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The Pros (and Cons) of Annual Travel Insurance

How to determine if an annual policy is right for you.

For the traveler that’s constantly on the go, an annual travel insurance plan can certainly be a cheaper and easier way to make sure you’re covered for accidents and illness no matter where you are. But while annual travel insurance plans make for an easy, once-a-year purchase, how do you know that you’re getting the best coverage for your needs? Does an annual plan really take into consideration everything that could go wrong while traveling?

Purchasing an annual travel insurance plan takes as much consideration as purchasing any other policy. Before you put your hard-earned money on the line, take a look at the general pros and cons of adding a yearly plan to your packing list.

The advantages of an annual travel insurance plan

  • One of the great things about annual travel insurance is, once you’ve made your purchase, you’ve got coverage wherever you go around the world for the entire year. This core benefit alone can save you money immediately! Instead of buying a different policy for each of your travels, an annual policy covers you whenever you get the urge to get up and go. Because of that, this type of policy is great for frequent international visitors and business travelers who take more than three trips per year.
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As Allianz points out, the benefits that come with an annual travel insurance plan are unilateral for the entire yearThis means that, while you’re on the road, you’ll be guaranteed the same level of benefits that you initially purchased at the beginning of your term. This cuts down any confusion or lapses in coverage that would have come with buying an insurance policy for every trip you take.
  • In addition to the simplicity and savings, an annual insurance plan offers many of the core benefits of a traditional travel insurance plan. In addition, some annual insurance plans can extend some of your benefits while you’re in your home country! This includes benefits for trip delay, trip cancellation, as well as baggage loss and medical benefits for your travels around the world.

The disadvantages of an annual travel insurance plan

  • One of the major disadvantages that comes with an annual travel insurance plan is that your coverage per trip may have a time limit. Many popular annual travel insurance plans stipulate that a covered trip cannot exceed 90 days. If you plan on being away from home for more than three months at a time, you may want to consider a long-term travel medical plan.
  • While an annual travel insurance plan suggests that you would be covered every time you’re away from home, there are also stipulations on how far from home you have to be before your coverage takes effect. In the case of Travel Guard’s popular annual travel insurance policy, you have to be at least 100 miles from your home before your travel insurance policy takes effect. So while most international travel would be covered, international destinations closer to home (like Canada or Mexico) might not have the same coverage.
  • While an annual travel policy may offer a lot of the same benefits as a traditional travel insurance plan, there could also be some core shortcomings that you might not be aware of. Annual travel plans might lack or have reduced key benefits, such as coverage for sports and hazardous activities (including skiing), as well as Cancel for Any Reason or Cancel for Work Reason benefits. Make sure you understand all the coverage levels before you pick a policy for you.

An annual travel insurance policy can be the right purchase for frequent travelers, but only when you understand all the coverage levels involved. Getting the right information up front can ensure you get the right coverage for your adventures, no matter where life takes you!

Note: No compensation nor incentive was given to mention any product or service in this article. The author and/or About.com do not endorse nor guarantee any product, service, or brand mentioned in this article, unless otherwise stated. For more information, see ourEthics Policy

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