Summary of this article
People insure their car, their home, even their phones, but the trip they’ve spent months building is left exposed.
Domestic travel inconvenience is manageable. But international travel introduces a completely different financial risk.
A comprehensive travel policy isn’t a single benefit, it’s a bundle of protections working together.
Rahul had been planning his Bali trip for eight months. Flights were booked. A villa was locked in. Activities were mapped down to the hour. It was the kind of trip families look forward to all year, with Rs 2.3 lakh of careful planning, anticipation, and non-refundable bookings. Unfortunately, on day two, his wife was hospitalised with acute appendicitis.
The hospital bill came to Rs 1.9 lakh, and emergency return flights cost another Rs 48,000. The one thing Rahul had skipped to ‘save a little’ was travel insurance of Rs 3,200.
“It’s never a reckless decision,” says Venkatesh Naidu. CEO at BajajCapital Insurance Broking Ltd. “It’s a prioritisation mistake. People insure their car, their home, even their phones, but the trip they’ve spent months building is left exposed.”
The Misunderstanding That Costs The Most
Most travellers think of insurance as protection against lost luggage or delayed flights. In reality, those are the smallest risks. A single hospitalisation abroad can cost anywhere between Rs 5 lakh and Rs 20 lakh, depending on the country. And your existing health insurance? It typically doesn’t apply outside India.
“Domestic travel inconvenience is manageable,” explains Naidu. “But international travel introduces a completely different financial risk. You’re dealing with foreign healthcare systems, foreign currencies, and no local support structure. That’s where insurance shifts from optional to essential.”
What Travel Insurance Actually Protects
A comprehensive travel policy isn’t a single benefit; it’s a bundle of protections working together.
Medical emergencies: Hospitalisation, treatment, doctor consultations
Trip cancellation: Non-refundable bookings if plans fall apart
Trip delays: Hotel stays, meals, rebooking costs
Baggage loss: Compensation for essentials and belongings
Emergency evacuation: Air ambulance or repatriation (often Rs 15–25 lakh)
Passport loss: Documentation and temporary accommodation support
Individually, each risk feels unlikely. Together, they define the financial reality of travel.
“The claim that surprises most people isn’t baggage or delays, it's medical,” says Naidu. “You don’t plan for illness on a holiday. But that’s exactly why it becomes financially disruptive.”
Domestic vs International: A Critical Difference
Not all travel insurance is built the same, and this is where many travellers go wrong.
Domestic travel insurance:
Focuses on inconvenience: delays, cancellations, baggage
Medical needs are largely covered by your existing health policy
International travel insurance:
Designed for financial survival abroad
Covers hospitalisation, evacuation, liability, and currency risks
This isn’t a version upgrade. It’s a different product altogether.
The Five Checks That Actually Matter
Before buying a policy, these are the details that make or break your coverage:
1. Medical cover limit (in USD, not INR):
Rs 5 lakh sounds reasonable until you’re billed in dollars. For most international destinations, USD 100,000 is a practical minimum.
2. Cashless hospital network:
Paying upfront abroad can be financially and logistically difficult. Cashless access isn’t a luxury; it’s critical.
3. Pre-existing condition clause:
Most policies only cover emergency stabilisation, not full treatment. If someone in the family has a condition, this matters.
4. Adventure coverage:
Trekking, scuba diving, and skiing are typically excluded unless added separately.
5. Purchase timing:
Buy insurance when you book the trip, not the night before. Cancellation cover only works if the policy exists before the disruption.
The Real Cost Equation
Travel insurance is one of the simplest cost-benefit decisions in personal finance.
Premium: Rs 2,500–Rs 5,000 for a family international trip
Exposure: Rs 2–20 lakh (or more)
“The premium is usually less than 1 per cent of the trip cost,” says Naidu. “But it protects 100 per cent of it. Few financial decisions offer that kind of asymmetry.”
A good travel insurance policy won’t make your trip better. But it will ensure that a single unexpected event doesn’t make it worse financially, emotionally, or logistically. Because in the end, travel is about experiences. Insurance simply ensures those experiences don’t come with consequences you didn’t plan for.
FAQs
1. What is travel insurance?
Travel insurance is a type of insurance which protects you financially from unforeseen circumstances when travelling. This could be a medical emergency, cancellation of your trip, flight delay or lost baggage. Travel insurance means that one unplanned event won’t leave you broke.
2. What does it cover?
Typically, plans include emergency medical expenses, hospital stays, emergency medical evacuation, and interruptions to your trip. Some policies cover cancellation of your trip, missed flight connections and lost baggage/passport.
3. Is travel insurance necessary for short trips?
Yes. Even short trips can be disrupted by sudden illness, accidents, or travel delays. As several cases show, a relatively small premium can protect you from expenses that run into lakhs.
