Understand the three key differences between family travel insurance and group travel insurance to help you make the most appropriate choice.
When travelling in a group, getting a family or group insurance policy can be a good way to garner savings while gaining important coverage during your trip.
On the surface, both family and group travel insurance plans seem similar – each is an insurance policy that covers you and your travelling companions.
However, closer inspection will reveal crucial differences between family travel insurance and group travel insurance, which means the choice may not always be a straightforward one.
Here’s what you should consider during your trip planning when deciding whether to go with a family or a group plan.
3 key differences between family travel insurance and group travel insurance
|Family travel insurance||Group travel insurance|
|Covers only immediate family members (i.e., legal spouse and children)||Covers all named individuals|
|Separate limits for children and adults||All insured individuals enjoy same level of benefits|
|May offer free child cover||Charged on per-individual basis, but group discount may be offered|
#1. Persons covered
The most important difference between family travel insurance and group travel insurance is the persons covered.
As per its name, a family travel insurance plan only covers, well, family members. In most cases, only immediate family – legal spouse, and own children – are included. Some insurers, however, may only require the children to be insured to be related to one adult only.
This also means that extended family members are excluded from family travel insurance plans. So, if you’re travelling with your grandparents, uncles and aunties, cousins, etc, they will require their own travel insurance policy.
What about domestic helpers? Well, some insurers may offer free coverage for domestic helpers accompanying the family during the trip. If your chosen insurer does not offer this, a separate plan will need to be acquired for your helper.
In contrast, a group insurance policy doesn’t require any of the insured individuals to be related in any way whatsoever. They only need to be named, and fulfil the eligibility criteria – commonly, age and nationality.
#2. Claims limits
It is common for family travel insurance plans to have different claims limits for adults and children, with the latter covered only for a portion of the sums assured provided to insured adults.
Not only that, family travel insurance usually institutes an overall cap per family, which adds up to a lower sum than the individual benefits combined.
For instance, a policy may offer personal accident coverage of S$10,000 per adult, and S$5,000 per child, with an overall cap of S$25,000 per family. This means that the policy essentially only offers full cover to two adults and one child, putting larger families at a disadvantage.
Of course, travel insurance benefits aren’t meant to be split up like a chicken dinner. However, per-family limits can make it such that the benefits you do receive are insufficient for your needs.
In contrast, group insurance plans do not have this limitation. All insured persons will have their own individual benefits and limits.
This may be a more attractive option for some, so you should forego family plans and just sign everyone up for a group plan instead, right?
Afterall, some group plans require a minimum age of 16, while family plans cover children up to age 18 or 23, for full-time students. This means you should be able to enrol your 17-year-old under a group policy – and thus gain full cover – correct?
Well, maybe. It is up to your insurer to decide if they will insure you and your immediate family under a group travel plan, instead of a family plan.
Also, if your children do not meet the minimum qualifying age for a group plan, then you’ll have no choice but to go with a family plan instead.
#3. Premiums charged
A prominent selling point of a family plan is that children are included for a lower cost, or sometimes completely for free. The idea is to let parents feel like they are getting good value for money.
Group travel plans, in comparison, are charged on a per-individual basis, with the premium carefully calculated to cover the cost of insurance across all individuals in the policy. Another common practice is to offer a discount on single-traveller plans if multiple travellers sign up together.
While both of these marketing tactics may seem different, they don’t actually matter very much in the grand scheme of things.
What’s more important is getting sufficient coverage for every traveller, and benefits that are actually useful and necessary, at a reasonable premium.
Conclusion: Should you choose family travel insurance or group family insurance?
At the end of the day, choosing between a family travel plan or a group travel plan really boils down to who you’re travelling with.
For parents travelling with their children, they may invariably only be able to choose family plans, due to age constraints or the requirements of the insurer.
For those travelling with extended family members, there may be a choice between multiple family plans (one for each nuclear family), or an overall group policy that includes everyone.
Friends, co-workers and acquaintances will most likely only qualify for group travel policies. But that’s not a disadvantage at all. Sure, premiums may be slightly higher, but each individual will have full coverage.
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By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.