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Travel Insurance: Buy the Hospital Cover, Not the Refund

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Nearly everyone we talk to says they have travel insurance. Most of them have something else.

What they usually have is cover against losing their deposit — and the deposit is the cheapest thing at risk on the whole trip.

The United States government is blunt about this in a way the industry never is. Its own guidance opens with one sentence: the U.S. government does not pay medical costs for citizens travelling abroad. Not a caveat, not a footnote — the opening line. And once you read the rest of that page you find that what we all call travel insurance is actually four separate products wearing one name, and that the two expensive ones are the two almost nobody checks they have bought.

Every number on this page comes from one of three places we fetched today. The U.S. State Department’s travel insurance guidance, last updated 11 August 2025, supplies the categories and the buying checklist. The CDC’s travellers’ health page on insurance supplies the evacuation figure and the medical thresholds. The Points Guy’s travel insurance explainer, last updated 25 June 2026, supplies the pricing and the credit-card mechanics.

That last one needs a declaration. The Points Guy is an affiliate publisher paid when readers are approved for the cards it writes about, so we have taken its mechanics — prices, percentages, waiting periods, what a benefit does and does not do — and left its product recommendations entirely alone. We name no insurer and no card anywhere on this page, and we are not going to, because the moment we do we are selling rather than explaining.

We should declare our own position too. We are travel advisors, not brokers, not underwriters and not doctors. Nothing here is medical advice or a coverage opinion on your particular policy, and we cannot read your certificate of insurance for you — only your insurer can tell you what yours covers. What we can do is tell you which questions we ask before a client pays a deposit, and where the ordering of those questions is our judgment rather than anybody’s published rule. Where it is judgment, we say so on the line.

“The U.S. government does not pay medical costs for U.S. citizens traveling abroad.”
— U.S. Department of State, Travel Insurance guidance

How to read a travel insurance policy before you buy it

The State Department does something unusual on that page: instead of recommending anything, it publishes a checklist of things a policy has to cover. Validity in the countries you are actually visiting. The length of your actual trip. Emergency medical care. Medical transport back to the United States. Travel and lodging. Cash for emergencies. Every current medical condition in the party. And the activities you are actually planning to do.

Eight items, none of them about price. That list is the skeleton of everything below, reordered into the sequence we use when a client sends us a policy. The ordering is ours and it is judgment; the items are theirs.

1. Travel insurance is four products sharing one name

Both government pages break the category the same way. The State Department lists travel health insurance, medical evacuation insurance, trip cancellation insurance and auto insurance abroad. The CDC lists three: trip cancellation or disruption, travel health, and medical evacuation. The overlap is the part that matters, and so is the warning attached to it — the State Department says in plain words that trip cancellation insurance “usually does not pay for medical costs in other countries.”

So the travel insurance most people bought at checkout, in the box that appeared next to the flight price, is the one product on the list that will not help if they end up in a hospital. It is not a bad product. It is just not the one doing the heavy lifting, and the name it shares with the others hides that.

Best for: Anyone who has never actually read which kind of travel insurance they hold.
Do this when: Before you compare travel insurance prices at all — work out which of the four you need, then price those.

2. Your own health cover probably stops at the border

This is the assumption that costs people money. The State Department states that U.S. Medicare and Medicaid do not pay for medical care outside the United States, full stop, and tells travellers to ring their own insurer and ask directly about emergency and routine care abroad. The CDC adds the other half: if you need care in another country you will likely pay out of pocket, and even where a country runs nationalised health care, that system may not cover people who are not its citizens.

Two sources, two different governments’ worth of caution, and the same answer. Ask your own insurer the question before you price a single travel insurance policy, because the answer decides whether you are buying a supplement or buying the whole thing.

Best for: Anyone assuming their domestic health plan travels with them.
Do this when: Ring your insurer and ask specifically about out-of-network emergency care at your destination, not about travel generally.

3. The evacuation number is the one that changes the arithmetic

Here is where the two kinds of source pull apart in a useful way. The CDC says medical evacuation insurance covers emergency transport from a remote area to a high-quality hospital, “which could otherwise cost more than $100,000.” The Points Guy, writing for a commercial audience, says helicopter evacuations can exceed $30,000 out of pocket.

