How are Travel Insurance and Health Insurance Different?

Understanding Travel Insurance and Health Insurance

You can get a clear idea of how travel and health insurance work by reading the detailed information about these insurance policies.

Definition

1. Travel Insurance

   Travellers who want to enjoy a stress-free trip often sign up for a travel insurance policy. A travel insurance policy provides coverage for lost luggage, trip cancellations, delayed flights, and medical emergencies.

2. Health Insurance

   A health insurance policy offers financial coverage for medical expenses, such as hospital stays, treatment for chronic illnesses, and medicine costs.

Coverage

The coverage offered by standard travel and health insurance policies is listed below:

Travel Insurance

1. Baggage Cover: The traveller will receive a reimbursement if they lose their personal baggage during their journey. This cover also includes the loss or delay of checked-in luggage.
2. Loss of Passport: If the traveller loses their passport on their journey, then this cover will reimburse the application cost of a new passport.
3. This cover provides an emergency cash advance or facilitation if the traveller has lost their wallet on the trip and runs out of money.
4. Medical Expenses: Travel insurance reimburses the traveller only for emergency medical costs incurred during the trip. For example, if you have suffered injuries during the trip, your travel insurance will cover some medical expenses (treatment cost, overnight stay, etc.)
5. Missed Connecting Flight: If the policyholder missed their connecting flight due to a delay on their first flight, they can receive a refund for the cost of their ticket.

Health Insurance

1. Maternity Cover: Hospitalisation expenses during pregnancy and childbirth can be claimed by the policyholder. For example, hospital expenses after the baby's birth, such as blood tests, medicines for the mother and infant, etc., are also covered.
2. Mental Healthcare: A standard health insurance policy covers treatment for mental illness according to the Mental Healthcare Act of 2017. Policyholders can submit a claim for the expenses incurred for the treatment of mental illnesses such as acute depression, schizophrenia, etc.
3. Daycare Treatments: Most policies usually cover medical procedures or treatments that don't require a 24-hour hospital stay.
4. AYUSH Cover: Alternative medical treatments like Ayurvedic, Homoeopathic, Unani, and Yoga are covered. Policyholders can submit their medical bills to claim reimbursement.

Differences between Travel Insurance and Health Insurance

With a travel insurance policy, the policyholder can receive financial assistance if they face an emergency, such as loss of money or passport or a missed flight, during the course of their trip.

A health insurance policy offers financial coverage for all health-related expenses incurred by the policyholder. Insurance providers offer individual and family health insurance policies in different categories to cater to the needs of their customers.

Tenure of Coverage

A travel insurance policy's duration depends on the type of policy selected by the individual. For example, the individual travel insurance policy's validity is limited to the duration of the trip. However, a student travel insurance plan may be valid for up to 3 years.

The policy tenure of a health insurance plan is typically one year. However, many health insurance providers now offer plans with policy durations of 3 to 5 years.

Geographic Limitations

Travel insurance policies are not restricted by geographic location. Policyholders can choose a travel insurance policy that suits their travel plans. From Europe to America, the policy is valid given that you notify your insurer in advance.

If you want to explore different places in India, you can sign up for a domestic travel insurance policy.

However, the coverage of a standard health insurance policy is restricted to India. If you move out of the country, you will not be covered. For example, a health insurance policy bought in India will not provide financial coverage in other countries.

Risk Coverage

A travel insurance policy provides financial coverage in many non-medical situations as well. It covers unfortunate scenarios such as baggage or wallet loss, medical emergencies, and injuries. This coverage is limited to the duration of the trip.

A health insurance policy provides financial coverage for the policyholder's health-related issues. The coverage typically includes hospitalisation expenses, ambulance charges, and preventative health check-ups. A health insurance policy's coverage lasts until the end of its term.

Pre-Existing Medical Conditions

A standard travel insurance policy will not cover pre-existing health conditions. Policyholders need to opt for additional add-on covers to receive coverage for their pre-existing medical conditions.

A health insurance provider will offer coverage for pre-existing medical conditions. This is possible only if the policyholder has made a full disclosure at the time of signing up for a health insurance policy.

Co-Payment Clause

There is no co-payment clause in a travel insurance policy, as the insurance provider pays for all covered risks under the policy. However, they still need to pay the deductibles.

Health insurance policies include a co-pay clause that requires the policyholder to pay a specified amount before coverage to provided. The co-pay amount is mentioned in the policy documents.

Conclusion

To put it simply, health insurance and travel insurance are both crucial, but they serve different purposes. If you encounter issues while travelling, such as misplaced luggage, cancelled flights, or unexpected medical emergencies, travel insurance provides financial support. On the other hand, health insurance covers routine medical expenses like hospital stays, treatments, and PED coverage. Although the risks covered by the two policies differ, they are both equally crucial for your safety and financial stability.