We’re always talking about long-term financial planning, however, as we reach a time when those with children might be taking advantage of lower cost holidays, we thought it sensible to talk about travel insurance.

Did you know that almost half (49%) of British jet-setters don’t take out travel insurance at the same time as booking their trip? And 23% don’t take any at all.

There were 72.8 million overseas visits from the UK in 2017 (Source: Office for National Statistics (ONS)), and half of those were unprotected.

Cutting it close

While many aren’t buying insurance at the same time as making travel arrangements, they won’t all be completely unprotected, as some will buy at a later date. However, the closer to their departure they do leave it, the longer they are at risk of losing money if their travel is cancelled or needs to be rescheduled. According to research from Aviva:

• 24% buy insurance shortly before their journey: Putting them at risk of financial loss if anything goes wrong before that time.
• 2% buy their insurance at the airport, just before they take off: By this point, your holiday is already underway and there is not much time to consider the terms you are agreeing to, or to shop around for better coverage or prices. You are effectively given take-it-or-leave-it options.

However, some insurance is better than no insurance…

For the 23% of people who do not take out travel insurance at all, a cancelled flight, injury or illness means that they are likely to lose all the money they have put into the holiday, as well as potentially facing further costs if they need to access healthcare or re-arrange the return leg of their journey.

What do people believe about travel insurance?

The research has shown that there is a stark difference between the role travel insurance plays in holiday planning, and what travellers expect it to be able to do for them. For example:

• 12% of people believe travel insurance will cover the cost of their holiday if they are unable to go due to a pet dying the day before departure
• 6% think they will be able to claim a refund through their insurance if they oversleep and miss their flight
• 4% believe they are covered if they miss their flight due to an excess of drinking or shopping in the airport

Unsurprisingly, none of these situations is covered by travel insurance.

So, what does travel insurance do?

Travel insurance is usually offered as a package which covers:

• Travel interruptions, delays and cancellations
• Lost luggage
• Medical cover and evacuation

Other options may be available, but this will vary between providers.

Adam Beckett, Product and Propositions Director, Aviva UK General Insurance, explains: Travel insurance provides important protection before you go away, say if you, or a close relative, falls ill. It’s also there for medical emergencies while abroad which can be very costly, or if your belongings are lost or stolen. It’s important to get the right protection for your needs so you can relax on holiday knowing you are fully covered.

How big is the risk?

Travelling without insurance poses a risk to your wellbeing; physically, mentally and financially.

The research shows that the most common reason (33%) for making a claim on travel insurance is a medical emergency, at 33%. If you fall ill while in another country, you may be in for a shock. Most places do not benefit from the generous healthcare system we have in the UK. Even in countries where care is free ‘at the point of service’, treatment is often followed by large bills.

Of course, a European Health Insurance Card (EHIC) is useful when travelling within those areas, but, it may not be enough, and it is likely to be ineffective in a few years anyway.

Some examples of claims made last year include an individual who suffered from a stroke in the USA and claimed £182,000 in medical bills, and a pneumonia case in Malaysia, which was awarded £191,000.

Of course, if you can pay those kinds of bills out of pocket, you don’t need travel insurance. But, if that kind of money makes your eyes water, make sure you’re covered from the point of purchasing your tickets.

What should you do next?

If you have a trip planned and have not yet bought insurance, your first step should be to put that right, as soon as possible.

Once that is in place, you need to think about other decisions which might need to be made in your absence. As much as we hope your holiday goes smoothly and you return to the UK unscathed, it is a good idea to have a will and Lasting Power of Attorney (LPA) in place, to ensure that you are covered in all possible situations.

Why?

A will dictates what happens to your belongings, dependents and property when you die. It means that your family avoids the lengthy process of having your estate distributed according to the laws of intestacy. Having a will in place means that your assets are given to the people you want to have them.

LPA gives someone you trust the authority to make decisions on your behalf if you are unable to, due to mental or physical impairment. There are two types of LPA; those who make decisions about healthcare and those who are responsible for financial decisions. If you are in a coma or seriously ill, the people you have appointed LPA will make choices based on your wishes and in accordance with your best interests. It is important to make sure that you discuss your wishes with the people you appoint LPA to, so that you can be confident that any arrangements made on your behalf will reflect the things you want.

It might sound a bit morbid, but once you have your protection and paperwork in place, you will be able to enjoy your holiday that little bit more, knowing that you have done everything you can to ensure you and your family are protected in all scenarios.