What Do Flying Risks Mean? (part 2)

When losses occur in airline travel, they tend to be catastrophic. Even if the loss results from pilot error or mechanical failure (instead of terrorist attack), the end is usually the same: few, if any, survive. In these cases, health insurance or disability insurance—both worthwhile concerns when it comes to car risks—aren’t important.

There are many formulas for calculating how much life insurance a person needs. But, from the income-replacement perspective, there are two calculations that work for most people:

• replace five years of the insured person’s earned income; or
• pay off mortgages, car loans, consumer debt and other debtsrelated to daily living.

Basic term life insurance will usually cover these needs. Term is the least expensive form of life insurance in most situations.

Some people are tempted to increase their life insurance coverage or buy special insurance if they know they are going to be flying a lot—for business or pleasure—during a given period of time. However, travel life insurance (often marketed through airport kiosks or some on-line travel services) is usually not a very good bargain.

Travel life insurance is different than trip insurance (sometimes called “travel insurance”) offered by some travel agents. Trip insurance protects the cost of your travel and accommodations against illness, disability, mechanical problems or other interferences. If you are mugged in a foreign country while on vacation, travel insurance will help cover your loss.

Also read: What Do Flying Risks Mean? (part 1)

What Do Flying Risks Mean? (part 1)

Nervous airline passengers don’t understand that all travel is risky and safety is a matter of relative risk. In other words, an activity is usually considered safe only as contrasted with some other activity. Absolute standards of safety are hard to establish…and are often more
arbitrary than most people realize.

A few basic measures can improve your odds of surviving an airplane flight. These include:

• stick with commercial airlines;
• make your trips long ones;
• don’t fly in bad weather;
• avoid high-traffic or high-risk airports; and
• pay attention to instructions you get on the plane.

Of course, none of these guarantees you a perfectly safe flight; and it’s hard to follow a set of “basic measures” when you plan a trip and have to rely on others to get you there.

When you have to get from Point A to Point B, you rarely set out to do so with a set of precautionary guidelines. You simply try to get to point B the quickest and cheapest easiest way you can. Think about driving to work; if you have to be there by 9 A.M., you drive during the riskiest time of the day—when everyone else is commuting to work.

So, flying on commercial airlines—and even on commuter airlines— is safer than most people think. And it’s safer in many cases than driving the same distance. But how do you protect yourself against even this relatively reasonable risk?

The aswer is Life insurance. This is because Life insurance can serve many purposes; the simplest is to replace the earning power that you offer your family or other interested parties (business partners, etc.). In this context, life insurance protects against precisely the sort of catastrophic loss that an airplane wreck poses.

Also read: What Do Flying Risks Mean? (part 2)

Thinking About Travel Insurance for Honeymoon

One of the best reasons for you to look into buying a travel insurance policy for your honeymoon is so you have peace of mind should anything go wrong on your trip. There are a number of different kinds of travel insurance policies, and the two of you need to decide which ones are right for your trip.

You can buy travel insurance through your travel agent or from an independent insurance agent. Here’s a brief rundown of the kinds of policies you may want to consider:

• Trip cancellation. Literally what it sounds like—a policy to protect you should you have to cancel your trip. Different carriers have different ideas of what qualifies as a legit reason for canceling, so make sure you find out ahead of time what’s covered and what isn’t.

• Trip interruption. This policy will reimburse your expenses if your trip is altered after it’s already underway. Of course, again you need to see what’s covered (usually illness) and what’s not (usually war or terrorism).

• Emergency travel medical insurance. You may want to purchase this additional insurance if your day-to-day health insurance policy won’t cover you, should you fall ill while traveling.

• Medical evacuation. This kind of policy covers your care and transportation should you be seriously injured while traveling. Truthfully, this policy can be quite expensive and may only be worth thinking about if you’re planning on taking an “extreme” honeymoon, where injuries will be par for the course.

A number of companies offer travel insurance, and their websites are a great place to educate yourself. Two worth checking out are:

www.accessamerica.com

www.travelguard.com

Comparison Shop for the Best Supplementary Travel Insurance

Illness can strike and accidents can happen, even during a very short business trip or recreational getaway. While your health card entitles you to certain out-of-country emergency health care services, the coverage is limited.

It’s important therefore, to consider supplementary travel insurance. However, if you decide to buy supplementary travel insurance, make sure the policy meets your needs. To determine the coverage that suits you best, here’s a snapshot of the information to consider when comparison shopping:

• Policies can vary greatly from company to company and from year to year. Your health, age, the medication you take, the destination and the length of your trip, are all factors that affect the price and the type of costs it will cover. If you’re 70 years of age or older, for example, or have any high-risk health problems, you may have to find an insurance company willing to write a travel medical insurance policy tailored to your situation.
• Read each policy you are offered carefully. You’ll find that different insurance companies have different clauses for pre-existing conditions, medical exclusions, exemptions, and non-emergencies. Make sure you understand the terms and definitions of each one. Ask questions if you’re not sure exactly what a term means, how it applies to your medical history, or how it affects the coverage offered to you.
• Do not make a choice based solely on the policy price. A low-cost policy may be less of a bargain, for example, if it limits the coverage of a medical emergency to just $25,000.

