Travel insurance: How these policies work and what flyers should know before their next overseas trip

Travel insurance is becoming a core part of trip planning as travellers are increasingly seeking financial protection against disruptions and emergencies during overseas trips, internal data from Policybazaar shows. Policy issuance grew 22% year-on-year in 2026, reflecting "high geopolitical sensitives” and a stronger focus on travel preparedness rather than seasonal demand.

From medical emergencies and trip cancellations to baggage loss and evacuation support, these policies are designed to cover a range of unforeseen situations that may arise during travel. According to Policybazaar's data, the number of flyers opting for coverage above $250,000 ( ₹2.36 crore) has doubled.

The market has shifted from travellers opting for basic coverage of around $100,000 in 2022–23 to choosing more risk-aware plans with coverage exceeding $250,000 in 2026, the insurance aggregator said in a report.

“This surge is driven by rising global medical costs and evacuation risks,” the report said. This also shows that while travel insurance was once viewed as an optional expense, many travellers are now evaluating coverage more carefully before booking international trips.

What all does travel insurance cover?

Policy features, exclusions and claim conditions in travel insurance policies can vary significantly, making it important to understand how these plans work and what they actually cover before purchasing one.

Travel insurance generally covers a range of emergencies that may arise before or during a trip, including medical treatment, hospitalisation, flight cancellations, loss or delay of baggage, passport loss, and bounced hotel booking, among others.

“Most comprehensive travel insurance plans today offer coverage for situations such as passport loss, baggage theft, as well as certain cyber fraud-related incidents, depending on the policy terms and insurer,” according to Manas Kapoor, Business Head, Travel Insurance at Policybazaar.

Many policies also include emergency evacuation, repatriation and personal liability coverage, especially for international travel. Some insurers additionally offer optional covers for adventure sports, pre-existing illnesses, home burglary and loss of personal belongings, according to Policybazaar.

Coverage and claim conditions, however, vary across insurers and plans. For instance, trip cancellation benefits are usually available for unforeseen events such as medical emergencies, natural disasters or the death of an immediate family member, and typically apply to prepaid, non-refundable expenses. Insurers also specify exclusions and coverage limits in policy documents, making it crucial for travellers to review the terms before buying a plan. In some cases, you may need to purchase some add-ons to receive more benefits.

Why certain claims can get rejected?

Flight cancellation or flight delay claims are generally rejected when the delay does not exceed the minimum deductible or waiting period mentioned in the policy, according to Kapoor.

“Claims may also get rejected if travellers fail to provide the required documents and proof, such as airline delay certificates, boarding passes, tickets, or expense receipts,” he explained.

Additionally, if there are certain exclusions under the policy like cancellations due to pre-existing known events, voluntary trip cancellations, or situations not covered under the policy terms might also lead to claim denials, he said.

Are premiums on such policies more for countries with higher healthcare cost?

Travel insurance premiums are generally higher for destinations such as the United States, Canada, and parts of Europe because healthcare and emergency medical treatment costs in these regions are significantly high compared to majority of Asian countries, the expert told Mint.

The factors that determine the premium of a travel insurance policy are:

• The traveller’s destination
• Trip duration in a certain country
• The flyer's age
• The sum insured or coverage amount selected

Travel insurance claims take around 3-5 days for settlement once everything is sorted but it may also take as many as 7-10 days from the time of intimation, Kapoor said, adding that some comprehensive policies offer travellers with benefits like instant gratification where claims are settled within few hours.

“Summer 2026 shows that Indian travellers are not pulling back due to geopolitical sensitivities, they’re simply travelling smarter. We’re seeing a significant shift toward Asia-Pacific destinations, with Japan, Thailand and Vietnam witnessing strong growth,” he said.