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ISSUE OF MAY 2003  
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Travel Insurance: Security In Your Hands

Charmaine Fernz finds out what's currently on offer to insure you while you are on tour...

Imagine being hospitalised in a strange land and then being landed with a whopping bill, which you would not have been able to pay even if you were in india and had access to your bank account. Chances are your loved ones might have to sell off your home to get you back. Accidents or illnesses are often unavoidable and unpredictability is something travellers have to live with. This is especially true of the corporate traveller. Travel is a part and parcel of his life. It is therefore best to expect the unexpected and take suitable precautions. Thatís where travel insurance comes in.

Coverages Available
Travel policies offer various types of coverages. The options available in the Indian market are as follows.

Flight Life Insurance And Travel Accident Insurance: Flight life insurance usually provides coverage for a single flight. Coverage ends with the end of the flight. Travel accident insurance generally covers travel to and from your destination. It is advisable to opt for one of the above and not both.

Lost Baggage Insurance: If you are carrying valuable items, you should have them specifically insured. Be sure to make an inventory of personal items before and during your trip in the event that your baggage is lost or stolen. The insurance company pays the actual value of your missing bags or items (unlike airlines, which have limited liability). In most cases, the company will also pay for 'essential items' purchased while waiting for the delayed baggage to arrive.

Overseas Health Insurance: Supplemental health insurance may be necessary if your own policy does not cover you during your trip. Based on your travel destination, you may want to include evacuation costs in the policy because evacuation can be very expensive.

Medical Expenses: When you are hit with a hospital, doctor or dental bill overseas, the insurance company will pay instead of you paying cash and seeking reimbursement from your medical insurer back home.

Trip Cancellation And Interruption Insurance: If you have a sudden illness or other emergency preventing you from taking your trip, you may lose your deposit or other pre-payments associated with the trip. Trip cancellation and interruption insurance provides reimbursement for non-refundable prepayments. This type of insurance is generally recommended if you have made a large non-refundable down payment and stand to lose a considerable sum if you do not take the trip.

Overseas Travel Insurance - A Necessity
Overseas travel insurance, simply put, is travel protection. It is a hedge against unforeseen circumstances. Insuring mitigates risks while providing a financial cushion against adverse financial burdens. Says Anurag Edward, product manager - travel, ICICI Lombard General Insurance Company Ltd, “Travel insurance is generally purchased not sold. It is a conscious call on the part of the individual traveller or even the company to procure one for its employees for their trips abroad."

The objective is to safeguard oneself from the risks of accidents, injuries, loss of goods, baggage and a whole range of potential calamities. Why is it so important? If you take just one example, say hospitalisation, overseas medical expenses are at least ten times higher and it will be tough going to pay the bills out of your pocket. Also, accidents and mishaps can occur anytime, anywhere and never with a warning. Therefore, it is important to identify the risks faced and insure oneself. As Gautam Bhagat, national accident and health manager, HDFC Chubb General Insurance Company Ltd puts it, "Travel insurance is nothing but a small price you pay for a huge coverage and assurance." Currently frontline choice of companies selling travel insurance are made up of ICICI Lombard, TATA AIG, Bajaj Allianz, IFFCO TOKIO and HDFC Chubb in the private sector and New India Assurance, National Insurance, United India Insurance and Oriental Insurance in the public sector. In the two odd years post deregulation, the 0private sector has penetrated about 20 per cent of the market while the remaining 80 per cent is being served by public sector units (PSUs). Says Edward, “To penetrate the large PSU domain, we have embraced technology to the hilt and have developed web-enabled online policy issuance modules, which effectively makes the corporate, a master of its own turn-around times as, through this module, the corporate is able to print ‘Confirmation of Availability of Insurance’ at its own end, prior to each trip. And that is what the positioning of Globetrotter, our travel product, is - convenience to fly across the world with ease."

Entering the Indian mindset
Today, apart from buying travel insurance from the insurance agents or the insurance company, the next-door travel agent or a tour operator is also a convenient point of purchase. Buying it directly gives the price advantage to the corporate. Insurance is thus more ‘buyer friendly’.

