Q. When checking travel companies for trips and tours they always suggest purchasing travel insurance. The problem is that sometimes the insurance costs as much as $499.00 per person for a 14-day trip. We are retired and like to travel now, but even at 3 or 4 trips a year, this adds up considerably. What do you think of those annual travel insurance programs that some companies are offering?

A. First, let’s think about the #1 reason people end up using a travel insurance product: it’s illness or injury before taking the trip (either illness or injury to the traveling party of someone near and dear to the traveling party who is not actually traveling—you and your husband are planning a trip together, but your niece gets into a serious accident 10 days before departure and you don’t feel it’s a good idea to take off).  Many credit cards, as I’ve written before, provide quite good coverage for this scenario, as long as you charge your trip (in some cases just a portion, in other cases the whole thing) to the card. Particularly good are the Chase Sapphire Card and the United Chase Explorer Card.

The other thing that happens the most is getting sick or injured after the trip has commenced. If you’re insured by Medicaid or Medicare, your medical and hospital bills might not be covered overseas, so it’s a good idea to have emergency medical insurance, which many travel policies offer.

But the most financially devastating scenario, for which there are annual plans, is this: you’re seriously injured in the middle of nowhere overseas (for example, you’re hiking down the trail from Machu Picchu in Peru and you trip and break your leg in 12 places—this actually happened to a colleague of mine).  It’s going to cost a lot of money to safely get a) to a qualified hospital in Peru but more importantly b) get you back home safely in an air ambulance (assuming that you cannot take a commercial flight because your condition won’t allow it). Companies like MedJet Assist are designed to safely bring you back to any hospital of your choice—from the trail where you broke your leg, to the nearest quality hospital, and then back home, once you’re medically stabilized. Such trips can cost over $100,000 without insurance, so the cost can be catastrophic.

Another fairly common scenario is simply that you miss your cruise or the start of your tour because of a delayed or canceled flight. Credit cards don’t cover that sort of thing, but regular travel insurance does. It really depends on the price of your trip and how much you can afford to write off if something goes awry. I would insure a $5000 non-refundable cruise, but maybe not a $1000 trip if only the first hotel night is non-refundable.

Bottom line: the only travel insurance I buy is, in fact, emergency medical evacuation. I can’t afford to foot a $100,000 bill.

Above image via Shutterstock