Travel insurance: Choose sum insured based on health, age and trip type

Longer trips, adventure activities and remote destinations require higher coverage; policy sub-limits, pre-existing conditions and travel risks must be factored in

Indians wish to travel more frequently and are prepared to spend more on travel. Thomas Cook and SOTC’s India Holiday Report 2025 says that 85 per cent of respondents in a recent survey planned to increase their holidays from two per year to four or six trips annually. Around 84 per cent intend to boost their travel spends by 20–50 per cent in 2025, with over 18 per cent aiming for a 50 per cent increase. Before setting out for a foreign destination, holidaymakers must purchase a travel insurance policy with an adequate sum insured and sufficient limits for each sub-cover.

 

“Do not underinsure yourself while travelling abroad and consider your policy’s sub-limits,” says Chandrakant Said, vice president – consumer underwriting, TATA AIG General Insurance.

 

Healthcare costs 

Healthcare costs in the destination country should be the primary consideration when deciding the sum insured. “Medical expenses are among the highest globally in countries like the US and Canada,” says Ramit Goyal, chief distribution officer, Future Generali India Insurance.

 

For the US and Canada, Goyal suggests coverage between US$ 2.5–5 lakh. For Schengen countries, while the minimum visa requirement is €30,000 (US$ 34,256), Goyal recommends coverage of US$ 1–2 lakh. For Southeast Asian countries, he suggests US$ 50,000–1 lakh, depending on trip length.

 

Age and health conditions must be factored in. “A 60-year-old individual with hypertension travelling to the US should opt for a higher medical sum insured of above US$ 3 lakh. They should also consider products that offer coverage for pre-existing conditions,” says Goyal. A healthy person in their early 30s visiting Southeast Asia for a short leisure trip may consider a lower coverage of US$ 50,000.

 

“European countries have public healthcare systems, but tourists may still face out-of-pocket expenses,” says Alok Agarwal, managing director and chief executive officer (CEO), Zurich Kotak General Insurance. He recommends reading the policy’s fine print to understand the sub-limits on hospitalisation, outpatient care and treatment of specific conditions.

 

Baggage and personal effects 

Baggage cover should reflect the value and nature of belongings. A standard baggage cover of US$ 500–1,000 is typically sufficient. “If you plan to carry high-value items such as a laptop, DSLR camera or smartphone, choose a plan that offers a ‘gadget cover’ with coverage of US$ 1,000–2,000,” says Goyal. He advises reviewing sub-limits and the depreciation clause for electronic items.

 

Trip duration 

Trip duration is an important consideration for deciding the sum insured. “A longer trip of more than two to three weeks increases the risk of exposure, hence one needs a proportionately higher coverage,” says Goyal. Shorter trips of less than seven days can be covered by basic plans. Frequent travellers should consider annual multi-trip policies for better value.

 

Adventure sports and high-risk activities 

Standard policies usually exclude such activities, but many insurers offer optional add-on covers for activities like scuba diving, bungee jumping, trekking, river rafting and so on. “Such activities must be undertaken under trained supervision and not in a professional capacity,” says Priya Deshmukh, head – health products, operations and services, ICICI Lombard.

 

Trip cancellation and delay 

Trip cancellation, curtailment or delay can cause significant financial losses, as each trip usually involves several non-refundable bookings. Policies cover such events under conditions like natural disasters, health emergencies or civil unrest. “Include trip interruption cover if you are concerned about family emergencies or Covid-type events,” says Said.

 

The ideal coverage amount should be equivalent to, or slightly higher than, your total non-refundable trip expenses, including flight tickets, hotel bookings and activity reservations. “For most international trips, a coverage amount of US$ 2,000–3,000 is generally adequate. However, for luxury vacations or multi-country travel, a higher sum may be warranted,” says Deshmukh.

 

Personal accident and emergency evacuation 

The personal accident cover pays a lump sum to support the family or dependants in the event of death or serious injury. “For personal accident and accidental death cover, a sum insured of US$ 50,000–100,000 is generally sufficient,” says Deshmukh.

 

Emergency evacuation and repatriation can be costly, with the cost of air ambulance services alone ranging from US$ 25,000–75,000. “It is prudent to opt for cover in the range of US$ 50,000–100,000,” says Deshmukh.

 

Agarwal highlights that medical evacuation and repatriation cover is particularly important for long-haul and remote destinations.

 

Personal liability cover 

This insurance protects travellers from legal expenses or compensation claims in the event of injury, death or property damage to a third party. “If a traveller accidentally knocks over an expensive item in a store or unintentionally causes injury in a public space, this coverage can help pay for legal expenses and compensation claims,” says Agarwal.

 

Loss of passport cover 

Loss of a passport can create major issues abroad, as it serves as proof of identity and is legally required for travel in many locations. “Loss of passport cover reimburses the insured for the expenses incurred in obtaining a duplicate or temporary passport, including the cost of travel to the nearest embassy, application fees and other associated charges,” says Aashish Sethi, head – agency, health distribution and travel channel, Bajaj Allianz General Insurance.

 

Meet Kapadia, head of travel insurance, Policybazaar, says most policies offer a fixed sum for this, usually between US$ 300 and 600. He highlights that this cover is especially important in countries with high administrative costs.

 

Do’s and don’ts 

Do not choose the policy with the lowest premium. “Compare benefits as well. Policies with slightly higher premiums can give you more comprehensive coverage,” says Kapadia.

 

Do not ignore exclusions or assume that all medical conditions are covered. “Pre-existing illnesses usually require a top-up or declaration,” says Agarwal.

 

Sethi advises opting for higher coverage in cases of longer stays, adventure sports or remote travel.

 

Buy the insurance policy early to be able to use trip cancellation coverage.