4 Reasons To Not Use A Free Travel Insurance

*Disclaimer: All bank and/or credit card companies offer different terms and conditions for the free travel insurance offered. These conditions as stated above may not be inclusive or applicable for all bank and/or credit card companies' free travel insurance.

Sign up for a credit card and get free travel insurance? If this sounds too good to be true then it probably is because it is. While Singaporeans are avid travellers with us going on an average of 5.2 trips a year,¹ many may not realise the importance of getting proper travel insurance. This is evident with only 1 in 2 Singaporeans purchasing travel insurance for their trips.² As such, when you meet with a travel crisis abroad, who should you then turn to for help? While some may mistakenly think that travel insurances are all the same, this is in fact far from the truth. In this article, we highlight the 4 reasons to not use the free travel insurance offered by banks and/or credit card companies.

(See "2019 Holiday Hack: Maximise Your Leave By Travelling Over These 5 Dates")

#1 You may not be eligible for the complimentary travel insurance

Credit card companies often advertise free travel insurance as one of their card benefits. However, did you know that there are certain pre-requisites that you have to fulfil in order to be eligible for this? In order to be eligible, ensure that the full fare of your round trip ticket is charged to the respective credit card. In the event that you do not do so, you would then be ineligible for this benefit.

(See "Best Travel Insurance Singapore")

#2 Cash payments may not be claimable

If you incur additional costs for hotel bookings and refreshments as a result of a flight delay, do ensure that all payment is made through your credit card. This is because the conditions of some free travel insurance indicate that you will only be compensated for any credit card charges incurred. This means that you will only be covered for what is paid using your credit card with claims reimbursed through the credit card. In the event that you pay for these additional expenses in cash, you then run the risk of not being able to make claims for them.

(See "The Beginners Guide To Understanding Insurance")

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#3 Your travel companions may not be covered

As coverage for this free travel insurance is only given to the credit card holder and is non-assignable, your travel companions may not receive any coverage.

_{Note: Figures shown are an estimate and may differ between policies.}

There are 2 typical scenarios that may play out when you try to make a claim using the free travel insurance. However, as shown in the image above, the coverage offered from free travel insurance will be less than that of standalone travel insurance with the limits capped at a lower amount. Therefore, if you are looking to receive comprehensive coverage for your travels, you may then find your free travel insurance lacking.

(See "8 Countries Singaporeans Can't Travel To Without A Visa")

#4 Limited coverage

In most of these free travel insurance, the coverage offered tends to be extremely limited. As compared to a standalone plan where comprehensive coverage is offered, these free insurance typically only covers for 3 aspects: travel inconveniences, travel accident and emergency assistance. The extent of coverage would also range between plans with some only offering travel accident coverage while others may offer coverage for all three. Moreover, the coverage offered would be limited with each benefit capped at a low amount. Some plans may also require you to pay an excess before you are able to make a claim.

(See "Travel Crisis And How To Handle Them")

With travel insurance offered affordably, we would not recommend using the free travel insurance. Instead, consider getting a proper standalone travel insurance policy to enjoy comprehensive coverage and have a peace of mind when you travel.

_{Note: Prices shown are before discounts and are accurate as of 30 December 2019.}

_{*Promotions shown are accurate as of 30 December 2019 with changes subjected to the insurer's discretion.}

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For specific insurance enquiries, you can contact us here.

^{1Source: https://www.todayonline.com/singapore/sporeans-took-average-52-trips-last-12-months-criteo}

^{2Source: https://sg.finance.yahoo.com/news/more-half-singaporean-travellers-don-050500220.html}

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