The summer travel season is about to begin. And prices this year are making travel more expensive than ever. With that in mind, we’re providing several resources to help you keep costs in check.
Traveling with Perks
In our latest episode of Wealthy Behavior: Talking Money and Wealth with Heritage Financial, our very own “Heritage Points Guy”, Joe Waters, Jr., CFP, shares his top tips for using credit card rewards to lower travel costs and even get some freebies. Check out this episode of our podcast, Are You Getting Paid for the Money You Spend, to hear:
- the credit cards that currently offer the best travel perks or cash back incentives
- the specific kind of points you want to accumulate to get the best bang for your buck across multiple travel partners
- special perks that may be available to Heritage clients on some of the best rewards cards
Insuring Your Trip
Now that you’re ready to book your next trip, should you buy travel insurance?
When it comes to this type of insurance, you want to make sure you’re not overpaying for protection that may not be 100% necessary. Especially now, the cost of flights and hotels are high enough. Add in travel insurance, and you could quickly acquire more costs than you originally planned.
There are a variety of factors you should consider before investing in a travel insurance policy. Most important, you want to make sure the value of the coverage outweighs the added cost. For people on a tight budget, travel insurance may not be worth the financial stress involved. However, for more expensive vacations, travel insurance could quickly prove to be a good use of money.
When to Consider Travel Insurance
If you’re taking an expensive vacation, it makes sense to consider insurance. Flights, hotels, and transportation add up. And they may have non-refundable fees. Your credit card might reimburse you for a portion of these expenses. But you could easily incur costs beyond its limit. Even if your travel provider offers a reimbursement policy, it may not be as flexible as travel insurance. Travel insurance could reimburse you for a myriad of reasons, including unexpected work requirements, illness and military deployment. Additionally, you may not have a restriction as to when you can cancel your trip, which is not always the case with travel providers.
The longer and more expensive the trip, the greater potential for unexpected circumstances. Accidents happen, especially when you’re in an unfamiliar place doing activities you don’t normally do. Travel insurance can protect you from significant hospital fees in the event of an accident or emergency. And if you already have a pre-existing condition, travel insurance can help make sure you don’t spend an obscene amount of money if your condition worsens during your time away from home.
When exploring your travel insurance options, buying at the time of booking or shortly after will get you the best price. If you’re unable to pay for coverage within 10 to 15 days of booking your trip, it might be best to avoid travel insurance altogether to reduce additional fees and lower-quality protection.
When to Skip Travel Insurance
If you’re someone who enjoys taking shorter trips, travel insurance may not be worth it. The cost of a policy could potentially cost more than the trip itself, or at least add up to an amount beyond your total travel expenses. The airline and hotel you choose may be able to reimburse your expenses or offer a credit if you decide to cancel. It’s important to read the fine print before making these payments in case refunds are limited or non-existent.
For those who have car insurance and a credit card specifically designed for travel, you may already be paying for the protection a travel insurance provider could offer. Instead of paying more money for double the coverage, you could instead maximize the policies you already have.
Evaluate Your Trip Thoroughly Before Committing
Extra protection could provide you with the peace of mind you need to fully enjoy your vacation. But, depending on the cost of the insurance policy, it may not necessarily be worth your time and investment. If you’re going on a relatively short and inexpensive trip within the states, the amount of money you could lose may end up being less than what you would pay for a travel insurance policy.
With so many providers out there, you want to make sure that if you are going to get travel insurance, you get the coverage that makes the most sense for you. From the location of your trip to potential medical surprises, it’s a good idea to outline your top concerns to determine which policy best suits the needs of both you and your family.