 and $30,000.

It also helped foot part of the bill for rehabilitation and physiotherapy a few months down the road.

Before the accident, Mr Yuen never saw travel insurance as a must, and he bought it for the South Korea trip only because everything was done at a travel fair.

Without travel insurance, he would have been slapped with a hefty bill and would have faced a difficult time returning home.

He said: "It used to seem less important to me but now every time I go on major trips, especially those that involve flying, I will definitely get travel insurance. These days, it's very convenient."

rachaelb@sph.com.sg