Do I Have to Pay All of the Premium at One Time?
Planning a vacation comes with a lot of excitement, and in many cases, a lot of upfront costs. With that comes the concern of what happens if you need to cancel. That’s where travel insurance comes in.
Before you can decide whether or not travel insurance is worth it for your trip, it’s important that you understand what you’re buying, and when you’re paying for it. Squaremouth breaks it down.
What is a Travel Insurance Premium?
A travel insurance premium is the amount of money you pay to buy a specific travel insurance policy. In the simplest terms, this is the price of the plan you are buying.
What Factors Affect Travel Insurance Premiums?
There are three main factors that directly influence your travel insurance premium:
- Your total insured trip cost
- Your age and the age of your travel companions
- The length of your trip
While these are the main factors, there are others that can play a role, depending on the travel insurance company and policy. These factors can include your destination, coverage amounts, and optional add-on coverages.
Do You Have to Pay the Full Premium Upfront?
In general, you must pay the entire travel insurance premium at the time of buying your policy. The full premium is due as a single payment upfront. Once you buy your policy, coverage goes into effect immediately.
With that said, if you’ve only paid for a portion of your trip, you only need to insure that amount upfront. As you made additional trip payments, you can add those amounts to your policy. In this case, you will need to contact your travel insurance provider to update your trip cost, and you will pay any additional premium that is due at that time.
Can You Pay for Travel Insurance in Installments?
You are responsible for the full premium owed at the time of purchase. The only way travel insurance is paid in installments is if you add to your trip cost between the time of buying your policy and taking your trip. In this situation, you will pay the additional premium that is owed when you add trip expenses to your policy.
Is My Travel Insurance Premium Refundable if I Cancel My Policy?
Travel insurance premiums generally are refundable, as long as you cancel your plan within the policy’s Money Back Guarantee period. Also referred to as the Free Look Period, this is the 10-21 day-window immediately following the purchase of your policy during which you can cancel for a full refund.
The purpose of the Free Look Period is to give you the chance to review your coverage and decide if the plan you purchased has the coverage you need. If you determine you need a different policy and decide to cancel within the Money Back Guarantee window, your provider will refund your premium and you can buy another policy with more suitable coverage for your trip.
Travel Insurance Premium FAQs
Are there discounts for purchasing travel insurance online?
There are not any discounts associated with buying travel insurance online. In fact, travel insurance premiums are heavily regulated and it is illegal to discount the cost of travel insurance in any way.
Does a history of travel insurance claims affect my premium?
No, your past travel history does not impact your premium in any way, even if you’ve filed travel insurance claims previously. Your travel insurance premium is specific to the trip you are insuring, and does not factor in past history in any way. The main factors that influence your premium are your trip cost, age, and length of your trip.
Does buying travel insurance early reduce the premium?
Buying earlier typically does not reduce travel insurance premiums, as the cost of a policy is based on your trip details, not the timing of your purchase.
Does paying more for travel insurance mean better coverage?
No, paying more for travel insurance does not equate to better coverage. This is a common misconception amongst travelers when buying insurance. Each provider calculates premiums differently based on their target demographic. For that reason, Squaremouth always recommends buying the least expensive travel insurance plan with the benefits and coverage amounts you need.