Free Credit Card Travel Insurance VS a Standalone Travel Insurance : Which do you choose? | Insurance Advice from CompareKaki, Your Compare “Buddy”
Are you aware that there are certain credit cards that are offering complimentary travel insurance as long as you fulfil specific prerequisites? As long as the credit card itself has the feature to accumulate air miles, or if it can be used internationally for transactional purposes, chances are you might be already insured by an insurer already.
It makes so much sense to be insured when it comes to certain aspects of your life, everyone’s lives differ from one another and we may be prone to certain financial risks, that is why having an insurance is crucial to everyone. For instance, a health insurance would serve its purpose to cushion hospital bills when accidents and mishaps were to occur, a motor insurance would alleviate the repair costs if you were to meet into a road accident even if it is not due to your fault. People these days are not seeing the value of insurance just because these mishaps are not happening to them, but when accidents happen, we would often contradict ourselves and wish it did not. Those who are aware of the financial risks lying ahead of them would be responsible enough to already be insured by the respective insurers.
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Credit Card Travel Insurance
Taking up a credit card would mean another commitment added to your wallet. Some cardholders think that they would be entitled to the free travel insurance as long as they were to take up that particular credit card and just travel at ease, tossing this thought at the back of their mind. But there are requirements to be met and not many are aware that in order to “activate” the travel insurance that is tied along with the card, they have to either:
- Make use of the card to pay for your flight ticket
- Spend a minimum amount of $$ before you are eligible for the complimentary travel insurance
- Your flight ticket has to cost an X amount of $$ and above
- Overseas expenses such as hotels, tours, and other related pre-trip cost has to be charged through that credit card
Every credit card has their own functionality as some might be suited for millenials who are travelling, while some are deliberately aimed towards those who are travelling frequently due to business trips. As long as you know that your credit card has a complimentary travel insurance, do find out with them on the criteria needed to be fulfilled before travelling and make sure that those conditions are met beforehand, else you will not be utilizing this credit card to the best of its ability. For those who are interested to taking up these credit cards with complimentary basic travel coverages, verify those mandatory terms and conditions and make sure that you are able to fulfill them beforehand before you travel abroad.
Credit Cards With Complimentary Travel Insurance
No doubt the credit card company has taken the initiative to partner up with another financial institution to integrate this travel insurance with the credit card, the annual fees that is being paid does not commensurate or justify for the travel insurance at all, simply put, the trade off isn’t that great. It is also worth noting that while a travel insurance comes together with credit cards, it will never be as comprehensive as that of a regular travel insurance, based on the financial risks and uncertainties that they have to potentially shoulder upon, it just does not add up at all. It may not suffice some travellers when it comes to coverage.
Private Travel Insurance
Private travel insurance on the other hand, is much more comprehensive. Having a credit card that comes with a travel insurance does not necessarily mean that you are paying lesser just because it is being “marketed” as complimentary or free. There are fine prints that denotes how this whole travel insurance could be actually be “free” through meeting of their terms and conditions. Contingent to the frequency of overseas trip you take annually, if you are frequent traveler that has periodic overseas business trips, you should consider getting a regular private travel insurance directly from the insurance company itself rather than relying solely on the basic coverage that you will get out of the credit cards. Standalone travel insurance provides better flexibility and higher coverage when benchmarked against the ones that comes with the credit card.
Credit Card Travel Insurance VS Private Travel Insurance
We pitted the HSBC Visa Infinite Credit Card complimentary travel insurance against the AXA Direct SmartTraveller Essential , a stand alone travel insurance as the insurance company that HSBC is partnering with for this particular credit card is AXA. We can see that the coverage for each travel insurance varies. For AXA Direct SmartTraveller Essential, its overseas medical coverage and hospital allowance seems to surpass that of the HSBC credit card travel insurance. Whereas their delay baggage and travel cancellation are identical. But when it comes to the prerequisites, not many would be able to meet the requirements of paying an annual fee of S$650 and have the capacity to earn an annual income of S$120,000. The private travel insurance (Standalone) would be accessible by anyone.
The above credit card and travel insurance are being used for illustration purposes, there are many more other credit cards out there where you can make a comparison against. Check out CompareKaki to find out more.
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Should you, or should you not?
When it comes to getting a travel insurance, these are some questions that you may wish to ask yourself or consider before committing into one.
- How often do I travel overseas?
- Am i satisfied with the basic travel insurance coverage?
- Do I want to pay the credit card annual fees or does the premium look more appealing?
- Is the coverage enough for me when it comes to areas like overseas medical or hospitalization?
- Am i able to fulfill that specific credit card activation requirements from my credit card to be eligible for the complimentary travel insurance?
- How should the claim be made? Processing period? Any excess to top up or paid?
- What is being excluded from the pre-existing medical conditions?
This does not mean that you should dismiss the idea of not getting a credit card that comes with a complimentary travel insurance. There are several essential factors that should be considered before you make your decision. Most importantly, you should be comfortable with the level of coverage and the premium paid and get yourself insured to avoid any overseas uncertainties or financial loss.
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