Retirement is, for many people, the ideal time to travel. After all, if you have the savings available to support all that globetrotting, you can explore different corners of the world without having to worry about using up your allotted vacation days or falling behind on job-related obligations.
As you map out your travel budget, you'll probably include expenses like airfare, hotels, entertainment, food, and even incidental costs like baggage fees and sunscreen (depending on your destination). But here's another expense you must add to your list: travel insurance.
What can travel insurance do for you?
Travel insurance is important for a number of reasons. First, if your trip is interrupted due to factors outside your control, like flight delays or weather problems, you eliminate the risk of losing the money you put down in the first place. The same holds true if your luggage is lost or stolen -- you'll be compensated in some shape or form.
But here's another reason why travel insurance is especially important for seniors. If you're 65 or older and therefore get health benefits through Medicare, you won't be covered for medical issues that arise outside the U.S. And if you're thinking you'll fall back on your Medigap plan, think again -- your supplemental insurance won't cover overseas healthcare, either. As such, without travel insurance, you'll risk racking up thousands of dollars in medical bills if something goes wrong. And if a serious injury results in a scenario where you require medical evacuation, the costs could be downright catastrophic.
That said, if you get health benefits through Medicare Advantage, as opposed to original Medicare, your plan might include coverage for medical care abroad. But check on that carefully, and make sure that coverage is comprehensive, because the last thing you want is to get stuck footing a bill that could be very expensive.
Will a travel credit card suffice?
Many avid travelers book their trips with travel reward credit cards, which often come with perks like bonus air miles and free checked baggage. Often, these cards do include enhanced coverage for travel issues that occur, like trip delays or interruptions.
But they don't always cover medical care abroad or medical evacuations, which, as mentioned, can be astronomically expensive. Before you assume that your credit card will provide all of the coverage you need, read up on the benefits you're entitled to and make sure they'll truly suffice.
Don't take chances
Investing in travel insurance could save you a world of money -- and hassle -- if an upcoming trip doesn't go as planned. The good news is that travel insurance generally isn't prohibitively expensive. For example, a 65-year-old couple taking a two-week, $6,000 trip from the U.S. to Argentina can secure comprehensive coverage for $408 that includes trip delays, baggage loss, and, more importantly, up to $15,000 worth of medical coverage plus an additional $100,000 medical evacuation benefit.
Of course, this is just one quote, and the price of travel insurance can vary based on your age, trip cost, and destination. But if you'll be trotting the globe quite a bit in retirement, it pays to plan on travel insurance as a matter of course.