Peter M. Zollman never stops traveling. In the last few months, he has been to Berlin, Lisbon, New York, Las Vegas, and visited Utah’s famous national parks. But recently, he’s started to wonder if an annual travel insurance policy might be right for him. An annual policy (also known as multi-trip) covers all your trips for a full year.
“What’s the good cover?” asks Zollman, a marketing consultant based in Orlando. “And what are the pitfalls of annual insurance?”
Travelers like Zollman actually get annual travel insurance. But he is right – there are some important limitations.
“Annual plans are designed for travelers who are taking multiple trips a year and don’t have set dates,” explains Bailey Foster, vice president of travel insurance at Trawick International.
For example, Trawick’s annual plans cover trips of up to 30 days. They also include situations such as trip cancellations and pandemics.
Annual travel insurance has always been a niche product, marketed to business travelers, digital nomads and other frequent travelers. But it’s becoming more common as more travelers want to cover all the time, and it’s changed since the pandemic.
So let’s go over some of the basics: What is annual travel insurance? What are some of the restrictions? How much does it cost and who should get it? Finally, and most importantly, how do you buy one of these specialty insurance policies?
What is annual (multi-trip) insurance?
Annual travel insurance covers your trips for a full year. Your cover starts with the effective date of the policy.
“Most annual plans focus only on medical evacuation and emergency coverage or emergency medical evacuation coverage,” explains Meghan Walch, product director for MyTrip Insurance, a travel insurance comparison site. “Some annual or multi-trip plans may have limited baggage coverage.”
Here’s a breakdown of a basic annual travel insurance policy:
- Delay. If you are delayed for one of the reasons covered in your policy, your policy may have benefits, which will cover the cost of hotel, meals and transport.
- Medical evacuation. Your travel insurance company will transport you to the nearest medical facility for emergency treatment.
- Medical expenses. This benefit covers emergency medical expenses, including doctor’s visits or hospitalization.
- Trip break. If you have to end your trip early due to a covered reason such as illness, injury or death, an annual travel insurance plan will cover your documented travel expenses.
I have details on how to buy the best policy in my Free travel insurance guide,.
What are the limitations of an annual travel insurance plan?
Most annual plans have a time limit for each trip. Usually, it will cover a trip anywhere from 30 to 90 days, but sometimes less.
“Some plans require the insured to be covered by a home health insurance plan,” notes Joe Cronin, president of Conradh na Gaeilge. International Citizen Insurance.
Pay particular attention to the wording of the policy, experts warn. For example, Walch says that coverages offered in comprehensive travel insurance plans, such as trip cancellation, trip interruption, and travel delay, may not be included in a typical annual travel insurance plan.
Annual insurance may also have other limitations that you won’t find with a regular policy, says Christina Tunnah, general manager of marketing and brands at Nomads of the World.
“More adventurous travelers should note that certain activities, such as sky diving or bungee jumping, may be excluded from annual plans,” she says.
How much should you pay for an annual policy?
A multi-trip policy often costs much less than buying travel insurance for single trips.
“How much you pay will depend on a number of factors, such as your age and the deductible you choose,” explains Angela Borden, product marketing specialist at Seven Corners.
She says plans cost between $250 and $300 for one traveler, with a reduced price for additional family members on the same plan. So it’s an economical choice if you know you’ll be taking multiple trips in a year, especially with your family, according to Borden.
“The cost is based on the level of trip cancellation coverage you choose,” explains Tim Dodge, vice president of marketing at Arch RoamRight.
Annual policies are priced according to the cover limit. Your options are usually $2,500, $5,000, $7,500 or $10,000 per year in claims. The average cost of an annual policy that insures $10,000 in trip expenses is around $450. Arch RoamRight, for example, has plans that start at $192 per year.
Who should consider an annual travel insurance plan?
Annual travel insurance is not for everyone. The most complete policies are tailored to individual trips. But an annual policy can be useful for frequent travellers.
