Travel insurance protects net worth

If your clients are taking a quick spring break to a U.S destination, make sure they pack more protection than just sunscreen—they need to buy travel health insurance. A medical emergency outside of Canada can pose a serious threat to their overall financial well-being.

“Spring Break is a popular time to travel, whether it’s a quick one-day cross border stop with the kids or a longer trip to a sunny destination,” says Tim Bzowey, vice-president, travel with RBC Insurance. “What parents may not be aware of is the high cost of medical care outside Canada for minor injuries like sprains or an asthma attack.”

Out-of-pocket costs for relatively minor emergencies can put a damper on the vacation, sometimes costing hundreds of dollar. A more severe emergency, such as a broken bone, could affect long-term plans for education or retirement.

Provincial health insurance plans will usually pay for a small portion of out-of-country medical costs, but will fall far short of the full cost. A broken leg in Florida could cost as much as $35,000 to mend, according to RBC, but many provincial plans will pay only $2,000.

Many Canadians have discovered the huge savings to be had by travelling to a U.S. airport near the border before flying on to their final destination. Bzowey points out that travellers’ insurance should be in effect from the day they leave home, and not the date of their flight, which may differ.

“Employer plans or credit cards may offer travel insurance coverage, but it’s wise to compare benefits,” adds Bzowey. “Credit cards often provide coverage for a shorter number of days or restrict the amount you can claim, and employment benefits may not cover all medical emergencies or may limit travel benefits.”

Employer-sponsored benefits may also have an age limit for dependent children travelling with the employee. Third-party travel insurance can also cover childcare costs in the event of the parent being hospitalized.

Also,many out-of-country hospitals may require up front payment for treatment, which could amount to thousands of dollars.

(03/09/10)