Mon, Oct

Travel insurance – Why necessary?

Persons travelling outside the borders of their home countries (e.g. Ghana) either for business, holidays, visits, sports tournaments, are often vulnerable to many risks.

“When you take little things for granted, don’t be surprised when bigger ones swallow you up”

Travelling by air plane for the first time is such a life-threatening experience for most of us, as it is often filled with fear, anxiety and a demeanour that is similar to that of a rural-folk who has suddenly appeared on the tarmac of an airport or an air strip. 

The taking-off of an air plane itself stirs up some inexplicable ‘chemicals’ in one’s inner being! The journey through the clouds with its accompanying occasional turbulence, and the eventual announcement of ‘…please fasten your seat belts…’ as the plane prepares to touch down, is one that could ignite the ‘fear of the unknown.’ 

While the cruising itself is typically covered by Aviation Insurance, the other associated risks such as illness, loss of life and / or luggage among several others are covered by Travel Insurance.

Travel Insurance - Compulsory or Necessity?

A couple of years ago, a friend requested my assistance to obtain a travel insurance policy in order to meet the entry visa requirement of the embassy of a European country he was scheduled to travel to. Indeed, he didn’t find that requirement necessary, as he thought it was only going to add to his travelling cost. 

Anyhow, there was no way his application was going to be accepted and processed without meeting this requirement. Having noticed my friend’s ill-informed view of this requirement, I painstakingly explained to him the concept, features, benefits, exclusions and claims processes of a travel insurance policy.

Travelling, especially by air, has become a very sophisticated adventure, especially with its accompanying risks; hence the need for individuals to protect their lives and other valuables against the uncertainties associated with it, has become imperative. Travel Insurance is important, and in some cases, mandatory for one’s travel arrangements, encompassing all types of eventualities. 

In Ghana, it is becoming one of the key requirements for the acquisition of entry visas, especially to the 26 Schengen countries such as Germany, The Netherlands, Austria, Italy, Spain, etc. This demand has suddenly triggered the custom-design and sales of travel insurance policies by the various insurance companies in Ghana. 

Travel Insurance Policy

Persons travelling outside the borders of their home countries (e.g. Ghana) either for business, holidays, visits, sports tournaments, are often vulnerable to many risks before, during and after the journey. 

A travel insurance policy, therefore, provides cover against the risks of travelling which may include medical fees, loss of personal belongings, flight cancellation charges, third party liabilities, death, injury, etc. 

Duration of Cover

The duration of this policy does not usually exceed 90 days, though yearly policies could be granted to regular travellers and students. It is usually provided by a local insurer in partnership with an internationally accredited one. 

Scope of the standard cover

• Medical expenses where surgical fees, hospital charges and emergency dental treatments are covered. Additionally, the cost of air-ambulance for the sick traveller, his/her close relations, friends and accompanying nurse(s), are all provided for in the cover. The policy may also cover the repatriation of policyholder's corpse or ashes in the event of death.

• Loss of luggage where there is reimbursement for loss of luggage, personal effects, missing passports, etc. The compensation here is, however, based on agreed limits. 

• Travel delays usually occasioned by bad weather, or strike actions 12 hours into the original departure time.

• Personal liability arising from the insured’s legal liability for injury or accident to third parties in the course of travelling.

• Hospital cash benefits arising from the insured being hospitalised. Daily cash payments may be applicable, but subject to agreed terms.

A Relevant Scenario

Assuming Mr Kay, a Ghanaian businessman, is taken ill while on a journey to the Nomansland, his local insurer is obliged to arrange with an internationally accredited partner to adequately cater for his health needs in the foreign country subject to the prior payment of usually affordable premiums. 

However, in the unfortunate event of Mr Kay’s death, his local insurer in concert with the foreign partner will consequently be responsible for repatriating the corpse or ashes of Mr Kay to Ghana.

Optional Benefits

Policyholders have the option to request additional fee-based benefits, which may not be contained in the standard policy. Below are some context-specific optional benefits available to policyholders:

• Financial failure of tour organiser or guide for especially booked holidays to whom advance payments have been made. 

• Lack of amenities – poor service provision in relation to utilities such as water, electricity, broken down elevators, swimming pool facilities at a hotel where the traveller is staying. 

• Cover could also be extended to legal costs in pursuing claims for compensation and damages arising out of death or injury to the traveller.  

Demand for Travel Insurance

Interestingly, most applicants of travel insurance often tend to be interested in only the medical benefits, usually estimated at some 30,000 EUROs, and not the others. 

Most of these people almost invariably forget that the loss of a passport abroad, for instance, could be such a tortuous experience one would dread to experience. 

Moreover, given the recent spate of deadly terror attacks and illnesses globally, it is imperative that prospective travellers do not limit their view of travel insurance as merely for meeting entry visa requirements, but a means of adequately protecting their lives and valuables, while on a journey.

The Way Forward

Insurers must provide adequate education for the public, especially prospective travellers, detailing the features, benefits and claims procedures of travel insurance. 

By so doing, prospective travellers will not just view travel insurance as merely satisfying the requirements of embassies, but an opportunity to adequately protect themselves and their valuables, while on a journey. 

This is the reason prospective travellers need to talk to their insurers, brokers or travel agents in order to apprise themselves of the need for travel insurance. 

Indeed, the various embassies ought not to have made travel insurance a pre-requisite for entry visas before we see the essence of providing a cover for our lives and other valuables.

Until next week, “This is Insurance from the eyes of my mind”.