Tuesday, October 13, 2009

WITH the three-day holiday coming this weekend, you may be thinking of taking a trip. Should you buy travel insurance? If so, which offers the best value for money?

I've done some research to help you decide.
Who sells travel insurance? Do you really need it?
All the major insurers sell travel insurance including NTUC Income, GE Life, AIA, AXA, HSBC and Tokio Marine.
Like other insurance, it involves the same pooling concept: A group can absorb an unexpected loss more easily than an individual. It is worthwhile.
Who offers the best deal?
In the Asean region, the clear-cut winner is NTUC Income's Classic Plan.
Asean includes the big three destinations: Malaysia, Indonesia and Thailand. It also includes Philippines, Vietnam, Brunei, Cambodia and Laos.
The seven-day cost is $30 for adults and $7.50 for children under 21 years of age. It is about 25 per cent less than competitors.
Outside of Asean, NTUC Income has raised its premiums from 1 Jul.
Its seven-day charge for 'worldwide' destinations is $61 for adults and $15.25 for children. It is double the Asean rates but in line with what its competitors charge.
One possibility is that higher worldwide rates reflect the 'ability to pay' of wealthy persons who can afford longer trips.
The expenses and risks for that insurance would not seem to justify the much higher premiums.
It means worldwide travel insurance is probably over-priced compared to Asean, which is a bargain.
What are the major items covered?
NTUC Income's Classic Plan covers medical expenses up to $250,000. It includes treatment for the H1N1 virus if contracted abroad.
Other big payments are for death, permanent disability and emergency evacuation due to accidents overseas.
Keep in mind that you may already be covered under your medical or personal accident insurance. It so, the travel insurance is less necessary.
What other claims are allowed?
You can claim up to $3,000 for loss of travel documents, $250 for loss of money and $100 for emergency phone call charges.
If you rent a car and have an accident, NTUC Income's Classic Plan will pay for the auto insurance excess (deductible) up to $500.
The policy also covers you under some highly publicised but low probability events like a terrorist attack or riots. Claims limits are $150,000 for adults and $25,000 for children.
Small but useful benefits are trip cancellation should you fall ill and up to $100 for an overbooked flight or a missed connection.
The policy will also reimburse lost baggage up to $3,000. That includes up to $500 for any one item except for a laptop computer, for which you can claim up to $1,000.
You may also claim $200 for each six-hour period of delay in receiving your baggage up to a cap of $1,000.
What are the restrictions on travel insurance?
NTUC Income's Classic Plan has the usual exclusions such as war, pre-existing illness, suicide, pregnancy and childbirth-related claims.
Generally, you must buy your policy before leaving Singapore.
It doesn't cover overseas travel to seek medical treatment.
Participation in dangerous sports is also excluded but can be added by a special extension (rider). For example, motorcycling and underwater activity can be added by paying an additional 25 per cent for each.
Are group discounts available?
Yes. NTUC Income offers them even for small groups such as a family.
The discount is 10 per cent for 3 persons and 15 per cent for 4 to 20 persons. There are further discounts for larger groups.
NTUC Income has a 24-hour hotline (9646 2663), which allows you to activate the insurance any time before your trip. Its website is www.income.com.sg.
The company says that 90 per cent of its policies are activated online or over the phone.
How much for a seven-day trip?
Asean region (NTUC Income): $30Asia region (all insurers): $40 to $48Worldwide (all insurers): $59 to $72
Asean refers to Malaysia, Indonesia, Thailand, Philippines, Vietnam, Brunei, Cambodia and Laos.

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