How Good Are Credit Card-Linked Travel Insurance Plans?

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How Good Are Credit Card-Linked Travel Insurance Plans?

Travelling to another country is no longer a laborious task. You don’t need the assistance of a travel agent to get the cheapest airfare or a decent hotel. Technological advances have made it easier for the average Malaysian to pack their bags and visit new places.

In fact, 2017 saw around 11.9 million international trips that were made by Malaysians. And according to this Mastercard report, these numbers are about to get higher in 2022 and reach an estimated 14.2 million trips!

It’s evident that Malaysians have caught the ‘travel bug’ and are literally going places!

And one thing that’s extremely important when you’re on the move is travel insurance — whether you’re witnessing the Northern Lights in Iceland or swimming in the deep blue waters of Langkawi.

If you have a good credit card, chances are you have complimentary travel insurance coverage. Some cards in Malaysia offer a coverage of up to RM2 million. Definitely an attractive benefit!

But how good are these credit card-linked travel insurance plans? In what terms are they better than a standalone policy? And where all do they lack?

Below are some surprising exclusions you should be aware of if you’re planning to bank only on your credit card’s travel insurance coverage.

You get limited medical coverage

How Good Are Credit Card-Linked Travel Insurance Plans?

It’s important to have an insurance plan that covers medical emergencies, especially when you’re travelling overseas. A standalone insurance policy will reimburse you for all the medical costs you’ve incurred. Let’s assume you meet with an accident and require immediate medical care during your trip. This policy will take care of all your expenses.

However, the complimentary insurance coverage on your credit card will not have these benefits.

Although, there are some cards in Malaysia that do offer coverage for travel-related medical expenses. For instance, the Alliance Bank Visa Infinite Card (full review here) offers travel medical expenses coverage of up to RM50,000 for people below 70 years of age.

While this a great benefit, there are some terms and conditions attached to it — it doesn’t apply to pre-existing medical conditions, cosmetic surgery, and unavailable in certain countries as well.

You will be well-advised to always discuss the nitty gritty with your card’s issuer or read the fine print for clarity on how the travel insurance policy really works.

Must read: Standalone Travel Insurance Policy or Credit Card Travel Cover – Which One Should You Go For?

You get limited trip cancellation coverage

How Good Are Credit Card-Linked Travel Insurance Plans?

Sometimes, because of unforeseen circumstances, you’re forced to cancel your flight. The reasons for cancellation can vary—illness, injury, work-related emergencies, theft of a passport, and more. Now, a standalone travel insurance policy will cover most of the above-mentioned events.

But the terms and conditions change with your credit card’s travel insurance policy. For example, the Citi PremierMiles Visa Card (full review here) offers cancellation coverage up to RM16,000 per trip or RM32,000 in total per policy period. But you’ll only receive the insured sum from the bank if the insuree meets with an accident, gets ill, or upon his/her demise.

You may also have to provide additional documents to support your claims.

Related: Why You Need Travel Insurance, and How It Shields Your Trip

You get limited travel delay coverage

How Good Are Credit Card-Linked Travel Insurance Plans?

Sometimes, you will experience hitches while travelling. This could be in the form of missed flight connections, baggage delays, luggage loss, or delayed flights. Being stranded in an airport because of this can reduce anyone to bouts of frustration.

Here’s when a travel insurance policy comes in handy. Now a standalone policy covers an array of travel inconveniences—carrier problems, severe weather conditions, natural disasters, stolen passports, and many more. This also includes you missing your flight connection or the airline misplaces your luggage.

However, the coverage you receive with a credit card is limited to you losing your luggage or receiving it late, and missed flight connections. In some cases, your card’s issuer will also cover hijacking, disablement caused by the aircraft, and more.

For instance, the Maybank Visa Platinum Credit Card offers RM1,000 if your luggage isn’t delivered to you within 12 hours. And losing luggage gets you around RM3,000. Again, these benefits come with riders and it’s crucial you take them all into consideration.

Related: Cashback or Travel Credit Card: Which One Should You Pick?

Other things you should keep in mind

How Good Are Credit Card-Linked Travel Insurance Plans?

Besides the limitations of your card’s travel insurance policy, there are other factors you should be aware of:

  • To enjoy complimentary insurance when you travel, you need to charge the full fare of your flight tickets to your credit card
  • The insurance provided is mostly limited to international travel and not applicable for domestic travel
  • You cannot customise your policy to cater to your needs, which is something you will get with standalone travel insurance
  • It’s more reasonable to get a standalone policy because making a claim through a credit card results in high excess charges
  • A credit card travel insurance policy generally covers only the cardholder and hot his/her family members
  • Climbing interest rates may be an issue if you can’t clear your ticket fares on your credit card on time

Related: Plan to Travel! How to Make the Most of the Public Holidays in 2019

Final thoughts: The complimentary travel insurance coverage of your credit card is a great backup plan, but is it enough?

How Good Are Credit Card-Linked Travel Insurance Plans?

Getting complimentary travel insurance with your credit card is definitely a good benefit to have, if not the best one. Because what you get is a ‘one-size fits all’ plan which doesn’t allow you to customise the plan and there are several things that aren’t covered.

Also, many countries in the world have made it mandatory for its visitors to carry travel health insurance and credit card-linked insurance plans may not be enough to make the cut.

But despite the restrictions, it’s a great backup plan! Especially if you haven’t had the time to purchase a policy before your vacation or business trip. It’s free of charge and covers the most common issues faced by travellers!

What’s important is that you read the fine print before choosing your credit card’s travel insurance plan as the policy of your choice. It’s important you understand all the inclusions, exclusions, and the restrictions. You can also compare it to other standalone policies to see whether they’re enough for your requirements or not.

Either way, you need to ensure you’re covered before you fly off to your next adventure!

And if you’re looking for a travel credit for travel benefits like air miles (which can be redeemed for discounted or free flight tickets, deals on hotels, etc.), complimentary travel insurance coverage, free lounge accesses, free concierge services, etc. check out our blog 6 Top Travel Credit Cards in Malaysia That Help You Save More.

And that’s not all! Apply now for a Citi, Alliance Bank, or a Standard Chartered Bank credit card, right here on BBazaar Malaysia, and get a Huawei Y6 2018 phone, absolutely FREE! T&Cs apply.

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