Travel Insurance Key Terms

Know the key words and phrases commonly found in travel insurance contracts

When business sends you traveling, particularly overseas, having an adequate travel insurance policy guarantees you will have medical coverage outside of your primary health insurance policy. A good travel insurance policy will also protect you against losses if you need to unexpectedly return home in the middle of a trip or if you are forced to evacuate due to a natural disaster. Insurance contracts can be confusing, so knowing the commonly used key terms will help you purchase the right policy for your needs.

Premium

The premium is the total cost of purchasing a travel insurance plan. Depending on the type of plan, the premium may be paid either in full at the time of purchase or in installments.

Exclusions

Exclusions are specific events that are not covered by the insurance policy. They must be clearly outlined in the insurance contract. Exclusions run the gamut from injuries sustained while participating in an extreme sport to cruise cancellations.

Pre-existing conditions

Most insurance policies define pre-existing conditions as a medical condition that was diagnosed prior to obtaining health insurance. Travel insurance policies that exclude pre-existing conditions will not pay a claim for medical attention sought as a result of a pre-diagnosed condition. Insurance policies that do cover pre-existing conditions are available.

Hazardous sports and activities coverage

Those who are planning on participating in high-risk activities during their travels will need hazardous sports and activities coverage added to their travel insurance package. This type of coverage pays claims on injuries or illnesses sustained while taking part in activities such as scuba diving, mountaineering, bungee jumping and snowboarding.

Trip interruption insurance

Trip interruption insurance provides coverage if the traveler must unexpectedly abandon the trip. Coverage ranges from paying for airfare if the traveler must return home to deal with a personal emergency to covering the costs of an emergency evacuation.

Usual, customary and reasonable charges

Usual, customary and reasonable charges are often abbreviated as UCR charges. Before paying a claim, the travel insurance company compares the rates of medical providers for services rendered. By analyzing the rates, the company determines a base rate for a specific service it will pay out on behalf of the policy holder.

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