Save on Travel Insurance—Buy Annuals.

If you travel out of the country more than twice a year, you can save a pile of money by buying an annual, multi-trip travel insurance plan. And not only is it cheaper, it saves you the hassle of applying, filling in forms, and handing over your credit number again and again.

Here’s how annual plans work. They come in different denominations—7 day, 15, 30, 60, 90—or some other number—depending on the insurer’s line of products. If you buy a 15-day annual plan, you can travel up to 15 days any number of times throughout the year and you only pay once. The only condition is that you must return to your home province for at least one day before you begin your next segment. .

You don’t have to tell your insurer when you’re leaving on your next trip, you just go. And if you need to supplement one of those segments—say with an extra five or 10 days—you call your insurer and they can top you up for that one trip. Of course you’ll pay extra for those additional days.

How does this save you money? Instead of buying four or five single-trip plans of say, seven days each over the course of the year, you only pay for one seven-day trip and you re-cycle it.  So long as you don’t generate a claim on any of those segments, your annual payment covers you.  If you do generate a claim—you must tell your insurer and they will re-calibrate your rates for the remainder of the year.

How do you prove you haven’t overstayed your 7 or 15 or 30-day trip threshold? You won’t have to unless you have a claim, and then you will have to prove that you have not exceeded your trip length, usually by showing receipts, credit card charges, etc. In effect, you’ll have to prove where you were before and after the emergency: that’s easy. But remember that you must be in your home province, not just in Canada, for at least one day between trip segments.

Also, if you generate a claim on one of your trip segments, the condition causing the claim may be considered a pre-existing condition for your remaining segments, so tell your insurer of your claim and be sure you understand the pre-existing condition limitations for your remaining trip segments. But if you don’t have a claim, you don’t have to worry about those things.

The concept works because insurers base their rates on per diem exposure.  If you plan on being out of the country for 180 consecutive days, you’re going to pay more per day than if you are going to be out for 60 days. If you’re a golfer, your chances of being struck by lightning are far greater if you play every day, than if you play only 10. That’s called risk assessment.

Save money. Hold on to your flexibility. Cut out multiple application hassles. Annual plans are the perfect vehicle for today’s frequent travellers.

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