Planning a vacation? Travel insurance can protect you from financial losses due to medical emergencies, trip cancellations, lost luggage, and more. Here's what you need to know before you go.
Travel insurance helps protect you against risks and financial losses that can happen while traveling. These range from minor inconveniences—such as a missed connection or luggage delay—to major emergencies, such as illness, injury, or medical evacuation. With the average international vacation for two exceeding $7,900 in 2025, travel insurance is more important than ever for safeguarding your investment.
What your travel insurance covers depends on the policy you choose—from a basic plan with limited coverage to a comprehensive plan protecting against a wide range of travel issues. Here are the main types of coverage:
Lost, Delayed, or Damaged Luggage
Travel insurance can reimburse you for expenses when your luggage is lost, delayed, or damaged. While airlines are required to compensate travelers, there are limits:
Domestic flights (U.S.): Airlines must compensate up to $3,800 per passenger (as of 2024)
International flights: Compensation is limited to approximately $1,700–$1,800 under the Montreal Convention
2024 DOT rule: Airlines must refund checked baggage fees if your bag is delayed more than 12 hours (domestic) or 15–30 hours (international)
However, airlines may take 5–14 days to declare a bag officially "lost," and you'll need receipts to prove the value of your belongings. Travel insurance can fill these gaps, covering immediate expenses and providing additional reimbursement beyond airline limits.
Medical Emergencies and Evacuation
Medical coverage is one of the most important reasons to buy travel insurance—especially for international travel. Your U.S. health insurance likely won't cover you abroad, and emergency care overseas can be costly.
Emergency medical claims: According to industry data, 27% of travel insurance claims are medical-related, with average payouts of $1,700–$1,800 per claim
Medical evacuation costs: The CDC states that medical evacuation can cost $15,000 to over $200,000, depending on your location and condition
Coverage limits: Comprehensive plans typically offer $100,000–$250,000+ in medical coverage and up to $1 million for emergency evacuation
Important for Medicare beneficiaries: Medicare does NOT cover medical care outside the U.S. in most situations. The U.S. State Department strongly advises all international travelers to purchase travel health insurance.
Trip Cancellation and Interruption
Travel insurance can reimburse prepaid, non-refundable trip costs if you need to cancel for a covered reason, such as:
Illness or injury (yours or a family member's)
Death of a family member
Natural disasters or mandatory evacuations at your destination
Job loss or military deployment
Airline cancellations due to weather
Many resorts, cruises, and tour operators don't provide full refunds—or any refund—for last-minute cancellations. Trip interruption coverage can also reimburse unused portions of your trip and additional transportation costs to return home.
Travel Delays
If your flight is significantly delayed, travel insurance can cover meals, hotel accommodations, and other expenses while you wait. Some policies kick in after delays of 5–6 hours.
24-Hour Emergency Assistance
Most travel insurance policies include a 24-hour assistance hotline that can help coordinate medical care, locate nearby medical facilities, arrange alternate travel, replace lost passports, and communicate with family members in emergencies.
More Coverage Than Your Credit Card
Some credit cards offer travel protections, but coverage is typically limited. Credit cards rarely cover emergency medical expenses, medical evacuation, adventure activities, or pre-existing conditions. A separate travel insurance policy provides more comprehensive protection and customizable coverage.
Most travel insurance policies have exclusions. Everyday items NOT covered include:
Pre-existing conditions: Unless you purchase a plan with a pre-existing condition waiver (often requires buying insurance within 14–21 days of booking)
High-risk destinations: Countries with State Department travel warnings or political unrest
Adventure sports: Skydiving, scuba diving, and mountain climbing may require add-on coverage
Tour operator default: Financial failure of tour companies may not be covered—check your policy
Elective or routine care: Only emergency medical care is covered—not routine checkups or elective procedures
Cancellation reasons not listed: Standard policies only cover specific cancellation reasons—not "any reason."
Average costs (2025): Travel insurance typically costs 4%–8% of your total trip cost, according to the U.S. Travel Insurance Association. The average premium is approximately $311 for a 15-day trip, or about $21 per day.