And don’t forget:

• Take your travel medical policy with you when you travelling.
• Keep your insurance company’s phone number and your health card with you.

Insurance Products to Consider when Away from Home

It’s important for all the vacationers, business travelers, cottagers, and snowbirds, to consider the following insurance tips before travelling:

Travel Medical Insurance

Covers you for emergency hospital and medical expenses when out of the province. If an insurance company agrees to cover you for pre-existing conditions, you should get its agreement in writing.

Home Insurance

• Check your home insurance policy for the expiration date and for other "away" requirements. Many policies will cancel coverage if your property is left unoccupied or unattended for extended periods of time.
• Check coverage limits on valuables. Some policies contain limitations for loss or damage to these items if you are away for an extended period, or if you are taking the valuables with you.
• If you’re travelling in the winter, make sure you drain your home’s plumbing before you leave or arrange to have your home inspected on a daily basis by a competent individual to ensure that heat is maintained. Insurance companies won't cover damage that arises from the freezing of indoor plumbing.
• In the winter, arrange for someone to clear snow from your roof. Some home insurance policies do not cover roof collapse due to excess snow.

Automobile Insurance

• Check the effective dates of your driver's licence and validation sticker to make sure they don't expire while you're away.
• If you plan to rent an automobile, check with your insurance company, broker or agent to determine whether you'll need the supplementary insurance coverage offered by rental companies.
• If you plan to take your own automobile and will be out of the country for more than 30 days, be sure to advise your insurance company, broker or agent. Also make sure you have the proper coverage and meet driver’s licence requirements for the jurisdiction in which you'll be travelling.
• If you are leaving your vehicle at home and it won't be used by anyone, save money by suspending certain coverages from the policy, such as collision. Be sure to add the coverages back once you return.
  

Choosing Travel Insurance

There are a variety of types of travel insurance, including trip cancellation, trip interruption, emergency evacuation, accidental death and dismemberment and loss or damage to baggage and personal effects. Millions of dollars are wasted each year by travelers who purchase unnecessary travel insurance or travel assistance policies. Although these products may be valuable to some travelers in limited circumstances, you should check the terms and exclusions of any travel insurance or travel assistance policies carefully before purchasing them.

Buy Only the Insurance You Need

Frequently, several types of insurance are ''bundled" together and sold as comprehensive travel insurance. If, after reviewing this chapter and comparison shopping among several travel insurance policies, you decide to buy some type of travel insurance coverage, make sure you purchase only what you need.

Existing Insurance Coverage

The first question to ask yourself when determining what type of travel insurance you need is: "What kind of coverage do I already have?" In particular, consider the following:

• Your homeowner's or renter's insurance policies may provide liability or baggage and personal property protection while you are traveling.
• Your health insurance policy probably provides at least some coverage while you are traveling, but you need to check the specific limitations and exclusions of your policy.
• Your life insurance policy may cover accidental death or injury.
• Your automobile insurance policy may cover you while you are using a rental car.
• Your credit card may offer some protection, including loss damage waiver when you rent a car, or coverage if you want to cancel or change a flight.

Primary Versus Excess Coverage

Many travel insurance policies provide what is known as "excess" or "secondary" coverage. This means that if any other coverage can be applied to the loss first (such as homeowner's insurance if your personal property is stolen), then the travel insurance will provide coverage only for amounts not paid by the primary insurance, such as deductibles. Some travel insurance policies offer primary coverage, which is most useful when your own coverage is insufficient or has a very high deductible. The premiums you pay for primary coverage are generally higher than for excess coverage.

Beware of the Exclusions

The biggest drawback of travel insurance is that most policies contain a number of exclusionsand travelers often don't learn about the exclusions until they try to use the coverage. Whenever you review a travel insurance policy, check the exclusions and definitions carefully to determine how much protection the policy really offers.

Flying vs Driving

All this talk about auto insurance and the risks related to driving may make you think it’s the most dangerous way to travel. Well…it is more dangerous than most people realize.

One classic misperception about travel is that driving a car is safer than flying in an airplane. In the months after the September 2001 attacks—and particularly during the following summer—many Americans chose to drive to vacation destinations. But, on mediumlength trips, commercial flights—even factoring in the attacks of September2001—are as safe as driving a car. Over longer distances, commercial flights are safer. Some additional statistics:

• For a trip of more than 1,000 miles, flying on a commercial airplane is generally safer than driving a car.
• Since most plane accidents occur on takeoff or landing, the shorter the trip, the greater the risk per mile.
• On a trip of up to 1,000 miles, you’re probably as safe in your car as in a jetliner.
• On a per-mile-travelled basis, U.S. commercial airlines are the world’s safest form of mass transportation.
• Depending on where you live, the drive home from the airport may be more dangerous than the commercial flight.

The terrorist attacks of September 2001 did cause an upward spike in the total number of deaths caused by airline crashes. But not that many people die each year in plane crashes. When you’re dealing with small base numbers, it doesn’t take much to increase odds ratios sharply. Any risk assessment you do is going to be volatile.

Nearly 600 people died in the four jet crashes related to the September 2001 terrorist attacks. By comparison, an extra 100,000 Americans would have to die in car wrecks to have the same impact on auto safety numbers.