Planning a holiday is simultaneously worrisome and exciting. The anticipation of finally being able to take a break from your daily routine is probably what’s motivating you to plan your holiday. And it is human nature to keep the worrisome details for the end. Which is why you probably didn’t think of buying a travel insurance policy.
But hey! Guess what? Your credit card provides complimentary travel insurance. That’s one thing taken care of. But is it really taken care of? Is relying solely on your credit card travel insurance a good idea?
The answer to this question is more complicated than a straightforward yes or no. There are multiple questions that need to be answered before you can make the decision of relying on the travel insurance provided by your card issuer.
How Does Credit Card Travel Insurance Work?
One of the benefits on your credit card is complimentary travel insurance up to S$1 million. Does that mean if anything goes wrong overseas you can raise a claim with the insurance provider? Well, not really. Like with all insurance policies, there are certain terms and conditions that you need to meet before the insurance can kick in.
For example, some cards may require you to charge your entire vacation (including flight tickets, hotel stays, and car rentals) to your card before the policy cover can kick in. Others may be slightly more lenient and may need you to just charge the flight tickets to your card.
Once you meet the criteria set by your card issuer and the insurance company that has underwritten your insurance, it works exactly like how any other insurance policy does.
What About Coverage?
A quick glance at the coverage provided by your card issuer and that provided by an insurance company may have you convinced that the policies are pretty much the same. And for the most part, you may be right. Credit card travel insurance policies provide coverage for almost the same categories as stand-alone policies.
Where stand-alone policies win though, is in terms of the coverage amount. A stand-alone policy will probably provide unlimited coverage for medical expenses incurred in Singapore and overseas. The insurance that comes with your card may have a cap of S$50,000 for medical expenses.
Moreover, depending on the kind of activities you plan to take part in during your trip, you can always add insurance riders to your policy or get one that covers those activities. So, if you plan to indulge in adventure sports or go skiing, you could get an insurance policy that provides coverage not just for these activities but for your sporting equipment as well.
Additionally, while hostage and kidnap coverage is provided by most airlines, they only kick in if you book a round-trip with them. So, if you booked a round-trip to Bali on Singapore Airlines, you will be covered if any such situation were to occur. If, however, your journey from Singapore is via Singapore Airlines and your journey back is by Air Asia, you are out of luck if you have relied on the travel insurance policy that comes with your credit card.
What about pre-existing medical conditions?
It would be safe to say that no credit card travel insurance provides coverage for pre-existing medical conditions. Neither do most stand-alone policies. That being said, there are stand-alone policies that do cover pre-existing medical conditions such as NTUC’s Enhanced PreX Plan.
This is important to consider since most insurance providers will do their best to think of ways to not pay you when you make a claim. There may be a chance of your airline insurance provider denying your claim by citing that an illness was caused by a pre-existing medical condition and since there is no way to know if this is indeed the truth, there isn’t much you can do to refute this. Which is why it is always better to err on the side of caution.
What about family coverage?
Travel insurance policies that come with your credit card, in most cases, cover only the principal cardholder and in some cases the supplementary cardholder. There are some policies that even provide coverage for the spouse of the principal cardholder as well as one child. These cards, however, are mostly premium credit cards. But even then, there may be conditions such as having to charge your spouse’s tickets to your card.
Stand-alone travel insurance policies, however, provide coverage for dependents you are travelling with. In fact, if you are going on a holiday you can purchase policies that provide family coverage.
Area restrictions
When you decide to purchase a stand-alone policy for your trip overseas, you will have to specify the locations to which you are travelling to. As a result, the cost of the policy may change based on the destination. Some companies may even refuse to provide you with coverage if you plan on travelling to countries where there is civil strife. In such cases, you are probably better off with the travel insurance provided by your credit card company.
So, can you rely on credit card travel insurance?
If your question is can you use the travel insurance policy provided by your credit card, then the answer is yes. However, whether you should use it is entirely dependent on the coverage provided and the type of coverage you are looking for.
If you are in good health and aren’t expecting any major trouble while travelling, then you can rely on the travel insurance provided by your card issuer. If, however, you are travelling with family or plan to travel for extended periods of time, you would be better off with a stand-alone insurance policy. You can customise it and even get protection for categories that your credit card insurance policy will not cover.
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