One good reason for shopping around when you’re looking for travel insurance is to compare the savings you can achieve by taking on deductibles. You can save a lot of money this way.
What’s a deductible? It’s the amount you agree to pay a hospital or for a medical bill before your insurance kicks in. Buy a plan with a $100 deductible, and on a $1,000 bill you pay the first $100 and the insurer is responsible for the remaining $900. On the other hand, if your bill is $100 or less, the insurer is spared having to spend more to process the bill than it is worth. For that, it’s worth it to the insurer to give you a break on the premium. All insurers listed on our site offer deductible options. Visit our products page for more details.
Deductibles can also go into the thousands, and the higher they go, the bigger your discount. I know many insurers who offer $5,000 or even $10,000 plan deductibles with savings that can go as high as 30 or 40 per cent.
Obviously you should be in good health to consider such a plan and you should also be travelling for a long enough period that it makes economic sense. You want your savings to be substantial. You’re not going to take a $5,000 deductible to save $20 on your premium. And above all, you should only consider a deductible you can manage comfortably.
But only a very small proportion of travellers actually encounter medical emergencies while they are out of the country. So if you are relatively healthy and you have no major medical claims for, say, five or six years, and you save 15 or 20 per cent on your premiums each year for taking a deductible, you will have saved a good chunk of money.
Also, if you have a retiree pension plan with a limited lifetime medical maximum (say $100,000 or $500,000), you may be able to use a portion of that to cover a $5,000 or $10,000 deductible if you have a large claim. When comparing insurance plans, ask insurers if they have such an option.
Most important, when comparing plans with deductibles, make sure you are comparing like plans with like deductibles. No sense comparing the premium for a plan with a zero deductible to one with a $100 deductible.