Annual Travel Insurance Pros and Cons

Is an annual travel insurance plan right for you?

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If you are constantly traveling around the world, an annual travel insurance plan could be an overall cheaper and easier way to keep your personal protection active. With one purchase, frequent flyers and expatriates alike leave with the peace of mind that comes with having insurance in an emergency..

Although annual travel insurance plans will cover any number of trips you may take, it may also be a case of overkill - especially if you don't spend enough time on the road. Is an annual travel insurance policy truly the right purchase for everyone?

Purchasing an annual travel insurance plan takes just as much consideration as getting a regular travel insurance plan. Before signing up for annual travel insurance, take a moment to consider the pros and cons. 

The pros of an annual travel insurance plan

  • The biggest advantage of purchasing an annual 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. If you go abroad more than three times every year, the annual plan is your best bet for consistent coverage. 
  • When you buy an annual travel insurance policy, most of your benefit levels reset with every trip abroad. As a result, you get the same amount of coverage per every trip, so long as you return within the prescribed single-trip time limit. With a trip insurance plan, you can prevent policy confusion or lapses in coverage that would potentially come with buying travel insurance for every single trip. 
  • Even if you travel a lot, some of your annual travel insurance benefits will still be in effect when you come home For example: trip cancellation, trip delay, and luggage loss benefits can follow you as long as you are a certain distance from your home. Every plan is different, so it's important to understand your benefits before you make a purchase decision.  

The cons of an annual travel insurance plan

  • Although an annual travel insurance is a one-time buy for the entire year, one of the downsides is the time limit for individual trips. On most popular annual travel insurance you can't receive coverage for more than 90 consecutive days away from home. Conveniently, that's the same amount of time most common tourist visas last. If you plan on traveling for more than three months, you may want to consider purchasing a long-term travel medical plan instead.
  • Though one of the pros of annual travel insurance is unilateral coverage, there are also stipulations on how far from home you must go before your insurance is valid. In some cases, you must be at least 100 miles away from home before the 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 on a domestic flight may not be covered.
  • While an annual travel policy offers many of the same benefits as a traditional travel insurance plan, there may also be some core shortcomings. For example: annual travel plans sometimes reduce benefit maximums, 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 be available, either as part of the insurance plan or as an additional option. This downside alone may be enough to steer you 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 it. However, there are a number of travel insurance pros and cons for credit cards as well. 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 you understand all the travel insurance pros and cons, including the coverage level at all turns. Getting the right information up front can ensure you get the right coverage for every adventure.