Annual Travel Insurance Pros and Cons

Determining if an annual travel insurance plan is right for you

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For the traveler who is constantly on the go, an annual travel insurance plan could be a cheaper and easier way to ensure a consistent level of coverage no matter where they may go. With one purchase, frequent flyers and expatriates can ensure they are protected for emergencies near and far.

Although annual travel insurance plans are a once-a-year purchase for any number of trips individuals may take, it may also be too much for too little - especially when travelers don't spend enough time away from home.

Is an annual travel insurance policy truly the right purchase for everyone?

Purchasing an annual travel insurance plan takes just as much consideration as deciding on a traditional travel insurance policy. Before purchasing an annual travel insurance plan, it may be prudent to consider the pros and cons of an annual travel insurance plan.

The pros of an annual travel insurance plan

  • The single greatest advantage of purchasing a travel insurance plan is coverage throughout the year. Instead of buying a different policy for every international trip, travelers who purchase an annual policy are covered every time they leave the country. As a result, an annual travel insurance policy is often the best choice for travelers who take more than three international trips per year. 
  • In addition to year-round travel insurance coverage, all the benefits of a travel insurance policy maintain throughout the year, and reset per trip. Therefore, travelers are guaranteed the same amount of coverage per every trip, no matter how many trips they take throughout the year. Those who are constantly traveling could prevent policy confusion or lapses in coverage that would potentially come with purchasing a travel insurance policy for every single trip. 
  • Although the constant levels of travel insurance are an annual travel insurance pro, certain policies extend additional benefits for travelers while in their home country. For example: trip cancellation, trip delay, and luggage loss benefits may extend to travelers so long as they are outside of their home area. Before purchasing a travel insurance plan, be sure to understand if trip benefits extend to both domestic and international travel. 

    The cons of an annual travel insurance plan

    • Although an annual travel insurance plan can cover travelers throughout the year, one of the cons of purchasing the annual policy is the time limit extended on individual trips. Many popular annual travel insurance plans stipulate that a covered trip cannot exceed 90 days - the same amount of time of the most common tourist visas. Those who plan on being away from home for more than three months at a time may want to consider purchasing a long-term travel medical plan instead.
    • Though one of the pros of annual travel insurance is unilateral coverage away from home, there are also stipulations on how far from home travelers must be before receiving coverage. In some cases, travelers must be at least 100 miles away from home before their annual travel insurance policy goes into effect. How this rule is applied while traveling around the world is at the discretion of the travel insurance provider: while trips to Canada or Mexico less than 100 miles away from home may be covered, losing luggage closer to home (even when flying) may not be covered. The distance requirement is a definite con of annual travel insurance plans. 
    • While an annual travel policy offers many of the same benefits as a traditional travel insurance plan, there may also be some core shortcomings compared to a traditional travel insurance plans. Annual travel plans sometimes reduce the benefit amount on key benefits, such as coverage for sports and hazardous activities (including skiing). Furthermore, common benefits including Cancel for Any Reason benefits, Cancel for Work Reason benefits, and the pre-existing condition waiver may not necessarily be available from a travel insurance policy. This travel insurance con may be enough to steer some travelers back to a traditional travel insurance plan. 

      Are there other travel insurance options available?

      For those travelers who are not sure which travel insurance policy is right for them, there are still options available to receive coverage. Many common travel-related credit cards offer robust travel insurance plans for cardholders, assuming they purchased their itinerary with a credit card. However, there are a number of travel insurance pros and cons for credit card policies. Be sure to understand what is covered and what is not before departing the country.

      Annual travel insurance can be the right purchase for frequent travelers, but only when they understand all the travel insurance pros and cons, including the coverage level at all turns. Getting the right information up front can ensure travelers get the right coverage for their adventures, no matter where they may roam.