Travel Insurance From Airline vs Insurance Companies. Which is Better?

Residents of Singapore have five options to choose from when looking to book a ticket with a Singapore-based airline. In large part, the decision will depend on the destination. Singapore Airlines serves destinations like New York, London, and Paris while regional airlines, like Scoot, focus on serving Southeast Asian destinations like Bangkok, Kuala Lumpur, and Manila. Regardless of your destination, however, you will likely be asked at checkout whether or not you would like to purchase a travel insurance from the airline. Are these products worth your money?

Travel Insurance's Value

Travel insurance can cover almost every facet of your travels from the cost of cancelling the trip, trip interruptions, trip delays or medical costs overseas. This insurance can even cover the cost of evacuation for you and your family during a natural disaster or to bring your remains home in the event of death. Additionally, the majority of these policies also cover terrorist-related events which are unfortunately becoming more prevalent in the 21st century.

While these types of events are rare, the financial burden to travellers who experience them can be significant. A broken leg can cost thousands of dollars in hospital bills, and an emergency helicopter trip to get you to the hospital could double this amount. For this reason, at least considering the purchase of travel insurance can be a prudent practise for those whose trips involve a reasonable chance of injury or travel interruptions.

In past articles, we have explored this topic deeply, researching the costs and benefits of travel insurance products and providing our recommendation for the best travel insurance programs available in Singapore. We now want to compare these plans from insurance companies to travel insurances offered by the airlines in Singapore.

Travel Insurance: Airline vs Insurer

In our research, we have found that most private travel insurance programs offered by insurance companies tend to provide higher maximum coverage amounts for lower prices than those offered by airlines. Part of the reason is that when the insurance is offered directly from the insurance company, as is the case with insurers like Allianz Global Assistance, FWD or Budget Direct, there are no middle man. In contrast, when you purchase travel insurance through an airline, airlines tend to receive a portion of the price of insurance as a commission, thereby inflating the price that a consumer ends up paying. Therefore, you can eliminate the middle man and pay a lower price by going directly to the insurance company.

As you can see from the table above, there are significant differences in the type of coverage that are provided by each Singapore-based airline. For this reason, it is important to understand the types of risks you are facing when traveling. For a business traveler, a baggage delay could mean a missed meeting or presentation material stuck in transit. For a personal traveler who will be surfing, zip lining or hiking through mountainous terrain the personal accident and medical coverage will be most critical. It is also important to note that the majority of these policies are priced for travelers between the age of two and 70 years old. If you are over age 70 or traveling with an infant, there may be special pricing requirements to consider before your next trip.

Before your next trip, consider what risks you are facing and determine whether this travel insurance is right for you and your family.