Traveling is loads of fun. You get to see new and exotic places, meet new people and learn new things. It helps you take a break from your daily routine and relax in new surroundings away from everyday stress. But it can also be a nightmare, more so if you go without proper travel insurance. And the most important insurance while traveling outside of your country can be travel medical insurance.

So should you buy travel insurance? Some people are so attached to it that they buy insurance for even the shortest travel while other completely detest it. As with any other form of insurance there are many different types of travel insurance, some better than others.

When you buy any sort of travel insurance, the premium you pay gets allocated several different ways. Some of it goes as commission to the person selling it to you. Some of it goes to cover the administration costs of creating your insurance policy and recording it. Some of it goes as profit. And some of it goes to actually cover the risks you’re insuring against.

It is always advisable to go in for a wholesale travel insurance policy against a retail one because the former provides you with nearly double the risk/benefit coverage. So what is the difference between retail and a wholesale policy? A retail policy is one in which you personally fill in an insurance application form and apply directly to the insurance company by making the premium payment.

A wholesale policy on the other hand is taken out by tour operators and covers more than one person/traveler under the policy. So instead of paying an insurance company directly, you pay the tour operator the premium amount. The benefit of this is the insurance company reduces its overheads, which is then converted into extra benefits for you.

Another way to look at travel insurance is the choice to be made between a single trip policy and an annual one. The annual one might be costlier to start with; but if you are a frequent traveler, it makes sense to buy the annual option since it gives you coverage for as much travel as you might do during the entire year.

One more important point of distinction in travel insurance is the type of cover provided - primary or secondary. It you get primary cover, the insurance company will pay all necessary costs when claimed. But under a secondary coverage, the insurance company will require you to make all possible claims from your other insurance policies and only then entertain any claims to them. That way, it has to pay that much lesser. Needless to say, primary cover is better than secondary cover!

Finally always remember to check out what is covered under your travel insurance and what is not. It is always advisable to opt for the most comprehensive policy that covers everything from flight and trip cancellations to loss of baggage, delay in flight timings, and theft of belongings as well as medical expenses incurred. Unless all of these are covered, buying a travel insurance policy will not be effective enough.

By Ian Koch