As the cost of travel insurance increases, travellers are rightfully seeking out every opportunity to save on premiums without compromising on coverage benefits.
Depending on your age, one simple – and often overlooked – opportunity to save on travel insurance can be to purchase your policy before your next birthday.
Here’s why:
Travel insurance premiums usually increase at milestone ages such as 60, 65, 70, 75, 80, etc... and these increases can be quite significant, often ranging from 20% to 40% or more.
When calculating your premium, most insurers use your age at the time of purchase, not your departure date from your province or territory of residence.
Accordingly, by purchasing your travel insurance policy before a milestone birthday, you can avoid those higher premiums and secure the same protection at a lower cost.
Take the following example:
Sally is currently 64 years old and is planning to depart on a trip on December 1st, but she will be turning 65 on November 1st, about one month before her departure date.
If Sally were to wait until November 1st to purchase her travel insurance policy, she would be subject to the higher premiums associated with a 65-year-old traveller. However, if Sally purchased her policy prior to November 1st, she would benefit by paying the lower premiums associated with a 64-year-old traveller.
Here are some considerations when seeking to take advantage of this cost savings strategy:
- When is your birthday relative to your travel departure date?
If your birthday is within a few weeks – or even a few months - before your departure date, this strategy could work well for you. However, if your birthday is several months before your departure date, it may not be as viable unless you know your travel dates. - Is it a “milestone” birthday?
Does your insurer consider your upcoming birthday to be a “milestone” birthday that would result in a premium increase based on your age? If so, this strategy could be helpful. If not, it won’t make a difference. - What date does your insurance provider use to calculate premiums?
Does your insurance provider calculate your premiums based on your age at the time of purchase or at the time of departure? If they use your purchase date, then this strategy could work well for you. However, if they use your departure date, it likely won't lower your premium.
Disclaimer: The material provided in the Snowbird Advisor Insurance Learning Centre is for informational purposes only and does NOT constitute insurance, legal, financial or other advice, and should not be relied on as such. If you require such advice, you should speak with a qualified professional to assist you.
