It’s a hassle-free way of getting the protection you need without having to organise insurance for every trip taken, yes, but is it worth it? Can you rely exclusively on a piece of plastic knowing that there is a substantial variation in the coverage amounts and restrictions (based on the type of card you have, the card issuer and the network affiliation)? We decide to find out!
What are the differences we can expect?
Complimentary credit card travel insurance isn’t completely “free” (nothing good ever is); you somehow pay for it through different ways. One of the most common is a higher annual fee, but at the very least, you would be required to swipe that particular card when paying for the trip. Often, you’d need to spend past a threshold amount before your departure, in order to activate it. Furthermore, this “complimentary” feature is usually not included with standard cards (available with higher-end cards like Gold or Platinum).
On the other hand, a conventional travel insurance product has been designed specifically to cover the risks, costs and losses that may be incurred during an emergency while travelling locally or internationally. Traditionally, these plans were pitched as the best protection for ordinary circumstances, but were difficult to acquire. Today, online companies provide a secure platform for consumers to compare and purchase one easily, even in the comforts of their own homes.
What are the differences between the two? We can spot them in a few factors, namely:
a. My credit card already has that type of medical coverage.
That may be so for the basics and nearest appropriate medical facility. However, when a life-threatening event occurs, an evacuation to the nearest medical facility can be of the utmost importance. A lot of credit cards don’t cover this service; even if they do, it’s left to you to arrange all the important details or outsource the critical elements to third parties. It does come with a price, and oftentimes it’s rather expensive, so be prepared to have to pay for it fully out of your own pocket.
For example, the family of a young lady who fell from a boat and slipped into a coma had to struggle to raise the money necessary to bring her home. The Canadian was on life support in Croatia, awaiting the funds to afford an air ambulance costing approximately RM300,000. On the other hand, a bona fide conventional travel insurance policy usually has this coverage! Most of the policies provide coverage for such a medical evacuation, sometimes up to an unlimited amount.
While many Malaysians may choose to disregard this benefit saying, “it will never happen to me”, it’s good to bear in mind that life is full of unforeseeable shocks and it’s better to be safe than sorry and broke.
b. You may not be eligible for that coverage after all.
The eligibility terms on both can be vastly different, so it would be wise indeed to read the fine print before jetting off into a difficult situation. Did you know that credit card travel insurance won’t cover any pre-existing medical conditions, especially if it can be proven that the cardholder has reasonable knowledge of the sickness/injury? There are age limits to be considered as well, usually around 70 years of age.
Greater flexibility are the key words here for conventional travel insurance plans; even if you have pre-existing medical conditions, you’ll still be covered as long as you’re willing to pay a higher premium. The same applies for that age cap, since many policies either have age loading fees or cover travellers up to the age of 100.
c. Did you know you can be covered in the event of a kidnapping?
Credit card travel insurance simply won’t be able to offer you such a broad range of benefits as those of a conventional insurance plan. Some of these extras include the cost of repatriation of mortal remains, where that travel insurance plan you purchased will reimburse you the expenses incurred for a funeral or burial, sometimes even going as far as offering services to make the necessary arrangements on your behalf.
Two more interesting add-ons which you could be covered for but weren’t aware of: paying for a ransom in the unfortunate event of a kidnapping, and terrorism/hijacking cover (death, disablement and losses).
Now, let’s take a look at the similarities
We’re going to use the same factors as above to see if we can compare the similarities between the two as well.
a. Medical coverage
We already know that you are covered for basic medical ailments when it comes to both credit card travel insurance and conventional insurance plans. In the case of the latter though, it must be noted that it’s far superior in that you are allowed to choose the level of coverage.
This could run the gamut from hospitalisation, surgical and treatment expenses to compassionate visitation (additional accommodation and travel needed) due to hospitalisation or death of insured person and alternative medical treatment expenses.
b. Trip interruption/cancellation coverage
Cancelled or rescheduled flights can really throw a spanner into the works of even the most carefully laid-out travel plans. Both types of insurance have policies on basics such as a missed flight connection and flight delays but the conventional insurance plan offers greater coverage scope for things like weather unpredictability, technical issues and natural disasters (the recent volcanic eruption alert for Mt Agung in Indonesia is a prime example) to name a few.
c. Travel inconvenience benefits
Hearing that your baggage has mysteriously disappeared or has been sent to the wrong country is enough to reduce an adult to tears. Again, you can get protection against such an untoward incident from both the insurance types, but the plastic will only cover the basics like baggage delay, loss and damage (costs of emergency essential clothing and requisites).
Now, what if lightning were to strike twice and you realise that all your personal money, credit cards, travel documents and portable computer was in your checked-in luggage that somehow went missing? This is where the added benefits of a conventional insurance plan comes in. Some of the really comprehensive ones will actually reimburse you for all of the above, up to a certain cap.