Cost by plan type:
Medical-only plans: Average $85 per trip ($4–$5/day)—most affordable option for basic medical coverage
Basic comprehensive: Average $125—includes trip cancellation, delays, and $25,000–$50,000 medical
Comprehensive: Average $227—$100,000–$150,000 medical, up to $1 million evacuation
Premium: Average $345—$250,000+ medical, optional Cancel For Any Reason
Factors that affect cost:
Age: Older travelers pay more. A 65-year-old pays roughly twice as much as a 30-year-old for the same coverage. Travelers 75+ may pay 11%+ of the trip cost.
Trip cost: Higher trip costs = higher premiums, but as a percentage, expensive trips cost less to insure (2.9% for $50,000 trips vs. 3.9% for $2,500 visits)
Trip length: Longer trips cost more to insure
Destination: Remote locations or countries with limited medical infrastructure can add up to 45% to your cost
Coverage limits: Higher medical and evacuation limits increase premiums
Comprehensive Travel Insurance
The most common type covers trip cancellation, delays, lost luggage, medical emergencies, and evacuation. Check policy details carefully, as coverage limits and exclusions vary by insurer.
Cancel For Any Reason (CFAR)
CFAR coverage lets you cancel your trip for ANY reason—even ones not listed in a standard policy—as long as you cancel within a specified timeframe (usually 48+ hours before departure). You'll typically receive 50%–75% of your prepaid, non-refundable costs. CFAR can increase your premium by about 40% and must usually be purchased within 14–21 days of booking.
Travel Medical Insurance
A budget-friendly option if you only need medical coverage abroad. These plans typically don't include trip cancellation benefits, making them less expensive than comprehensive policies. Good for travelers with refundable bookings who primarily need medical protection.
Annual/Multi-Trip Insurance
If you travel frequently, an annual plan may be more cost-effective than buying insurance for each trip separately.
Original Medicare (Parts A & B): Does NOT cover medical care outside the U.S. in most situations. Limited exceptions apply only when:
You have an emergency in the U.S., and a foreign hospital is closer than a U.S. hospital
You're traveling through Canada on the most direct route between Alaska and another state
You're on a cruise ship within 6 hours of a U.S. port
Medicare Advantage (Part C): Does not usually cover medical treatment outside the U.S., though some plans may include limited emergency coverage. Check your specific plan details.
Medigap (Medicare Supplement): Most Medigap plans (C, D, F, G, M, and N) provide emergency medical coverage abroad:
$250 annual deductible
Pays 80% of emergency care costs
$50,000 lifetime maximum
Coverage limited to the first 60 days of international travel
Recommendation: Even with Medigap coverage, Medicare beneficiaries traveling internationally should consider purchasing additional travel health insurance for more comprehensive protection, especially for medical evacuation (not covered by Medigap).
Is your destination covered? Verify coverage for all countries you'll visit.
Is your trip length correct? Make sure coverage spans your entire vacation.
Are pre-existing conditions covered? If you have health conditions, look for a plan with a pre-existing condition waiver.
What are the coverage limits? Check medical, evacuation, and trip cancellation maximums.
What's the deductible? Low-cost policies may have high deductibles.
Are your belongings covered? Check limits for electronics, jewelry, and valuables.
Are your activities covered? Adventure sports often require add-on coverage.
When do you need to buy? Some benefits (such as pre-existing condition waivers and CFAR) require purchase within 14–21 days of booking.
Tip: Most policies allow you to cancel for a full refund within 10–15 days of purchase (a "free look" period). Use this time to review your coverage carefully.
Travel insurance makes sense if:
You're traveling internationally (U.S. health insurance usually doesn't cover you abroad)
You have significant non-refundable trip costs
You're traveling to remote areas with limited medical facilities
You have health conditions that could require medical care
You're an older traveler (medical claims are more common)
You're taking an expensive cruise or guided tour with strict cancellation policies
You may not need it if:
Most of your trip costs are refundable
You're traveling domestically with good health insurance
Your credit card provides adequate travel protections
At Health Plans of NC, our experienced local health insurance agents can help you understand your travel health insurance options—especially if you have Medicare. We can help you:
Understand what your current health insurance covers while traveling
Review Medigap plans that include foreign travel emergency coverage
Find the right travel insurance policy for your upcoming trip
Compare coverage options and costs
