Annual Policy or Single Trip Coverage—Which is Better?

When searching for the best travel insurance policy, you should have a basic idea of your travel habits. This will allow you to choose the right policy. If, for example, you know that you’re hiking the Appalachian Trail in the summer and doing a winter ascent of Matterhorn, you should have an idea of what type of coverage you need for both trips. 

If you know you are going to travel several times within a year, an annual travel insurance policy, also known as a multi-trip policy, covers all your trips and can be far most cost-effective. They do, however, have a maximum duration per trip. This is not a substitute for health insurance. If you only plan to travel once in a year, you’re better off sticking with single-trip coverage. 

There are, however, a few additional considerations to make before making this decision. For example, insurance premiums are often based on the oldest traveler. When that individual turns 65, the premium spikes. Think carefully before opting for an annual policy for you or the family. If at least one of the travelers is 65 years old, a separate policy for the older traveler may be the best option. This will eliminate the possibility of everyone else paying a higher premium. However, you should still do the math for your specific policy and ask your insurance provider about age limitations. 

Similarly, the deductible is the amount of money you pay for expenses before your insurance plan stars to pay. The higher your deductible, the lower your premium will be. If a claim is needed, you will be paying much more. If no claim is needed, then your upfront premium cost is lower. If you take out a low deductible, then your premium will be higher, meaning your upfront cost is more but you will end up paying less if you have to make a claim.  

In order to find the right balance of deductible and excess, carefully review your trips. Is one more dangerous than the others? Do you have more experience in one type of travel and less in another? While you may feel confident in your ability to conduct one of your trips unscathed, feeling uncertain about new experiences is normal. If, however, there is an extremely wide gap in confidence, paying for single trip coverage—and opting for a lower deductible for the scarier trip—is a great strategy.