Travel insurance: Does your credit card have you covered?

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If you’re planning a trip overseas, the saying goes if you can’t afford to buy travel insurance, you can’t afford to travel. Suffice to say, you’d be foolish to consider venturing to a foreign country without adequate insurance in case of sickness, injury, travel cancellation or delays, or accidental damage to your belongings. Unfortunately, travel insurance doesn’t come cheap, unless your credit card provider has you covered.

Cover for a couple spending just two weeks in New Zealand can add up to $260 or more. But you may already have free travel insurance and not even know it. ‘Gold’ or ‘Platinum’ credit cards often include free travel insurance, but there are some conditions attached. Most cards require that you spend at least 50 percent of the pre-travel expenses on the card. For example, if you’re booking flights and you pay for them on your ‘Gold’ card, this may qualify you for the free travel insurance.

How do I find out if I qualify for free travel insurance with my credit card?

Not all Gold or Platinum cards have free travel insurance, but many do. If you don’t have such a card, all is not lost. With the money you save by getting free travel insurance, the annual fee of most Gold or Platinum cards would be covered. Therefore, it could be worthwhile applying for such a card before you start booking flights and paying for that overseas trip. Most cards provide good cover for yourself and a partner at no extra cost, so if you plan to travel once or twice in the next few years it’s definitely something worth considering.

Some cards also come with a rewards program, though the annual fee for these cards is usually higher. If all you want is the free travel insurance then you should try to find a card with a low annual fee.

A card with a rewards program in addition to free travel insurance may sound tempting but you’ll pay for the privilege. This may be worthwhile if you’re spending a lot on the card, but if you already have a primary credit card with a rewards program, or if you don’t spend much each month, the extra cost for having a rewards program attached to the card may not be worthwhile.

So next time you’re planning a trip, consider signing up for a credit card with free travel insurance. The savings could really add up, even if you only head overseas once a year.

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