In the review of the travel insurance options that different brands are providing in the market today (see boxes), it is apparent that the Indian corporate traveller has protection against a huge range of uncertainties. And needless to say, the number of people opting to purchase travel insurance is also on an upward trend. And with the arrival of international insurance companies and private players in the market, competition among those providing this service is also heating with technology being used to make services better. Policy transaction over the Net is clearly one such use of technology in insurance. In India, ICICI Lombard has taken the first step in this direction by introducing a complete web-based module for its corporate policies and is also introducing the same for free individual travellers (FITs). Besides, the company is changing the perception of transactions over the Net being unsafe or insecure. To this end, ICICI has been certified by Verisign for its online security guards against frauds and to ensure safe buy-and-sell over the Net.

Such a range of players and policies has therefore molded the Indian mindset into viewing insurance as a necessity. Travel insurance happens to be one the areas which, though a late starter in India, is catching up fast.

Business travellers have realised that it is better to be safe than sorry.

ICICI Lombard

Globetrotter - Overseas Travel Insurance
ICICI Lombard’s travel insurance product has two sections: Overseas Corporate (Group) Travel Insurance and Overseas Leisure (Individual) Travel Insurance.

Every business traveller is a globe trotter and so the tagline 'Fly across the world with ease' aptly fits the bill. Having got the approval from IRDA on its corporate travel product in January, this year, ICICI Lombard has scrutinised the market well enough to offer its customers, convenience without a thought of worry. Whether it is corporate or individual travel, Globetrotter is a product comprehensive enough to meet the needs of the traveller. The product also covers pre-existent diseases, if they are life threatening. Let's now briefly glance through the features of the product on offer.

Globetrotter - Overseas Corporate (Group) Travel Insurance:
This is a group product for corporate houses and a master policy for all employees by virtue of a single umbrella cover. Two kinds of covers are available: Standard Cover (value for money, comprehensive proposition) and Basic Cover (cost-effective no-frills offer). Bearing in mind that technology is the future, the product stands out with its web-based module. Through this online module, the corporate is able to issue 'Confirmation of Availability of Insurance' for each trip at its own end and convenience. This helps surpass the trifling worries of an insurance agent not being at your beck and call and even sudden emergencies. The premium is calculated day wise and charged for the actual number of days you travel and not on a slab-basis resulting in immense savings for the corporate. The cover is hassle-free with no medical checks required up to 70 years of age and with maximum trip duration of as high as 180 days. The product also offers a vast option of 12 plans, to suit needs of all kinds. Another highlight of the product is that the dependents of the employee are also covered in the same master policy.

Globetrotter - Overseas Leisure (Individual) Travel Insurance:
This product also has two kinds of covers, Raffles and Royal, within which there are individual plans, family plans and annual multi trip plans (only in Royal coverage). This will be available through the travel agent network. The agent will be able to issue the policy online through the web-module.

The Raffles Cover: This product-version is targeted at the cost-conscious budget traveller. This comprises of a no-frills pure-health plan including medical, repatriation and dental cover benefits. The latter two are offered over and above the medical sum insured. The Raffles Family Plan is an option with attractive family pricing. It has the price advantage, providing economic cover.

The Royal Cover: This product-version is 'value-for-money' providing comprehensive coverage spanning across as many as 10 benefits which include, apart from the three benefits mentioned in Raffles Cover above, loss of checked-in baggage, expenses for emergency purchase of essential items in case of an over 12-hour delay in checked-in baggage, loss of passport, accidental injury, personal liability and hijack distress allowance. And last of all, financial emergency assistance, in case you get robbed of your travel funds abroad. Besides this, one also has the Royal Family Plan. In this Plan, parents below the age of 60 years and maximum four children below 17 years are covered at a special family price. A unique feature of this Plan is that the price is independent of age so long as it is within the maximum defined limit. The maximum duration of cover per trip is 180 days for single trip plans and 30-45 days for annual multi-trip plans. Royal Multi-Trip Plan, is an interesting proposition for the frequent small-time business traveller who makes short but multiple trips in a year. He does not have the critical mass in the form of minimum insured number of days to purchase a corporate cover. At the same time, he needs coverage throughout the year and not just for 180 days. The Royal Multi Trip Plans (annual cover), with a defined maximum trip duration, covers such frequent travellers for a full 365 days a year. So, he no longer has to run around prior to each trip, trying to get the single trip cover.

