How Are Your Premiums Determined?


For most plans, the premiums are based on only two factors -- your age and the trip cost that you will be insuring for trip cancellation although you can run the cost up by having a trip more than 30 days in length or by purchasing an optional feature like Cancel For Any Reason coverage. For these plans, the base premiums can be shown as a simple chart like the one below.
 

Trip Cost Age 0 - 30 Age 31 - 55 Age 56 - 70 Age 71 - 80
1001 - 1500 $58 $75 $101 $149
1501 - 2000 $78 $98 $137 $200
2001 - 2500 $98 $121 $169 $246

 


This makes it easy for the insurers to print up brochures that your travel agent can hand out to clients. But you'll rarely find this information at any online resource, either from the insurers themselves or from most of the major comparison sites. Because many travelers probably assume that the premiums are a simple percentage of their insurer trip cost they don't know that insuring $2013 can cost them much, much more than insuring $2000. Be sure to read our topic on how much to insure before insuring less than the full cost of your trip as there can be pitfalls to doing this.

Other plans, notably the CSA Custom plans (not the Freestyle plans), include a number of other factors in the premium calculation. For example, they'll figure in the length of your trip, the destination, your home location, and the number of days between when you buy the policy and when you depart. And other insurers such as iTravelInsured use the age brackets but not the cost brackets.

One great resource is Travel Insurance Center which has made an effort to post the age/trip cost charts for as many of the plans they offer as possible. For example, here's the chart for the TravelSafe Classic plan. and here's the chart for the CSA Freestyle plan.

Unfortunately, there's no uniformity across the industry as to the age and cost brackets. If you follow those links shown above you'll see that TravelSafe uses age six brackets but CSA uses eight.

If you're ever wondering why one plan costs so much more than another with similar coverages you should check the age brackets first. Look at the situation for a 80 year old traveler with a $2500 trip cost considering two sample plans (below). With Plan A he'll pay $246, with Plan B he'll pay $394 -- about 60% more. If that same traveler is only 79 Plan A stays the same but Plan B drops to $267 -- much more competitive.

One important thing to keep in mind when shopping for a policy is to be sure you're using your age as of the date you'll be buying the policy, not your age as of the time of travel. It can make a big difference as you can see in the example above.


Trip Cost Age 0 - 30 Age 31 - 55 Age 56 - 70 Age 71 - 80
1001 - 1500 $58 $75 $101 $149
1501 - 2000 $78 $98 $137 $200
2001 - 2500 $98 $121 $169 $246

 

Trip Cost Age 0 - 34 Age 35 - 59 Age 60 - 69 Age 70 - 79 Age 80+
1001 - 1500 $64 $82 $110 $162 $252
1501 - 2000 $85 $107 $149 $217 $322
2001 - 2500 $107 $132 $184 $267 $394


That's why you need to check your pricing every time before buying a policy because from one trip to the next it's possible that with the plan you've been using you've jumped into the next highest age bracket. Just because one plan has been the least expensive option for you in the past it doesn't mean it will continue to be so. Of course, cost should only be one factor in your buying decision but is is important.

And keep in mind that almost all insurers tack on a $5 to $10 per policy "admin fee" or "processing fee" to your purchase. You can sometimes avoid this fee if you choose to have your policy information delivered by email rather than regular mail.


travel insurance basics