Here are the people who should consider a multi-trip plan:
If you travel a few times a year
As the name suggests, an annual travel insurance policy is suitable for someone who wants cover for a longer period of time and multiple trips. “Anyone who travels more than three times a year should consider purchasing an annual travel insurance policy,” says Daniel Durazo, director of external communications at Allianz Partners United States of America . “It is a great advantage for regular travelers to only buy travel insurance once a year, which covers all trips made that year, rather than insuring each trip separately.”
If you are a corporate traveller
“These policies are suitable for business travellers, or people who travel frequently with little financial risk on trip costs,” explains Laura Heidt, insurance desk manager at Brownell’s Travels, If all you need is emergency medical care, an annual policy is right for you. But if you are insuring multiple luxury leisure trips, or family trips, the cover levels are probably too low.
If you are a young digital nomad
Annual travel insurance is best suited for those who make multiple small trips throughout the year. This could include active retirees or avid hoarders. Narendra Khatri, principal of Insubuy, cautions that some annual policies won’t cover you if you’re over 65. “Also, keep in mind that depending on the policy, each trip must be limited to a certain number of days,” he says. If you travel further than that, consider an independent policy.
There are other benefits to an annual travel insurance policy. For example, if you currently like to travel, a multi-trip policy may be suitable for you. No need to call a travel insurance company before you leave — you’re already covered. And, of course, an annual policy is much cheaper than buying stand-alone policies for multiple trips per year, even though your coverage is more limited.
How has annual insurance changed since the pandemic?
Although the covers in annual or multi-trip policies have remained fairly consistent during the pandemic, there have been some changes recently.
They cover Pandemic costs
“Some policies now cover expenses related to COVID-19, such as medical treatment and quarantine costs,” says Allen Josh, CEO Working Holiday. “In addition, some policies have expanded their cancellation and trip interruption coverage to cover events related to the pandemic.”
Some of the numbers have shifted – and not in your favor
Eagle-eyed insurance watchers have noted a number of changes to cover limits, including maximum trip lengths (some are now as little as 15 days) and reimbursement for accidents or medical emergencies. “The type of coverage can be limited,” notes Linda Chavez, CEO of Seniors Life Insurance Finder. Bottom line: Read the annual travel insurance policy carefully before buying.
Some definitions have been clarified
Travel insurance observers say that while the framework of the annual policy has remained the same in recent years, some of the definitions have been edited or clarified. “Since the pandemic, annual travel insurance policies have seen some significant changes,” notes Hans Mast, travel expert with Golden Rule Travel. “It is essential to thoroughly review the terms and conditions of the policy, as coverage may vary from provider to provider.”
In short, while the basic framework of annual travel insurance hasn’t changed much before the pandemic, there are a lot of smaller changes under the hood.
How to buy an annual travel insurance policy
So how do the pros do it? I asked Dorothea VanHerwaarden Dowling, senior vice president at Axis Insurance, how she insures her trips with an annual policy. Dowling says she has used her annual policy several times, both in the United States and in Mexico. She says it’s especially helpful for trips to a country with an expensive medical system (like, ahem, the United States).
“I maintain a $0 deductible and $10 million in hospital emergency medical coverage,” she explains. “Most travel medical policies will cover medical costs for Covid, but not your long stay. You’ll want to tackle that as a rider.”
Dowling, 36, has an annual travel policy with worldwide coverage that costs her about $250 a year.
I’ve also had an annual travel insurance policy in the past, which, like Dowling, I’ve used over and over again. I would have continued to use it, except that my trips started longer than 30 days, so the policy no longer covered me. I had to switch to a normal policy. Zollman, the frequent traveler, took out an annual policy from Allianz.
Bottom Line: For the most frequent traveler, an annual or multi-trip policy is a viable option that can save you a lot of money. Pay attention to the numbers – and make sure everything is covered before you leave.