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How to Buy Third-Party Travel Insurance

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Last week, Peter reported on an elderly couple’s medical ordeal in Turkey after purchasing travel insurance from Royal Caribbean. The couple had bought travel insurance and the policy was followed to the letter, however their travel insurance policy was not necessarily in their best interest.

The bottom line is that travel insurance is worth it when you have a sizable investment in your trip and you are buying a restricted or nonrefundable ticket or cruise trip.

When you purchase a plane ticket, cruise or vacation rental, you often have the option of buying insurance from your travel provider. Don’t check that box.

It’s almost always a better option to buy travel insurance from a third party and not from the travel provider itself, and for one very compelling reason: If the travel provider (tour operator, resort or cruise line) suffers its own financial problems, your insurance is also jeopardized.

Instead, the solution is to buy third-party travel insurance. Here’s how it is done:

In selecting a policy, shop around and choose the one that best suits your needs.  Online brokers such as InsureMyTrip and SquareMouth have handy side-by-side comparisons of what’s covered for what price.

Don’t let the Internet be your only resource. Pick up the phone and talk to a travel agent or insurance broker, or directly with the insurance provider, before making a decision. Explain all of the potential scenarios that such as sick or elderly relatives, weather concerns, or potential job loss.

Another benefits of choosing a third-party provider is that they can provide you with many different levels of coverage instead of a one-size-fits-all plan. For example, TravelGuard explains that the cost of travel insurance depends on the age of the traveler and the cost of the trip, and that typically you can expect to pay between 5 to 7 percent of the total trip cost.

Prices of insurance vary depending on the level of coverage you desire.  For a hypothetical 7-day, $5,000 cruise with a 45-year-old traveler, insurance would cost $269 under the Gold Plan, TravelGuard’s most popular plan purchased for cruises. Gold plan includes coverage for children under 18 with an insured adult and the ability to cancel for work reasons/job loss benefit.

For a greater degree of coverage, travelers could purchase the Platinum Plan for $400, which provides the greatest available coverage.  For a less expensive option, travelers can choose the Basic Plan at $214, which provides less coverage and limits the reasons for cancellation.

Keep reading for a comprehensive list of travel insurance resources and providers.

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