Covering Your Adventures—Travel Insurance for Retirees

Every retiree’s goals for the future are unique, but in my experience, there is one that’s pretty consistently pursued. This popular goal is to travel. It makes a lot of sense, as during our working years there tends to be less time (and available cash) to focus on leisure while growing a career, building a business or raising a family. Additionally, retirement planning affords us the opportunity to explore our “bucket list” desires, which often include seeing parts of the world that we want to experience.

That said, international travel can quickly turn from a “dream come true” into a nightmare under certain unfavorable circumstances. Particularly, travel can be interrupted by medical emergencies, flight cancellations, lost luggage or other crises beyond our control. Remember, it wasn’t very long ago that the global pandemic caused major issues and significant stress for panicked travelers trying to scramble home safely amid uncertain conditions. As a continuation of our series on the types of insurance to own in retirement, we now turn our attention to travel insurance.

What are the risks of travel?

When we decide to travel abroad, we naturally assume that we are taking on various risks. Some may be health-related, and the World Health Organization indicates that road traffic collisions are the most frequent cause of death among travelers.¹ This is most common in low- to middle-income countries where trauma centers may be underdeveloped, roads may be poorly maintained and traffic laws are loosely enforced. Other health-related risks may be due to pre-existing conditions. Retirees should consult with their physicians about the activities they plan to participate in during their travels. The American Heart Association recommends that those with heart disease travel with their medications, bring a list of their prescriptions in case they’re lost, and also monitor hydration and sodium intake.² As they say, an ounce of prevention is worth a pound of a cure (or an expensive medical evacuation!).

Travel risks are not limited to health. They can range from simple inconveniences like lost luggage or delayed flights, to more extreme examples such as social unrest, natural disasters and hijacking. We recommend a certain amount of risk mitigation prior to traveling. For example, checking the State Department’s website can provide guidance on the safety of traveling to certain parts of the world. Additionally, understanding the weather patterns of destinations can not only help with packing appropriately, but it may also inform travelers of the potential for extreme weather events. Maintaining travel insurance can help offset the monetary risks, but being proactive by planning ahead and taking precautions can help to avoid some risks in the first place.

Costs and benefits of travel insurance

A recent article on forbes.com³ indicated that a medical evacuation flight from the Caribbean to the U.S. could range from $15,000 to $25,000. The same type of flight with medical assistance from Asia, Australia and the Middle East could cost between $165,000 and $225,000. That would most likely bust anyone’s travel budget if they had to pay that large amount out of pocket. Additionally, the peace of mind that comes with having insurance can be priceless for a family concerned about a loved one traveling abroad.

So what does travel insurance cover? Typically, a travel insurance policy will cover trip cancellation or interruption, luggage and personal belongings, rental property such as a rental car, medical care and assistance, and sometimes accidental death. The premiums are based on a number of factors, including total non-reimbursable cost of the trip, duration of the trip and the destination. On average, a traveler should expect to pay about 6% of the total non-reimbursable cost of the trip in premiums. That said, it’s important for retirees to shop for the best rate. Travelers in their 70s and 80s can potentially pay two to three times that amount.⁴

Adding to your packing list

While building a dream itinerary, retirees should itemize the costs of hotels, airline or cruise fares, and excursions and tours. Additionally, having an itemized list (and photos, if possible) of the valuables you may bring with you on your trip will make for easier processing of claims should luggage be lost or stolen. This is particularly important for more expensive personal belongings like jewelry or golf clubs. Also, understanding the cancellation policies of the airlines, hotels or cruise operators will also help in the event that a trip needs to be cancelled or postponed.

Travel insurance can be a good tool to transfer risk and add peace of mind when retirees go exploring abroad. There are plenty of websites offering competing quotes for coverage, and you may also purchase insurance directly through airlines and hotels. Before boarding that plane or cruise ship, make sure you’ve taken the proper steps to reduce risks for a safe and enjoyable journey.

Other topics in this series:

• What Insurances Do I Need in Retirement?
• Liability Insurance for Retirees 
• Insuring Your Home in Retirement 
• Identity Theft Insurance – As a Retiree, Do I Need This? 
• The Transition from Disability Income to Long-Term Care Insurance

¹ https://www.who.int/news-room/questions-and-answers/item/health-risks-when-traveling
² https://www.heart.org/en/health-topics/consumer-healthcare/what-is-cardiovascular-disease/travel-and-heart-disease
³ https://www.forbes.com/advisor/travel-insurance/medical-evacuation-coverage/
⁴ https://www.usatoday.com/money/blueprint/travel-insurance/average-travel-insurance-cost/

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