Both are right, and the gap between them is the thing worth understanding. Thirty thousand dollars is the lift — getting you off the mountain or off the reef and into the nearest facility that can treat you. The CDC’s six figures is the whole journey, which on a bad day means a stretcher, a medical escort and an air ambulance across an ocean. People price the first and discover the second.

Now put that against what the cover costs. The Points Guy reports, citing Squaremouth data, that the average standalone policy runs about 6% of insured trip costs, or roughly $307 for a fifteen-day trip. Divide the CDC’s hundred-thousand-dollar ceiling by that $307 and you get a ratio of about three hundred and twenty-five to one. By our arithmetic on those two published figures, the average policy costs around a three-hundredth of the worst bill it exists to absorb.

We are not going to pretend that ratio settles the question by itself — a hundred thousand dollars is a ceiling, not an expectation, and most trips end with the policy unused and the premium gone. But it is the right frame. You are not buying back the cost of a cancelled hotel. You are buying out of a number that has no relationship whatsoever to what your holiday cost, and that is why the remote, high-altitude and long-haul trips are the ones where this stops being optional in our view.

Best for: Remote destinations, high altitude, small islands and expedition sailings — the trips where travel insurance stops being a formality.
Do this when: The itinerary includes a day when the nearest hospital that could treat you properly is more than a road journey away.

4. What the card in your wallet actually carries

Plenty of premium travel cards include real protections when the trip is paid on the card: trip delay, cancellation, interruption, lost baggage. The Points Guy is clear that for a lot of travellers on domestic or lower-risk trips that is genuinely enough, and we agree.

The gaps are specific, though, and all three of them bite in the same place. Card protections generally do not include extensive emergency medical cover or medical evacuation. No card offers cancel-for-any-reason. And the cover only applies to what was charged to that particular card — so if you split a trip across two cards, or paid part of it in points, the protection may not stretch across the whole trip value.

Best for: Domestic trips and refundable bookings, where card cover often does the job of standalone travel insurance.
Do this when: You can say out loud which card paid for which component — if you cannot, assume the cover does not reach.

5. Buy travel insurance on the day of the first deposit

This is the cheapest mistake to avoid and the easiest to make. The Points Guy’s guidance is to buy as soon as you make the first trip deposit, because waiting even a few weeks can disqualify you from the time-sensitive benefits. The two that matter are the pre-existing condition waiver, which many providers offer only if you buy within fourteen to twenty-one days of that initial deposit, and cancel-for-any-reason, which has its own tight window.

Note what that means in practice. The clock does not start when you finish planning. It starts the day you pay anybody anything — a flight, a deposit on a lodge, a cruise hold. We have watched clients lose a waiver by three days because they were still deciding on the itinerary.

Best for: Anyone with a medical history, and anyone booking far ahead.
Do this when: Buy the travel insurance the day the first payment leaves your account, not the day the itinerary is finished.

6. Check the exclusions against what you actually plan to do

The State Department’s checklist ends on “activities you plan to participate in,” and both the other sources explain why that line is there. The CDC singles out scuba diving and hang gliding as the sort of activity that makes travel health cover more important. The Points Guy says adventure sports such as skydiving and free soloing are typically excluded altogether unless you buy a specialty plan.

Pre-existing conditions sit in the same bucket: excluded by default on most policies, waivable only inside that early window. And the CDC adds a threshold nobody expects — trips longer than six months are a reason to take travel health cover more seriously, not less.

Best for: Dive trips, climbing and trekking holidays, long sabbaticals, and any party with a medical history.
Do this when: Write down every activity on the itinerary first, then read the travel insurance exclusions against that list rather than against the brochure.

7. Two operational tests a good travel insurance policy passes

Everything above is about the scope of the travel insurance. These last two are about what happens at three in the morning in a country where you do not speak the language, and both come straight from the government pages.

First: does the policy pay the hospital directly? The State Department notes that some policies make direct payments to hospitals, and the CDC tells travellers to look for exactly that. The alternative is that you front the money and claim it back, which is survivable for a clinic visit and not survivable for an admission.

Second: is there a twenty-four-hour line, staffed by someone who can make decisions? The State Department says find out whether there is a twenty-four-hour help line. The CDC goes further on evacuation cover and says make sure the policy provides a twenty-four-hour physician support centre — a doctor, not a call handler.

