Do you need annual travel insurance?

Key points

• Annual travel insurance provides coverage for multiple trips during one year — it will not cover a year-long trip. 
• Basic plans typically cover medical expenses and emergency medical evacuation — adding coverage for trip cancellation and trip interruption, if available, may increase the cost of your plan.
• Annual travel insurance may work for travelers who take multiple trips per year and want to avoid purchasing several single-trip travel insurance policies.

If you travel frequently, you may want to consider purchasing an annual travel insurance policy. These policies, also known as multi-trip travel insurance, offer coverage for several trips taken within a year. 

Although multi-trip travel policies may not provide as extensive coverage as a single-trip travel insurance policy, they can be cost-effective and convenient for frequent travelers. Consider the pros and cons before deciding whether a multi-trip policy is the right choice for you.

What is annual travel insurance?

Annual travel insurance is a policy that covers multiple trips taken within a year from the effective date of the policy. Basic annual policies often do not include trip cancellation insurance, but this coverage may be available to purchase as an add-on.

Basic multi-trip policies can include:

• Trip delay coverage. This pays for meals, hotels and transportation if your trip is delayed due to severe weather or other listed reasons.
• Trip interruption coverage. This covers expenses if you need to return home due to a death, illness, injury, family emergency or other listed reason.
• Medical expenses coverage. This covers emergency medical expenses such as X-rays, hospitalization and prescription medication.
• Medical evacuation coverage. This provides emergency transport so you can receive immediate medical treatment at the nearest adequate medical facility.

Sometimes annual travel insurance policies provide coverage for pre-existing medical conditions, but details vary by plan.

Multi-trip plans typically have a maximum trip length limit of 30 to 90 days per trip during a 365-day period. The most common type of multi-trip plan is an annual policy, but you may also be able to purchase other term lengths, such as a six-month term for students studying abroad. 

Pros and cons of annual travel insurance

Only certain types of travelers will get the most out of multi-trip travel insurance policies. Consider these pros and cons to see whether an annual travel insurance plan is the right fit for you.

Pros

• Convenient. Covers you for multiple trips a year without having to purchase coverage each time.
• Low cost. Can be less expensive than purchasing a single-trip travel policy for each individual travel stint.
• Broad coverage. Covers multiple trips, including trips of different lengths and destinations.

Cons

• Exclusions. Many basic annual policies exclude trip cancellation and trip interruption coverage. You may be able to add these benefits for an additional cost.
• Limited benefits. If you want to insure an expensive trip, or if you want high medical coverage per trip, single-trip travel insurance may be a better choice. Annual travel insurance may have low limits, such as $10,000 or $20,000 for emergency medical expenses.
• May not be necessary. If you take mostly domestic trips where you are covered by your U.S. health insurance, it may not be worth the expense to purchase an annual policy.

Annual travel insurance vs. single-trip insurance

Annual travel insurance and single-trip travel insurance have some distinct differences.

Annual travel insurance

• Covers an individual for multiple trips taken within a specified time frame, usually one year.
• Typically bundles coverage for travel medical, emergency medical evacuation, baggage delay, baggage loss and travel delay. Other coverages may be available for an additional cost.
• Might have a limit on the length of individual trips, such as 30 to 90 days. 
• May be more cost-effective than single-trip insurance for frequent travelers who take multiple trips throughout the year.
• May have age requirements, such as being 18 to 65 years to buy a policy.

Single-trip travel insurance

• Covers an individual or family for a single, specific trip.
• Typically covers emergency transportation, baggage delay, baggage loss, travel delay, trip interruption and trip cancellation. 
• More cost-effective for individuals who only take one or a few trips per year.
• The typical length of a single-trip policy is 180 days.
• Costs an average of 5% to 6% of your trip’s total prepaid, nonrefundable expenses.

What to consider before buying annual travel insurance

Before buying annual travel insurance, consider these factors:

1. Coverage. Verify what is and isn’t covered by the plan. Look for coverage limits for medical benefits and see if they’re high enough for the trips you have planned. 
2. Riders. Check if there’s additional coverages available that you may need. For example, you may find adventure sports are excluded or require a rider to be covered. Buy additional coverage if needed.
3. Claims process. Choose a reputable provider with a smooth and efficient claims settlement process, including cashless options. Look for experiences shared on social media or recommendations from insurance aggregator sites.
4. Pre-existing medical conditions. See if the plan provides a pre-existing medical condition waiver if certain conditions are met. If not, and this is important to you, consider shopping for a single-trip travel insurance plan with this option.

Annual travel insurance cost

Rates and coverage for annual travel insurance vary based on factors such as your age and the insurance company you choose. 

Here are some sample quotes for a 45-year-old traveler from Texas.

• AIG Travel Guard Annual Plan — $259.
• Allianz AllTrips Basic — $63.
• Allianz AllTrips Prime — $280.
• Allianz AllTrips Premier — $435. 
• Allianz AllTrips Executive — $485.
• Nationwide Annual Travel Pro Plan — $59 (or $145 to $719 if you add trip cancellation coverage for various amounts). 

For comparison, the average cost of travel insurance for single trips is typically around 5% to 6% of your total trip cost. 

When deciding between a multi-trip or single-trip travel insurance plan, take into account the number of trips and the total number of days of travel you’re planning in a 12-month period. An individual or family taking several short trips may spend less by purchasing single-trip plans. However, if you’ll be traveling for 40 or more days on multiple trips within a year, a multi-trip plan might be a better option. 

Where to buy annual travel insurance

Annual travel insurance can be purchased from various sources, including:

• Travel agents. Some travel agents offer travel insurance as part of a package deal or can help you purchase a separate policy.
• Travel insurance websites. If you know you want to buy an annual travel insurance plan from a specific company, you can usually buy it online on their website or by calling and speaking to an agent.
• Insurance providers. Many insurance companies offer travel insurance. You can also ask your insurance provider if your homeowners insurance or auto insurance offer any relevant benefits. 
• Online marketplaces. Online marketplaces offer quotes from multiple insurance providers, making it easier to compare policies and find the best coverage.
• Banks and credit card companies: Some banks and credit card companies offer travel insurance as a perk to their customers.

Want to compare travel insurance companies? Best travel insurance companies

Do I need annual travel insurance?

Whether or not you need annual travel insurance depends on your individual travel needs and habits. You may want to consider purchasing a basic annual travel insurance plan if you:

• Go on multiple trips a year. If you plan to be out of the country for 40 or more days on various trips during a year, it may be more cost-effective to purchase a multi-trip insurance policy. However, you should be aware of the single-trip travel insurance benefits and coverage limits you may be giving up by buying a more affordable annual policy.
• Don’t want trip cancellation insurance. Typically, trip cancellation is not included in basic multi-trip policies, but you might have the option to add it on for an extra fee.
• Want added peace of mind. While a basic annual policy typically won’t include trip cancellation and typically doesn’t include trip interruption benefits, it will include medical-based benefits such as coverage for medical expenses and evacuations. 
• Take last-minute trips. The process of picking out and purchasing a single-trip policy can take some time and concentration, so having an annual policy already in place may be more convenient for the last-minute jet setters.