Is Travel Insurance Worth It in 2025? A Cost-Benefit Analysis
Understanding the Need for Travel Insurance
Travel has inherent hazards, even if it's fun. Unexpected events, such as medical crises, cancelled travel, misplaced bags, or natural calamities, can throw off your schedule and cause significant financial losses. Travel insurance exists to reduce these hazards. According to a 2024 Berkshire Hathaway Travel Protection poll, 34% of passengers had a travel issue; airline cancellations or delays were the most frequent.
Cost of Travel Insurance
Travel insurance usually costs between 4% and 10% of your travel expenses. Your age, location, travel length, and coverage restrictions, among other things, affect the premium. A surcharge for a $3,000 vacation ranges from $120 to $300. Including a "Cancel for Any Reason" (CFAR) option will raise the premium by about 40% to 50%. Squaremouth's data shows that in 2024, the typical travel insurance coverage will cost $308.
Travel insurance provides financial security as well as peace of mind. Important covers comprise:
*Trip Cancellation/Interruption: If you have to postpone or cancel your trip for covered reasons—such as illness, injury, or death of a family member—this covers non-refundable trip expenses. For instance, oneTrip Prime from Allianz Travel Insurance offers up to $150,000 for trip interruption and $100,000 for trip cancellation.
Travel insurance can cover hospitalization, doctor visits, and even emergency evacuation if you have an emergency overseas. The medical evacuation coverage offered by HTH Travel Insurance covers up to $500,000. This is crucial as most home health insurance policies exclude coverage abroad.
*Baggage Loss/Delay: This covers the cost of essential items you might need to buy and reimburses you for lost, stolen, or delayed baggage. Seven Corners plans provide up to $600 for baggage delay and $2,500 in baggage loss protection.
*Travel Delay: If your flight is postponed for a covered reason, like bad weather, you may be paid for lodging and food. John Hancock insurance pays up to $750 for postponed travel.
Many plans provide 24/7 assistance services to help with things like rebooking flights, medical care, or passport replacement loss.
Real-World Examples
Think through these situations where travel insurance would be somewhat helpful:
A sudden sickness causes you to postpone a $5,000 non-refundable cruise. Travel insurance would pay you back the cost of the missed vacation.
You have a medical emergency abroad and pay $25,000 in hospital bills. Your vacation insurance pays for the costs.
Since your luggage disappeared at a business conference, you must buy fresh clothes and cosmetics. Baggage coverage pays you back the cost.
Factors Affecting Travel Insurance Value
Whether travel insurance is worth it will rely on several elements:
*Trip Cost: The higher the trip cost, the more valuable travel insurance becomes, as the potential financial loss is more significant.
* Destination: Travel insurance is more advised for international visits, particularly to nations with high medical costs, than for domestic journeys.
Older visitors or those with pre-existing diseases could find the medical coverage element more beneficial.
*Trip Activities: Specialized coverage may be required if you want to engage in daring pursuits such as scuba diving or skiing.
Before buying a separate policy, determine whether your credit card or homeowner's insurance provides trip protection.
Types of Travel Insurance Plans
*Single-Trip Plans: Designed to span a single trip for a designated length, these
Often a more affordable choice for regular travellers, multi-trip/annual plans cover several journeys throughout the year. A Travelex multi-trip policy may start at $163.
*Specialized Plans: These address particular needs, such as pre-existing condition coverage, student travel insurance, or cruise insurance.
Choosing the Right Travel Insurance Plan
Scrutinize insurance from several companies, weighing coverage restrictions, exclusions, and consumer comments. Search for an insurer with an A.M. Best rating of "A—" or above, which indicates financial consistency.
