Subscribe to the our newsletter to receive latest news straight to your inbox.
Did you know that certain credit cards come with complimentary travel insurance? In this guide, we walk you through all that you need to know about credit card travel insurance – what is it? Is … Read More
Did you know that certain credit cards come with complimentary travel insurance? In this guide, we walk you through all that you need to know about credit card travel insurance – what is it? Is it worth it? How to claim it and more.
A vacation – especially an overseas trip – brings joy and excitement. Everyone looks forward to exploring, relaxing and enjoying with friends and family at new destinations.
But, there are plenty of things that can go wrong on vacation – delayed or cancelled flights, lost luggage, cancelled hotel accommodations, a medical emergency and more. Any of these events can cause your plans to go awry, making you spend a ton of extra money in a foreign land.
Luckily, travel insurance can help you save money and provides you with a safety net if something goes wrong on an overseas vacation. The best premium credit cards and exclusive travel cards offer complimentary travel insurance. These cards reimburse you the costs of a lost/delayed baggage, accommodation costs due to a flight cancellation or delay. They even provide you with the money to return home if your trip is cut short due to a medical emergency.
It’s a travel insurance policy that is offered for free along with your credit card. Note that not all cards offer this feature. Only premium cards and travel-specific cards offer complimentary travel insurance.
You can use the insurance to reimburse the costs of an emergency you encountered while on vacation. Having a credit card with travel insurance means you don’t have to purchase a standalone travel policy before going overseas.
Most cards that offer complimentary travel insurance coverage provide the following benefits:
*Note that the actual coverage and extent of coverage depends on the type of credit card you hold. Most credit cards have limitations and exclusions for various coverage. So, make sure to check the benefits on your card to find the actual list of coverage included on it.
Filing a claim with your credit card company is hassle-free. All you have to do is contact your credit card company’s customer care team, connect to the insurance department, and notify your claim.
*Ensure that you’re aware of the claims process beforehand to not feel lost during an emergency.
The coverage offered by credit card travel insurance is not only equal to standalone travel plans but very often even better. With a premier card, you can enjoy extensive coverage that will keep you covered against all emergencies during your overseas trip.
One of the biggest drawbacks of regular standalone travel insurance is that it is applicable only for a specific trip. For example, suppose you’re going on a 5-day vacation to Singapore. In that case, the travel insurance plan you purchase is relevant just for this trip. It won’t cover your subsequent trip to Dubai or elsewhere.
Unlike standalone travel insurance plans, credit card travel insurance isn’t tied to a specific location or trip. You can go on any number of trips and anywhere, without the need to purchase separate travel plans for each trip.
Credit cards that come with travel insurance also offer other travel-related perks like complimentary lounge access, priority boarding and disembarking, extra luggage allowance and more. You can also book partner hotels and activities at special prices using the card.
Complimentary travel insurance is available only with premium cards. To qualify for these cards, you have to show proof of high income. Once you get the card, you will also have to pay hefty annual fees.
*The high annual fees are worth it if you’re a frequent traveller who goes on multiple trips overseas. Taking a different travel insurance plan for each trip is more expensive than the annual fee you pay on your card. So, you might end up coming out even if you’re a frequent traveller.
If you don’t settle your credit card outstanding balance on time, then you will have to pay high interest on the credit card debt. Though this applies to all cards, it’s a point to keep in mind before choosing a credit card with high annual fees, just to avail of the free travel insurance plan that comes along with it.
Just having a credit card with complimentary travel insurance isn’t enough. You have to book your travel expenses – flights, hotels and other activities – on it to activate the free insurance plan. Generally, most credit cards set a cut-off amount that you have to spend on the card to activate the travel plan. This can put a dampener, especially if you’re looking to go on a budget trip or book your travel expenses using cash or other methods.
Some card providers require you to activate the travel plan before you set on your trip. You will have to notify the card company regarding your upcoming trip so that the travel plan can be activated. If you forget to activate the plan, then you will not be eligible for coverage.
*Make sure to check if your card requires activation beforehand to not miss out on the coverage.
Credit card travel insurance doesn’t cover domestic trips. So, if you’re looking to explore India, then you need to take a separate standalone travel plan that offers coverage domestically.
Credit card travel insurance has both pros and cons. It is indeed a great perk to have. It can offer extensive coverage, even better than standalone travel insurance policies.
The downside is that – you have to pay a higher annual fee on your credit card to get it. Similarly, there are also other conditions that you have to meet to be eligible for it. For instance, credit card travel insurance is applicable only on flights and hotels booked using that card. Also, you may have to spend beyond a particular cut-off amount (say Rs. 1 lakh) on travel expenses to activate the travel insurance that comes along with the card.
As always, you should read the fine print to decide whether it’s the right choice for you. Make sure to go through the travel coverage offered by the card carefully before applying for it. Do the math. Calculate the annual fees that you pay for the card, limitations and exclusions, to see if it will help you save money in the long run.
If the costs you pay for the card is higher than a standalone travel insurance plan, then it’s better to go for the latter. Before you choose a premium card for the complimentary travel insurance it offers, make sure that you’re getting the best deal on it. If not, you can always opt for a standalone single-trip or multi-trip travel policy to reduce the costs.