What is the Average Cost of Travel Insurance?

What is the Average Cost of Travel Insurance

Travel Insurance is a type of financial tool which helps us if we find ourselves in a problematic situation during our tour. It helps us to come out of the situation without losing much. By studying the travel insurance policies of various companies we found that the average cost of travel insurance is around 4 to 10% of the total tour cost.

There are different types of travel insurance policies in the market. Like a basic travel insurance policy, middle-tier policy, and comprehensive policy. Usually, the rates of the comprehensive policy are much higher than the basic policy as it gives more coverage.  But there are other factors that have an impact on the insurance cost. So in this article, we are going to discuss the types of policies and factors that affect travel insurance costs.

Read Also: Here Are 9 Awesome Tips for Buying Travel Insurance!



Types of Travel Insurance Policy

There are three types of travel insurance policies available in the market. They are basic, Mid-level, and Comprehensive Coverage policies. As a customer, you can choose the type of policy you want. It is not like other insurance policies where there is little room for change. In travel insurance, you can choose the type of facilities you want to take as a customer.

In the basic travel insurance, the price of purchasing the policy is lower than the other policies but it covers little too. If you want higher coverage then choose from the mid-tier or comprehensive travel insurance. Though the premium rates are high the coverage is higher than the other policies available in the market.

By tallying all the insurance companies we found that the average cost of basic, mid-tier and comprehensive is around $104, $130, and $160 respectively.



Factors that influence the average cost of travel insurance

Travel insurance is not the same for everyone. Some factors are there that determine the average cost of travel insurance. Let us see the factors that determine the rate of travel insurance.


#1. Cost of the trip:

When the insurance companies calculate the rate of the travel insurance premium the total cost of the trip plays an important role. The flight tickets, hotel room bookings, and the type of activities you will do while you are on your vacation all play a part.

It helps the company to determine the maximum payout in case of a claim. So the insurance companies want this information from you before confirming the policy.


#2. Types of coverage you are taking:

Another factor that affects the average cost of travel insurance is the type of coverage you are going to avail. The companies offer many types of facilities. Like luggage insurance, accidental insurance, rental car insurance, trip cancellation, and interruption insurance. So the more facilities you want the more you have to pay.

Suppose you have no plan to rent a car on your holiday so there is no need to take a rental car insurance facility. In this way, you can choose your policy coverage. The things that you don’t need, avoid them. It will certainly lower your insurance premium.


#3. Amount of Deductible:

When you are choosing the policy increase the deductible. It will help you to lower the rate of premium of your travel insurance policy. If you choose higher deductible it assures the company that you are not going to claim for small cases. In the case of a higher deductible, you have to pay a high amount before you make a claim. So consequently the rate of premium drops.


#4. Age and number of travelers:

Age plays an important part in calculating the average cost of travel insurance. No matter what policy you chose, basic or comprehensive, the rate changes with the age of the customer.

The rate of the premium is almost the same from the age of 1 to 30. The rate is slightly higher for the person whose age is 30 to 50. But the premiums are much higher for the person whose age is beyond 50. At this age,  people are prone to injuries and sickness. So the rate of the premium also goes up.

Generally,  the insurance companies don’t offer any quotation for the traveler whose age is above 80. So age is an important factor in the premium calculation.


#5. Duration of the tour:

The length of the trip is also important in deciding the average cost of travel insurance. If it is a short trip then the premium rate is also lower. But if you are going for a month-long vacation the premium rates will also increase. In the case of a long trip the chances or accidents or illness rise. So the insurance companies see the length of the tour before deciding the rate of premium. The longer your trip the higher you pay.


#6. Travel destinations:

Some insurance companies also see the place where you are going to visit. Different places have different types of costs. So if you are going on a Europe tour your policy premium will be higher. But if you are going to some third world country then the rate of premium will be lower.

The reason behind it is that the cost of medical assistance, flights, and hotels is different. So if you fall sick and you need emergency evacuation the insurance company has to pay more money in Europe than in Cambodia.


#7. Health Condition of the traveler:

Before finalizing the deal the Travel insurance will ask you about your health history. So if you have a pre-existing health condition tell the insurance company. A traveler who has a medical history has to pay a higher premium than a normal person. So your health condition also plays an important part in deciding the rate of premium of the travel insurance premium.

Read Also: How Does Credit card travel insurance Work?




So these are the factors that affect the rate of premiums in determining the average cost of travel insurance premiums. There are a lot of travel insurance companies available in the market. So shop around and buy the travel insurance policy which suits your better. Ask the agent about the facilities they are going to provide in their policy. In the post-COVID era travel insurance is a must if you want your journey to be safe and sound.

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