In the wake of prolonged lockdowns and restrictions, the decline of the Covid-19 pandemic has unleashed a wave of wanderlust among individuals, prompting them to embark on journeys across India and beyond. According to data from the Reserve Bank of India (RBI), Indians have splurged a staggering USD 10 billion on travel between April and December. Furthermore, there has been a remarkable surge in the number of Indians venturing abroad, with an estimated 18 million individuals traveling during the same period.
As a result, travel insurance has also seen an uptick in demand as travel is resurging, with reports suggesting more than 76% of travellers are buying travel insurance, especially after the pandemic. Travellers are moving towards booking their trips more in advance and opting for travel insurance as abundant caution in a post pandemic world.
India’s tourism statistics in 2022 indicate a noteworthy increase in the availability of hotel rooms, with a greater emphasis on homestays and staycations. Government-approved rooms across the country have risen to more than a lakh and approved tour operators have leapt to 1,224, showcasing a leap in interest in travel.
In 2021, India’s travel and tourism industry contributed approximately USD 178 billion to the country’s GDP and the travel insurance market is estimated to touch USD 2011 million by 2027, growing at a CAGR of 17.65%. However, it is essential to note that travel insurance in India currently accounts for less than 1% of the global travel insurance industry, indicating ample room for growth and development in this sector.
There has been a steady shift in trends fueling the sector. While it is interesting to see some of the newer trends coming up in the travel sector, it is vital to plan your trip well in advance to eliminate last-minute hurdles. Here are some tips on how to plan a trip financially well with a credit card.
So, if you’re planning your next getaway, sending your child off to university abroad or relocating overseas, you’ll want to make sure you’re covered with the best travel insurance to suit your specific needs. Consequently, travellers must increasingly look to purchase a comprehensive travel insurance policy to mitigate potential financial losses from unforeseen circumstances during their trip.Why is travel insurance a necessity?
As the tourism industry revives and gains momentum post-Covid, travellers have become aware of the need for comprehensive coverage that protects them from unexpected events such as medical emergencies, trip cancellations, loss of personal belongings, and more. Travel insurance acts as a safety net, providing financial support and assistance during challenging times, both domestically and internationally.
The rise of tech
One of the key drivers behind the growth of the travel insurance sector is the rise in technological advancements. The adoption of new technologies has revolutionized the way insurance companies operate, making it easier for travellers to access and purchase policies digitally.
With just a few clicks, individuals can now compare different travel insurance options, customise coverage according to their specific needs, obtain policy documents instantly and report claims on the fly. Technology has streamlined the entire process of comparison, purchase, and claims, offering convenience and transparency to customers. It is noteworthy to mention about parametric covers and claim settlements in case of flight delay and flight cancellations. Also, tech enabled value-added services and assistance services like pre-trip information, important things to carry while on a trip, etc., provide much needed awareness to customers.
Travel insurance benefits
Travel insurance covers various aspects, ensuring comprehensive protection for travellers. The two fundamental covers of travel insurance are medical insurance and other non-medical trip related coverages. Medical insurance covers emergency medical expenses, hospitalization, and evacuation, which can be exorbitantly expensive, especially in foreign countries. Other non-medical trip related coverage protects the policyholder against the loss of personal belongings, trip cancellations, trip curtailments, baggage delay and other unforeseen events that may disrupt travel plans.
However, travel insurance plans come with limitations. There are circumstances or situations where medical coverage may not apply such as medical expenses due to pre-existing medical conditions or participation in adventure sports. Therefore, customers should check and verify if their chosen insurance plans can meet their requirements.
Additionally, travellers should evaluate any existing travel insurance benefits that might be available to them along with their health insurance policy or any other credit/debit card benefit.
The expansion of the TCS scope under the income tax law and exchange control regulations also has consequences from a Goods and Service tax (GST) perspective. Any services provided by a domestic operator are chargeable to GST which adds to the exchequer. This development is likely to lead to a loss of GST collections and such loss may well exceed the income taxes collected, which in any case, may not be incremental tax revenues in most cases.
Top things to remember while taking travel insurance
When purchasing travel insurance, it is essential one considers a few key factors to ensure comprehensive coverage and a smooth claims process. Firstly, one must compare travel insurance policies offered by insurance companies by evaluating coverage, deductibles, assistance services, claim processes, premiums and carefully read and understand the policy terms and conditions, including coverage conditions and exclusions.
Secondly, one must disclose pre-existing medical conditions, if any, to avoid claim rejections. Thirdly, one should also assess travel needs and select an insurance plan that aligns with one’s requirements. Lastly, it is also important to give significant weightage to the brand of the insurer who has been dominant in the travel insurance space.
Post policy purchase, one must always keep a copy of the policy document, emergency contact details, and claim procedure information readily accessible during the trip.
Conclusion
The travel insurance market plays a vital role in safeguarding travellers from the unexpected and providing them with financial security during their journeys. As the tourism industry recovers and flourishes in the post-Covid era, the demand for travel insurance is expected to rise multi-fold. On the other hand, it is crucial for travellers to be well-informed and make informed decisions when selecting a travel insurance policy. By understanding the types of coverage available and considering essential factors, travellers can enjoy worry-free journeys and embark on new adventures with confidence.
Remember, travel insurance is not just an option; it is a necessity to protect yourself and your loved ones.
The author is Senior Vice President – Health Product & Process, Tata AIG General Insurance
DISCLAIMER: The views expressed are solely of the author and ETTravelWorld.com does not necessarily subscribe to it. ETTravelWorld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.
