What’s the difference between travel insurance and medical insurance? Do I need both?

Canadians love to travel, with passenger traffic more than doubling from January 2022 to January 2023 at eight of Canada’s largest airports according to data from the Canadian Air Transport Security Authority.

With the fun of choosing a destination and finding the best deals, and the not-so-fun part of massive airport line-ups and lost luggage, comes the more practical questions. Do you need travel insurance or medical insurance?

Which one is better? Do they cover the same thing? Let’s look at the differences and similarities between the two and when you may need them.

What is travel insurance?

Travel insurance is the coverage most of us think of when we go on a short trip out of the country, generally less than six months. This type of insurance policy can cover trip disruptions and medical emergencies.

Depending on the type of travel insurance you buy, or the coverage you may have with a travel credit card, you can be covered for:

• Flight delays. Your insurance covers the cost of food and accommodation between the cancellation and the next available flight.
• Trip disruptions such as cancelled or cut-short trips. You may be entitled to a full or partial reimbursement of flight or hotel costs.
• Theft or misplacement of your luggage and other personal belongings.
• Personal liability. Like home insurance, travel insurance can cover you if your actions accidentally cause damage to another person’s belongings or property.
• Unexpected medical emergencies including hospital and dental bills.
• Medical evacuations back to your home or to another hospital. Some travel insurance policies will cover the cost to repatriate your body if you pass away while travelling.

What is medical insurance?

This type of insurance focuses on health coverage. It’s aimed at people who are planning to live or work abroad for an extended period of time. They may not get health coverage in their new country and will not be able to access their home country’s health plan, so they need some kind of insurance that replicates the coverage they would get at home.

Medical insurance for those living outside of their home country, also known as international medical insurance, can cover the following, depending on your policy:

• Routine doctor’s visits
• Prescriptions
• Dental
• Vision
• Emergency services like ambulance rides
• Hospitalizations, surgeries, tests, etc.
• Physiotherapy
• Rehabilitation
• Pre-existing health conditions
• Evacuation or repatriation back to your home country
• Treatments such as radiation and chemotherapy
• Mental health care

Since this insurance policy is health-focused, you may have to submit your medical history or be examined by a doctor as part of the application process. And if you’re living in another country longer than expected, you can pay to extend this coverage for the remainder of your stay.

Unlike travel insurance, medical insurance doesn’t cover the standard travel issues such as trip disruptions, flight delays, and theft.

Which policy do you need?

Both policies can include emergency medical coverage, and evacuation and repatriation coverage, but each focus on different travel aspects.

You should get travel insurance if you’re travelling temporarily.

You should get medical insurance if you’re moving abroad for school, retirement, work, or if you’re travelling back and forth and won’t have health insurance.

You can also have both policies at the same time. For example, you can purchase travel insurance for the period of time you’re travelling to your new location to protect against theft or travel disruptions.

At the same time, you can purchase international health insurance so you’re immediately covered for any medical needs when you move to a new country.

How much does insurance cost?

The cost of travel and medical insurance depends on several factors such as your age, health, the number of family members who also need coverage, any pre-existing health conditions you may have, and the destination. If you’re moving to the U.S., you might need a robust insurance plan, since health costs are expensive compared to other countries that have universal healthcare.

Shopping around for travel insurance and medical insurance is the best way to find the right coverage at the most affordable rate. But be sure to read the policy before purchasing. Even if you’re healthy and think the chances of losing your luggage are slim, accidents can happen. Securing the appropriate insurance can ensure you won’t have to pay out of pocket for expenses you can’t afford.