The claims processing of Globetrotter is handled by the Germany-based leading international assistance company, Mercur Assistance (of Munich Re Group - leading Reinsurers of worldwide repute with AA+ Standard and Poor rating ) supported by Mumbai-based Paramount. Globetrotter offers cashless claims settlement.

TATA AIG

TravelGuard SM
TravelGuard SM is a ‘Global Travel Protection’ policy that can be purchased by any resident Indian between the ages of 6 months and 70 years, travelling abroad on business or leisure. This policy requires no medical certification for any individual irrespective of age. However, a declaration of recent medical history is needed. Any pre-existing ailments or medical conditions are not covered under this policy.

Global assistance services for travellers is provided by International SOS, a leading global assistance provider in the world. Currently, TravelGuard SM is offered under three different plans: Plan A, Plan B, and Annual Multi-Trip Plan.

Plans A ad B are single trip plans, where the overseas stay is not to exceed 90 days. On the other hand, the Multi-Trip Plan has been designed specially for the global traveller. Under this plan, one can travel abroad as often as you like and you will be covered, provided each trip does not exceed 45 days.

TravelGuard protection covers reimbursement of accident and sickness related expenses, loss of checked baggage, delay of checked baggage (beyond 12 hours), accidental death and dismemberment (common carrier only), emergency evacuation, repatriation of remains, personal liability, loss of passport.

The other general insurance products of Tata AIG which travellers can avail of are Group Personal Accident Plan which covers groups of individuals against accidental death, dismemberment, permanent total disability, permanent partial disability and permanent total loss of use. Other benefits include accident medical benefits that cover expenses incurred on medicines and doctor consultations even if the member is not hospitalised, weekly indemnity covers the member for loss of wages during the period of temporary disability, accident hospital cash is a per day allowance to cover out of pocket expenses incurred by the member at the hospital where hospitalisation is only due to an accident. In fact, this plan can be customised by choosing the mix of covers and benefits, and comes with the Tata AIG assurance of a claim settlement within seven days of submission of all required documents.

Executive Guard: This policy covers you against accidental death or injury 24 hours a day while at work or at home or while travelling. Under this plan you receive a lump sum compensation, in addition to any other benefits you may receive from other sources. The policy has a unique provision for weekly cash compensation while you are confined to hospital for accident injuries outlined in the policy.

Family Guard: This is an affordable plan that is specially designed for the family in case of accidental death or injury while at home, at work or while travelling. Under this plan one receives a lump sum compensation, in addition to any other benefits from other sources. The policy has the provision for weekly cash compensation of as much as Rs 500 per day while you are confined to hospital for accidental injuries outlined in the policy. This plan offers up to 50 per cent coverage for spouse at lower premiums and 10 per cent coverage for children at greatly reduced premiums.

New India Assurance

New India Assurance has five plans available for frequent corporate travellers. Plans A-1, A-2, B-1 and B-2 are for corporates who travel on leisure or even individual travellers. While Plans E-1 and E-2 are for corporate executives or partners of registered firms.

The details of the plans are as follows:
Plan A-1: For travel to countries excluding USA and Canada for business and holiday with insurance limited to USD 50,000.
Plan-A-2: Same as A-1 except that benefits stand increased to USD 2,50,000.
Plan B-1: For travel worldwide including USA and Canada for business and holiday with insurance limited to USD 1,00,000.
Plan B-2: Same as B-1 except that benefits stand increased to USD 2,50,000.
Plan E-1: For travel worldwide including USA and Canada for corporate frequent travellers (CFT) with insurance limited to USD 1,00,000.
Plan E-2: Same as E-1, except that benefits stand increased to USD 5,00,000.

CFT cover is available for executives of corporate clients and partners of registered firms annually, subject to the duration of any one trip not exceeding 60 days.

An additional add-on benefit for the business, holiday and CFT cover is that in case of a personal accident, compensation is paid to the nominee. Then there is loss of checked-in baggage, delay of checked-in baggage, loss of passport, personal liability.

The premium depends on age-band, trip-band and country of visits. Initially, a cover up to 180 days is provided under the business and holiday plan. Extension is allowed on original policy for a further period of 180 days subject to declaration of good health. The eligibility age limit is from 6 months and above up to 70 years. However, the policy has to be procured bearing in mind that disease/illnesses are not covered (known and unknown). And last of all, the first USD 100 of all claims are to be borne by the traveller.

