Over the past few weeks I have been quietly watching a drama play out like episodes of ‘Days of our Lives’.
But this is no soapy….it is a real life drama involving real people and having the key elements of a good serial – excitement, anticipation, climax and then disappointment.
Setting the scene
Picture a couple in their mid-eighties. They are active and involved in a wide range of activities, community groups, and they like to travel.
These days, a week or two spent on a cruise ship is the travel option of choice. In the past couple of years they have done the usual Pacific Island cruises, travelled around the top-end of Australia, cruised through Asia to Japan, and most recently, took a cruise to Papua New Guinea.
The dream cruise
Feeling a little restless and sensing another cruise was in order, this couple started exploring the options for a cruise in May 2018. The trip that caught their eye was a 35 day cruise that would take in the Pacific Islands, Hawaii, Tahiti, and back home via New Zealand. At around $12,000 each, this is not a cheap cruise – we really must have a cabin with a balcony!
With the trip selected, it was time to start recruiting some friends to also join them on this trip. Our couple like to travel with others.
Things start to unravel
Quite sensibly, these folk visited their local travel agent and started to sort out the finer details. One thing the travel agent suggested was to take out travel insurance, particularly as the trip was almost a year away and cancellation fees, in case the trip had to be cancelled due to changing health, would be expensive.
The helpful travel agent could arrange the travel insurance on the spot: “we have the best travel insurance package money can buy. It is ideal for you!”
And, of course the travel agent would be paid a nice little commission on the sale of the insurance.
Oh, and how much would the travel insurance cost?
Well, given out couple are in their eighties, and the trip would include visiting Hawaii, the premium was in the vicinity of $3,500!
Perhaps we shouldn’t worry about the travel insurance!!!
These days, and for more mature travellers, travel insurance needs to cover two key contingencies.
Firstly, is the cancellations costs. If health changes after the insurance is taken out and the trip needs to be cancelled, the insurance should cover any cancellation fees.
While some travel insurance policies have a fixed sum insured for cancellation fees – say, $3,000, others allow the cover to be ‘dialled up’. And as the sum insured increase, so does the premium.
The second necessity is medical and evacuation expenses. And if travelling to the United States, these costs can be astronomical.
Our couple sensibly decided that they cannot afford not to have travel insurance.
Now, this where is my eaves-dropping changed from passive to active participation in the process!
I asked about cover for ‘pre-existing conditions’. The travel agent assured this couple that they would be fine with the $3,500 premium policy she was selling them. But it was time to read the ‘fine print’.
After downloading the travel insurers PDS (product disclosure statement) it become blindingly apparent that the $3,500 policy did not cover pre-existing conditions, apart from acne and similar ‘complaints’. In fact, as this couple are over 75, cover for pre-existing conditions could not be bought, at any price!
These days, no matter how active and involved an 85 year old is, it will be rare not to find they have some pre-existing conditions. In the case in point, the gentleman has had heart problems that are being controlled with medication. This is a pre-existing condition. If they arrived in Hawaii and had to be hospitalised because of this, he would have no cover. Or imaging having the heart problem in Fiji. I would hate to think what the cost of being medically evacuated back to Australia would be!
No, ignoring insurance, or even taking the $3,500 policy with its pre-existing conditions exclusion is probably a risk not worth taking.
How did it all end?
Sadly, not happily.
The cruise is off. The costs and the risk of not being adequately insured was just a step to far.
I am sure if this couple had decided to take the trip, it may have been uneventful health-wise. They would have had a wonderful time and amassed many great memories.
But there is also a risk – is that risk worth taking?
So, what are the lessons?
- Take the longer and more exotic trips when you are younger – travel insurance will be significantly cheaper.
- Read the fine print – don’t rely on your travel agent’s assurance that the insurance cover they sell you is appropriate.
- Understand what a pre-existing condition is. Know exactly what you are NOT covered for.
- Take out travel insurance at the time you book your trip. A lot can happened between booking and your planned departure date.