Understanding Your Travel Insurance Policy

Learn what you’re covered for -- before you need to use it.

People are often daunted by fine print and don’t know how to read an insurance policy. This is perfectly natural, but with a little bit of understanding of how this document works, you can easily understand what is covered by your policy -- and what isn’t. This will help you make informed decisions about which product is right for you.

Most travel insurance policies will be broken down into the following sections. The terminology might be different from one carrier to another, but the idea will be the same:

• Eligibility: This tells you whether or not you are eligible to buy this plan. Normally, you are required to have Canadian provincial health care, be within a certain age range, and possibly satisfy certain medical criteria.

• Terms and Conditions: Policies list this section in different parts of the booklet and may use different terms. This section tells you things like the underwriter of the policy, the overall coverage limit, time limits for submitting a claim, and what laws govern the policy.

• Benefits: This section lists expenses that are covered under the policy, with a precise explanation of what each benefit entails. There might also be stipulations that certain benefits are subject to a lower coverage limit or require pre-approval by the insurer. Anything that is not listed in this section will not be paid for by your policy.

• Exclusions: This section lists a variety of scenarios under which benefits are not payable. Important exclusions to look for are ones regarding pre-existing conditions, geographic areas, and particular activities you might be engaging in. Certain exclusions, such as ones pertaining to illegal actions or drug abuse, appear in almost every policy, while others are particular to a given product.

• Restrictions or Limitations: This section may be part of the Exclusions or Terms and Conditions, or may be separate. It describes certain scenarios in which benefits are limited, for example if you do not seek pre-approval prior to major surgery or if you do not have a provincial health care plan.

• Definitions: This section is extremely important, as it provides precise meanings for certain terms used throughout the policy. Whenever you see one of these terms in the policy, you must understand it in terms of the listed definition, not in terms of your common-sense understanding of the term. Important definitions to look for are ones related to pre-existing conditions and stability, as these definitions will largely determine how any exclusions or restrictions apply to your situation.

Remember, if there’s something in your policy that you don’t understand, don’t be afraid to ask your insurance agent for clarification. It’s always better to know in advance than to be surprised later.