Best for: Every international trip, without exception.
Do this when: Ask both questions of the insurer in writing before you pay — the second answer tells you far more about the company than the first.

Four products, not seven sections — this table answers a different question from the numbered list above it. Every entry in the first three columns is drawn from the State Department, CDC or Points Guy pages cited at the foot of this article; the grouping of them into one table is ours.

Practical notes on buying travel insurance

What it costs, and what moves the price

The Points Guy puts standalone policies at 4% to 10% of total non-refundable trip costs, with the current average around 6%. Age and destination move it hard: it reports a thirty-year-old insuring a $5,000 trip paying around $200, and a sixty-five-year-old insuring the same trip paying closer to $400. On those two published figures that is 4% against 8% — the same trip, the same cover, and the age difference alone takes you from the floor of the band to its upper half.

Cancel-for-any-reason, and whether we think it is worth it

CFAR reimburses 50% to 75% of non-refundable costs, with some providers going to 80%, and it adds roughly 40% to 50% to the base premium — about 9% to 14% of total trip cost once combined. Our judgment, not a sourced rule: on a mostly non-refundable, hard-to-rebook trip it can be worth it, and on a flexible booking it rarely is. No credit card offers it at all.

The question we ask every client before they pay

Which of the four kinds of travel insurance do you hold, and who did you ask? Not “are you insured.” The first question has an answer you can check; the second has an answer everybody gives.

Have us read the policy before you pay the deposit →

Frequently Asked Questions

Is travel insurance worth it?

It depends which of the four products you mean. For an international trip with large non-refundable costs, limited health cover abroad or a remote destination, the medical and evacuation halves are worth it in our view — the CDC puts an uninsured evacuation above $100,000. For a flexible domestic booking, card protections are often enough.

Does my credit card already include travel insurance?

Many premium travel cards include trip delay, cancellation, interruption and baggage cover on what that card paid for. The Points Guy is explicit that they generally do not include extensive emergency medical cover or medical evacuation, and that no card offers cancel-for-any-reason. Read your benefits guide rather than assuming.

What does travel insurance not cover?

Pre-existing medical conditions are excluded by default on most policies, waivable only if you buy within roughly fourteen to twenty-one days of your first deposit. Adventure sports such as skydiving and free soloing are typically excluded unless you buy a specialty plan. And trip cancellation cover usually will not pay a hospital abroad.

When should I buy travel insurance?

On the day of your first trip deposit. The Points Guy says waiting even a few weeks can disqualify you from time-sensitive benefits, and the two that matter most — the pre-existing condition waiver and cancel-for-any-reason — both run on a clock that starts at the first payment, not at the final booking.

Which travel insurance policy should I buy?

We will not name one, and we would be careful with anyone who does without seeing your itinerary. We are travel advisors, not brokers, and we hold no commercial relationship with any insurer. What we will do is take the State Department’s eight-item checklist and read a policy you are considering against your actual trip.

The Dorian Destinations Verdict

Buy the medical and evacuation cover first, and buy it on the day you pay your first deposit. If your travel insurance budget then forces a choice, we would drop cancel-for-any-reason before we dropped a dollar of the hospital and evacuation side.

That advice costs us something, and it is worth saying so plainly. We build trips with substantial non-refundable deposits, and cancellation cover protects our bookings as much as it protects your money — a client with good cancellation cover is an easier client for us when a plan changes. It is the half of travel insurance we have the most obvious interest in recommending, and you should weigh our enthusiasm accordingly. It is also the half that cannot help you on the worst day of the trip.

The honest summary is that the cheap-feeling thing — a couple of hundred dollars of medical and evacuation cover on a $5,000 trip — is the part insuring against a number with no ceiling, and the expensive-feeling thing is insuring a deposit you can already see. If you only read one line of your policy this year, make it the one about who pays the hospital.

Talk to a Dorian Destinations advisor →

Sources: U.S. Department of State — Travel Insurance (updated 11 August 2025); CDC Travelers’ Health — Travel Insurance; The Points Guy — What is travel insurance? (updated 25 June 2026). The Points Guy is an affiliate publisher paid when readers are approved for cards through its site; we have used its mechanics and pricing and none of its product recommendations. Dorian Destinations holds no commercial relationship with any insurer. Nothing here is medical advice or a coverage opinion. Imagery via Unsplash.

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