Travel Insurance Terms

Here are some important insurance terms and their meanings:

Insured/policy holder: The person or group covered by the travel insurance policy

Beneficiary: The person or persons named in the policy as entitled to receive the benefits upon the death of the policy holder

Benefits: The amount the insurance provider pays the beneficiary when a claim is filed

Maximum policy coverage: Maximum compensation that the insurance company will pay for the expenses covered by the plan

Insurer: The travel insurance company that issues the insurance policy

Travel insurance agent: The company or broker that represents the travel insurance company and sells you the travel insurance policy

Insurability: Acceptability to the insurance company that you qualify for insurance.

Application for insurance: The form on which you provide information about yourself as required by the insurance company. You may be also need to have a medical examination. The insurer uses your medical information and that in your application form to decide your insurability and the rate at which it will be available to you

Unforeseen incident: an event that is not expected or anticipated and which takes place after the insurance policy comes into effect

Trip cancellation: When you cancel your trip, you don't travel at all. Your travel insurance fully covers trip cancellation

Trip interruption: If you have begun your trip, but have to cut it short for some reason or the other, it means your trip has been interrupted. Your insurer will reimburse you for the part of the trip that did not take place

Cancel for any reason: Travelers can opt to purchase a plan which allows them to cancel a trip for any reason. They can then claim non refundable trip payments and pre-paid trip deposits for any reason not covered under standard trip cancellation, including loss of a job, bad weather, political instability in the destination, and so on.

Primary versus secondary coverage: Primary coverage is that which your insurance company pays first, before any other coverage that you have. Secondary coverage is that part of your policy that will pay when your primary coverage has been used up. For example, if the primary insurance pays its share and covers 80 per cent of your claim, the secondary section of your plan will pay the rest up to its coverage limit.

Initial/first trip payment date: The date you made the first payment for the trip you want to insure

Pre-existing medical condition: Any medical condition for which treatment was recommended or received during a specified period before your insurance policy became effective. Travel insurance companies define pre-existing conditions differently. Some do not offer coverage for these conditions and come with a pre-existing medical condition exclusion

Look back period: This is the period that the insurance company will ‘look back’ from the date you bought your policy to review your medical history for pre-existing conditions. The look back period varies among companies and could range from 60 and 180 days to even one year. Any symptoms, tests or visits to the doctor within this period would be considered pre-existing

Pre-existing medical condition waiver: If your travel insurance plan has a medical condition waiver, it means you would get coverage for pre-existing medical conditions. The look back period does not apply. To be eligible, you have to buy your travel insurance plan within the given period of your initial trip payment date

Contestability, contestable clause: When you buy a policy, you and your insurance company agree to the terms specified in it. The contestable clause in the policy gives the insurance company the right to cancel your coverage and return your premium if it finds that you have provided wrong information regarding your eligibility. Usually, the period during which coverage can be canceled is within the first one to two years. After that, the insurance company can not contest the policy

Financial default: If the tour operator, airline, cruise line or hotel you are booked with goes out of business and your trip is cancelled or interrupted, financial default cover in your travel insurance plan would pay for the financial losses you may suffer. To gain the benefit, purchase your policy within the period that your insurance company specifies. Coverage usually begins after a waiting period of 7-30 days

Annual multi-trip plan: Covers all trips made within a year

Deductible: The amount you have to pay before the insurance company starts making payment. This amount could be based on the period of the plan, paid yearly or on the basis of an incident

Co-insurance or co-pay: It is the percentage of ‘eligible expenses’ or the share your insurance company will pay or after you meet the deductible. While some travel plans pay 100% after the deductible, others may have no co-insurance

Emergency evacuation: Coverage for the expenses of transporting the traveler to a place for immediate medical attention

Repatriation benefit: Coverage for the costs of preparing and sending the body of a deceased person to the home country

Non-refundable travel expenses: That which your plan will not reimburse such as pre-paid expenses for accommodation and flight tickets

Exclusions: All insurance plans will have exclusions or expenses that they will not cover, for example, expenses relating to participation in adventure or high-risk sports, loss/theft of baggage because it was left unattended, pre-existing medical conditions, self-inflicted injury, and so on. Policies should be read carefully for exclusions

Hazardous sports and activities coverage: Plans that offer such coverage reimburse medical expenses incurred to treat the beneficiary in the event of injury caused by taking part in hazardous sports and activities like rock climbing, scuba diving or sky diving

Individual and family plans: Individual plans cover only one person. Family plans are usually available at discounted rates and cover all members of the family that is traveling

Lost baggage/luggage: Secondary coverage paid for luggage that is permanently lost