HDFC Chubb

Overseas Travel Insurance Policy
There are three policies on offer by HDFC Chubb - domestic travel policy, international business travel policy and the annual multi-trip business travel policy, that has been specifically designed for frequent travellers for whom the maximum trip duration is 30 days but can be extended to 180 days. All three policies have the typical benefits like accidental death and permanent disablement cover.

The premium is based on the number of days one travels as compared to a standard slab rate. The optional benefits are emergency medical expenses, travel benefits, baggage delay and loss, flight delay, hijacking, frequent flyer interruption and a lot more. However, the additional benefits are trip cancellation, hotel accommodation, hotel extension and a whole lot more. Says Bhagat, "Through our policies, we educate our customers on insurance. Corporates also have the option of tailor-made insurances. We have introduced a travel card which reduces the hassles of paperwork and provides convenient usage."

Bajaj Allianz

Travel Companion - Corporate Lite/Corporate Plus:
This policy covers personal accidents, medical expenses and repatriation that includes hospitalisation expenses for accidents and illnesses plus medical evacuation whenever necessary. The other benefits are accident and sickness medical expenses (in patient), accident medical expenses (out patient), sickness medical expenses (out patient) limited to a maximum period of first 90 days of travel, emergency evacuation, repatriation of remains and assistance services. Other benefits includes cover for loss of checked baggage, delay of checked baggage, loss of passport, hospitalisation allowance and a lot more. The additional benefits are hospital daily cash allowance, hijack cover and trip delay.

Tips Before Buying A Travel Insurance Policy
  • Even though minimum time frame to purchase a travel policy is five hours, it is advisable to purchase it a couple of days in advance.
  • It is preferable, to procure a policy from an insurance agent rather than rely on a travel agent or a tour operator because they could offer policies with self-serving restrictions.
  • Buy a travel insurance policy for the desired requirement such as medical expenses, baggage loss etc because insurance agents could ensure you assure yourself for all possible vagaries.
  • Always insure yourself for the amount that is necessary.
  • It is also essential for a business traveller to look at the options available through the credit card before purchasing a travel insurance policy.
  • Before taking a policy, ensure that the insurance company spells out every single detail of the policy. Ascertain whether there are any loop holes.
  • Beware of buying a policy on the Internet, unless you are 100 per cent sure.
Private Sector Versus Public Sector

A mother-daughter duo went abroad. The mother had bought a policy from a public sector undertaking (PSU), and the daughter had it from a private sector player. The mother fell ill in Mexico and had to be hospitalised. She was admitted to a hospital affiliated with the PSU. She had to pay her own bills with the expectation that they would be reimbursed later on by the insurance company. She is still engaged in paperwork.

The daughter fell ill in Washington, DC. She had to be shifted to a hospital, which was not even affiliated with the private insurer. But she got her reimbursement within months. The delay, she explains, was partly because of the forex transfer.
This is a classic case illustrating the comparison between the travel insurance policies offered by public sector undertakings and the private players.

So, which product should one choose for quick issuance, less cumbersome documentation, the plans offered and claim settlement?

PSUs have more or less standard plans. While they cover only accident and sickness expenses, hospitalisation, emergency (medical) evacuation, repatriation of remains and baggage loss, the private players also cover the baggage delay, loss of passport, flight delays etc. If there is a delay in take-off by more than 12 hours, one is given US$ 10 for meals.

Issuance of policy in case of PSUs may take anywhere between three-four days. One has to fill out seven to eight pages and get a medical check-up done before one can get a travel policy. On the other hand, in the case of private sector, the procedure is simple and the form is not lengthy. Private insurance policies are designed in such a way that the whole process takes much lesser time.

Says a frequent flier, who is a senior executive, “The premium for a private insurance policy is slightly more than a PSU policy, but the add-ons and value for money is incomparable.”

In case of a PSU policy, you have to be admitted only to an affiliated hospital and settle your own bills, which are reimbursed once you are back in the country. The claim settlement in PSU companies thus takes longer but they say that the process of streamlining is on.

In case you are holding a private insurance policy and need help, all you have to do is to call up the insurer, give your policy number and contact details. They contact you immediately and refer you to the nearest affiliated hospital.

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