| Provider | Plan Name | Annual/Single Trip/Other | Trip Cancellation | Trip Interruption | Medical Coverage | Medical Evacuation | Baggage Loss/Delay | Travel Delay | Pre-existing Condition Waiver | Cancel For Any Reason (CFAR) | Other Notable Benefits/Features | Average Cost or Range |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Squaremouth (aggregator) | Multiple | Single, Annual | Varies | Varies | Varies | Varies | Varies | Varies | Varies | Varies | Comparison tool; Zero Complaint Guarantee | $308 (Average Comprehensive) |
| Allianz | OneTrip Prime | Single, Multi, Rental Car | Up to $100,000 | Up to $150,000 | $50,000 | $500,000 | $1,000/$300 | $800 | Yes (within 14 days) | Optional (80%) | Child 17 and under covered free, 24/7 assistance, concierge; Epidemic Coverage Endorsement | Varies; Higher than average |
| Allianz | Various | Single, Annual | 100% | 150% | Up to $500,000 | Up to $500,000 | Included | Included | Yes (within 14-21 days) | Optional (50-75%) | Rental car, pre-existing conditions, Cancel for Work Reasons | 4-10% of trip cost; CFAR adds ~40% |
| AIG (Travel Guard) | Essential, Preferred, Deluxe | Single, Annual, Pack N' Go (same day), Rental | Up to 100% | Up to 150% | Up to $100,000 | Up to $1,000,000 | Included | $1,000 (after 5 hours) | Yes (within 15 days) | Optional (50%, on Preferred and Deluxe) | Child under 17 covered, customizable, Pet, Adventure Sports, Wedding Cancellation add-ons | Varies |
| American Express | Various | Single, Build-your-own | Included | Included | Emergency medical and dental | Included | Included | $300/$500 (6+ hours for Platinum/Mid-tier, 12+ for others) | Yes (within 14 days) | No (Trip Cancel Guard covers 75% of flights) | Customizable, car rental, 24/7 assistance; card not required | Higher than average |
| Faye | Single-Trip | Single | 100% | 150% | $250,000 | $500,000 | $2,000 per trip / Included | $300/day; $4,500 max (after 6 hours) | Yes (within 14 days) | Optional (75%) | Digital claims, pet care, vacation rental damage add-ons | Higher than average |
| GoReady (Aegis) | Choice, other single & multi-trip plans | Single, Multi, Cruise | 100% (up to $50,000) | 150% (up to $50,000) | $50,000 - $500,000 | $250,000 | $500/$200/day (12+ hour delay) | $200/day; $2,000 max (after 6 hours) | Yes (within 14 days), optional add-on for basic plan | Optional (75%) | Cancel For Work Reasons upgrade, customizable, No age limit | Varies |
| Nationwide | Choice Cruise, other Cruise, Single, Annual plans | Single, Annual, Cruise | 100% | Up to 150% | $75,000+ | $250,000+ | Included | Included | Yes (within 14 days) on Choice/Luxury plans | Optional | COVID-19 as trip cancellation, rental car and AD&D add-ons; Annual plans from $59 | Varies |
| Seven Corners | Trip Protection Elite, other Single, Annual, Student plans | Single, Annual, Student, Travel Medical | 100% (up to $30,000) | 150% | $10,000 - $500,000 | $100,000+ | $2,500/$600 (12+ hour delay) | $1,500/day (after 6 hours) | Yes (within 20 days) | Optional (75%) | CFAR and Interruption for Any Reason add-ons; cruise, sports, events, rental car add-ons; Coverage up to age 99 | Varies, Average $260 on Squaremouth |
| Travelex | Basic, others: Travel Select, Travel Basic, Flight Insure | Single, Multi | 100% | 150% | $15,000+ | $500,000+ | Included | Included | If purchased within 21 days. Varies by state | Optional | Rental Car Damage, Adventure Activities, Pet Care, Cancel for Business Reasons add-ons | Varies |
| Travel Insured International | Worldwide Trip Protector (Essential, Deluxe, Platinum), others single & multi-trip | Single, Multi, Cruise | 100% | 150% (on Deluxe, Platinum) | $50,000-$500,000 | $200,000-$1,000,000 | $750+ / $200 (12+ hour delay) | $100/day; $500 max (12+ hour delay) | Yes (within 21 days) | Optional (75%) | Job loss, events, electronics add-ons; Lower rates | Varies, Average $90 on Squaremouth |
| World Nomads | Explorer, Standard | Single | Up to 100% | Included | Up to $100,000 | Included | Included | Included | If purchased within 7 days of initial trip payment and you are medically able to travel at the time of purchase | No | 300+ sports and activities covered, Post-departure purchase | Varies |
| WorldTrips | Atlas Travel Medical, others single and multi-trip | Single, Multi | Included | Included | Up to $1,000,000 | Up to $500,000 | Included | Included (5+ hour delay) | Yes (within 14-21 days, depending on plan) | Optional (50% or 75%, depending on plan, varies by state) | 25+ years in business, missed connection benefit (3+ hours), 24/7 assistance | Average $86 on Squaremouth |