Comparing credit card and conventional insurance plans
We have now come to the exciting part of this article, pitting popular products from both teams against each other! For ease of comparison, we took two of the most popular credit cards that offer travel insurance, and placed them side-by side with two of the typical conventional travel insurance plans. This should hopefully help you to decide based on your needs:
|Basic Individual by Hong Leong MSIG Takaful||TravelPAC Silver Plan by Zurich||Citibank PremierMiles Visa Card||Maybank 2 Platinum Card|
|Hospital income||Basic Individual by Hong Leong MSIG Takaful:RM150 per day (up to RM7,000)||TravelPAC Silver Plan by Zurich:RM175 per day (up to RM5,250)||Citibank PremierMiles Visa Card:N/A||Maybank 2 Platinum Card:N/A|
|Follow-up treatment||Basic Individual by Hong Leong MSIG Takaful:Up to RM15,000||TravelPAC Silver Plan by Zurich:Up to RM15,000||Citibank PremierMiles Visa Card:N/A||Maybank 2 Platinum Card:N/A|
|Funeral expenses||Basic Individual by Hong Leong MSIG Takaful:RM3,000||TravelPAC Silver Plan by Zurich:Up to RM25,000||Citibank PremierMiles Visa Card:N/A||Maybank 2 Platinum Card:N/A|
|Loss of travel documents||Basic Individual by Hong Leong MSIG Takaful:Up to RM2,000||TravelPAC Silver Plan by Zurich:Up to RM3,750||Citibank PremierMiles Visa Card:Up to RM500||Maybank 2 Platinum Card:N/A|
|Medical evacuation and repatriation||Basic Individual by Hong Leong MSIG Takaful:Up to RM750,000||TravelPAC Silver Plan by Zurich:Up to RM1,000,000||Citibank PremierMiles Visa Card:Up to RM75,000||Maybank 2 Platinum Card:N/A|
|Home care||Basic Individual by Hong Leong MSIG Takaful:RM2,000||TravelPAC Silver Plan by Zurich:Up to RM2,500||Citibank PremierMiles Visa Card:RM7,500||Maybank 2 Platinum Card:N/A|
|Child care||Basic Individual by Hong Leong MSIG Takaful:Not covered||TravelPAC Silver Plan by Zurich:Up to RM7,500||Citibank PremierMiles Visa Card:N/A||Maybank 2 Platinum Card:N/A|
|Missed flight connection||Basic Individual by Hong Leong MSIG Takaful:Up to RM1,000||TravelPAC Silver Plan by Zurich:Up to RM1,000||Citibank PremierMiles Visa Card:Up to RM2,500 (more than 4 hours)||Maybank 2 Platinum Card:Up to RM800 (more than 4 hours)|
|Delayed flight||Basic Individual by Hong Leong MSIG Takaful:RM200 for every 8 hours (up to RM2,000)||TravelPAC Silver Plan by Zurich:RM150 for 6 hours (up to RM3,000)||Citibank PremierMiles Visa Card:Up to RM2,500 (more than 4 hours)||Maybank 2 Platinum Card:Up to RM800 (more than 4 hours)|
|Luggage delay||Basic Individual by Hong Leong MSIG Takaful:Up to RM300||TravelPAC Silver Plan by Zurich:RM200 for 6 hours (up to RM400)||Citibank PremierMiles Visa Card:Up to RM2,500 (more than 6 hours)||Maybank 2 Platinum Card:Up to RM800 (more than 6 hours)|
|Luggage loss||Basic Individual by Hong Leong MSIG Takaful:RM3,000||TravelPAC Silver Plan by Zurich:Up to RM3,750||Citibank PremierMiles Visa Card:Up to RM12,000 (within 24 hours)||Maybank 2 Platinum Card:Up to RM2,500 (more than 48 hours)|
|Personal accident (death/total permanent disablement)||Basic Individual by Hong Leong MSIG Takaful:RM300,000||TravelPAC Silver Plan by Zurich:RM150,000||Citibank PremierMiles Visa Card:RM300,000||Maybank 2 Platinum Card:RM300,000|
|Medical expenses||Basic Individual by Hong Leong MSIG Takaful:Up to RM300,000 (due to accident)||TravelPAC Silver Plan by Zurich:Up to RM150,000||Citibank PremierMiles Visa Card:RM50,000||Maybank 2 Platinum Card:RM50,000|
|Cost of acquiring||Basic Individual by Hong Leong MSIG Takaful:RM16 per trip||TravelPAC Silver Plan by Zurich:RM40 (for a trip of 1-5 days)||Citibank PremierMiles Visa Card:Salary of RM100,000 per annum (annual fee of RM636)||Maybank 2 Platinum Card:Salary of RM60,000 per annum (no annual fee)|
As can be seen by the simplified table above, most credit cards only offer basic “one-size-fits-all” travel insurance plans, which ultimately means that you’re not able to customise the protection according to all your needs. In case you aren’t sure whether travel insurance is necessary if you already have medical insurance, this nifty guide has you covered.
For frequent travellers, it would be wiser to sign up for an annual coverage since it will work out to less per trip. For those who are travelling locally or to neighbouring countries for a relaxing holiday, it’s alright to consider qualifying for a credit card-issued insurance plan since all your bases are covered. However, an excellent way to ensure you have a worry-free holiday full of fun and adventure anywhere in the world would still be pairing your credit card coverage with that of a conventional insurance plan.
Ultimately, it’s also best to keep in mind that the cheapest is not always the most ideal. If the plan barely covers anything and is too restrictive until you aren’t allowed to claim for anything at all, it defeats the purpose of getting covered in the first place. Bon voyage!