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Factors That Affect Your Travel Insurance Premium

Team AckoOct 31, 2025

When planning a trip, you probably start by setting a budget for flights, hotels, food, and experiences. But one thing that often slips down the checklist is travel insurance. You might notice that the premium can vary quite a bit, even for similar trips.

Why does that happen? Travel insurance premiums are not fixed. They depend on a mix of personal and trip-related factors such as where you are going, how long you are staying, your age, health, and even the kind of policy you pick. Understanding what affects your premium helps you make an informed decision and, in many cases, even save money without compromising on coverage.

Let’s take a closer look at these factors in this blog.
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Contents

Why Travel Insurance Premiums Differ?
Key Factors That Impact Travel Insurance Costs
How to Save on Your Travel Insurance Premium?
Final Thoughts
Frequently Asked Questions (FAQs)

Why Travel Insurance Premiums Differ?

Travel insurance premiums are not one-size-fits-all. The amount you pay depends on your trip details, personal profile, and the coverage you choose.

Think of it this way: the higher the risk, the higher the cost of your travel insurance. A weekend trip to Goa won’t cost the same as a three-week Europe tour, just like covering a 25-year-old solo traveller differs from insuring a family of four.

Knowing why premiums vary and understanding what you’re paying for will help you in choosing the right travel insurance.

Key Factors That Impact Travel Insurance Costs

Every detail, from where you’re going to how long you’ll be away, plays a part in determining the final cost of your travel insurance. Let’s take a closer look at these factors below:

1. Destination of Travel

Your destination is one of the biggest factors that determine your premium. Travelling to countries with higher healthcare costs or safety risks often means a higher premium. For instance, a trip to Europe or the US will cost more to insure than one within Asia. Some destinations, such as Schengen countries, even require mandatory travel insurance with set coverage limits.

Tip: Always check destination-specific insurance requirements and risk levels before buying a policy. It ensures you have the right coverage and prevents last-minute issues during visa processing.

2. Duration of the Trip

The longer you are travelling, the higher your premium will be. A two-week vacation is usually cheaper to insure than a three-month work assignment abroad. That is because the longer you stay away, the greater your exposure to risks such as illness, accidents, or travel disruptions.

Your premium is calculated based on the number of travel days, so always match your coverage period to your actual trip dates. Even a few extra days of protection are better than leaving a gap that could lead to uncovered expenses.

3. Number and Age of Travellers

If you are travelling solo, your insurance cost is generally lower. But when you include family members or travel companions, the overall premium increases. The insurer takes into account the combined age, number of people, and their health conditions.

Age plays a particularly important role. Older travellers are more likely to require medical attention, so premiums tend to be higher for them. Family travel plans that include senior citizens often cost more, though they also offer specialised coverage like emergency medical evacuation or age-specific health benefits.

Example: A 28-year-old traveller heading to Thailand may pay far less than a 65-year-old traveller going to the same destination for the same duration.

4. Type of Travel Insurance Plan

Not every trip is the same, and neither are travel insurance policies. The kind of plan you choose directly affects your premium.

Single-trip plans cover one journey and are ideal for occasional travellers.
Multi-trip annual plans cover multiple trips within a year, making them more cost-effective for frequent flyers.
Student, business, and senior citizen plans are designed for specific travel needs with different coverage options and pricing.

5. Add-on Covers

Add-ons or riders are optional features that extend your base coverage. Each add-on comes with a small additional cost, but it can make a significant difference if something unexpected happens. Common examples include:

Adventure sports cover
Trip cancellation for any reason
COVID-19 coverage
Protection for loss of personal belongings or gadgets

6. Pre-Existing Medical Conditions

Your medical history and current health conditions also play an important role in determining your premium. Most standard travel insurance policies do not cover pre-existing illnesses unless you declare them in advance. Even when declared, coverage may come at a slightly higher cost.

This is because insurers assess the risk of medical emergencies linked to known health conditions. For instance, if you have diabetes or a heart condition, you might have to pay a higher premium, but it ensures that you are covered if you need medical assistance during your trip.

Tip: Always disclose your health conditions honestly. Concealing them may lead to claim rejection later.

7. Coverage Amount (Sum Insured)

The sum insured is the total amount your insurer will pay for covered losses. Naturally, a higher sum insured means a higher premium, but it also provides stronger protection.

For example, ₹10 lakh may be enough for short trips to nearby countries, but due to high medical and emergency costs, you may need ₹50 lakh or more when travelling to the United States or Europe.

Choose your sum insured based on your destination’s healthcare expenses, travel duration, and personal comfort level with financial risk.

8. Policy Customisation and Claim History

Some travellers prefer to customise their travel insurance with specific inclusions such as coverage for expensive equipment, pets, or special medical needs. Each of these customisations adds a small cost to the overall premium.

Your past claim history may also influence the price. Frequent claims in previous travel policies can sometimes lead to slightly higher rates, as insurers consider such profiles more likely to make claims in the future.

That said, many insurers now use transparent digital processes to calculate premiums, so your claim record is only one of many factors.

9. Exchange Rates and Travel Season

Insurance premiums for international trips are often influenced by currency exchange rates. When the rupee weakens against major currencies, the cost of overseas medical care effectively rises, which can increase your premium.

Similarly, buying travel insurance during peak travel seasons, such as summer vacations or festive holidays, may cost a bit more due to higher overall demand. Purchasing your policy early can help you lock in a better rate.

How to Save on Your Travel Insurance Premium?

While travel insurance is essential, you don’t have to overspend to stay protected. A few smart choices can help you lower your premium while keeping all the important benefits intact.

Buy early to lock in lower rates.
Compare quotes from multiple insurers.
Choose only the add-ons you truly need.
Look for online purchase discounts.
Adjust deductibles to balance cost and coverage.

Final Thoughts

Your travel insurance premium is shaped by a range of factors, from your destination and trip duration to your health, age, and the coverage you choose. Understanding these elements allows you to plan better and avoid paying for unnecessary add-ons.

Start by identifying what matters most for your trip. If you are heading abroad for the first time, focus on essential medical and cancellation cover. If you travel often, an annual plan might save you more in the long run.

With ACKO Travel Insurance, you can compare plans, customise coverage, and get instant quotes online. It is fast, transparent, and designed to fit every kind of traveller, so you can focus on exploring the world while staying financially protected.

Frequently Asked Questions (FAQs)

Why do travel insurance premiums vary by destination?

Premiums are higher for countries with expensive healthcare or greater travel risks. For example, coverage for the U.S. or Europe costs more than for destinations in Asia.

Does age really affect travel insurance costs?

Yes. Older travellers are more likely to require medical attention, which makes their premiums higher compared to younger travellers.

Can I reduce my travel insurance premium?

You can save by buying early, comparing different plans, and choosing only the add-ons that match your trip. Selecting a suitable coverage amount also helps control costs.

Do pre-existing medical conditions increase premiums?

Yes. Declaring pre-existing conditions can raise your premium slightly, but it ensures you are covered if related issues arise during your journey.

What type of travel insurance plan is most cost-effective?

If you travel frequently, an annual multi-trip plan is usually more economical than buying separate policies for each trip.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes. Please check the policy document for cancellation reasons, and terms and conditions of the policy.