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Travel Insurance vs. Credit Card Travel Insurance: Which is Better?

Team AckoOct 29, 2025

Planning a foreign vacation, business trip, or study abroad trip is certainly thrilling, but risky too. Flight cancellations, delayed flights, lost luggage, sudden sickness, or accidents might turn your dream vacation into a nightmare. That is where travel insurance steps in.

Several top-tier credit cards have built-in travel insurance coverage when you use them to reserve flights or hotels. Does that mean you no longer need to purchase individual travel insurance? Keep reading to learn about both options and determine what is best for you.

Contents

What Is Comprehensive Travel Insurance?
What Is Credit Card Travel Insurance?
Travel Insurance vs. Credit Card Travel Insurance
When Credit Card Travel Insurance Might Be Enough?
When Standalone Travel Insurance Is the Better Choice?
How to Choose the Right Option?
Mixing Both for Ultimate Coverage
Final Thoughts
Frequently Asked Questions

What Is Comprehensive Travel Insurance?

A complete travel insurance policy covers you financially while travelling. It includes everything from hospitalisation and trip cancellations to loss of baggage and emergency evacuations.

The coverage starts the moment you depart from your homeland and remains valid while you return home unharmed. You may purchase travel insurance for various kinds of trips, be it a solo vacation, a family holiday, a student tour, or even multiple business tours within a year.

Standard protection is:

• Hospitalisation costs due to illness or accident

• Medical evacuation and repatriation

• Personal accident or disability cover

• Delay, cancellation, or interruption of trip

• Lost, delayed, or damaged luggage

• Hospital allowance per day

• Legal liability and home burglary coverage while travelling

With several modern insurers such as ACKO, you can even raise claims online or via an app within minutes, keeping help at your fingertips when you need it the most.

What Is Credit Card Travel Insurance?

Credit card travel insurance is a complimentary benefit offered by many banks when you use their cards for travel-related purchases such as flight tickets, hotels, or car rentals. The insurance is automatically activated once you make the booking with that card.

Depending on the credit card issuer, coverage may include:

• Trip cancellation or interruption

• Lost or delayed baggage

• Travel accident insurance

• Rental car insurance

• Lost documents or passports

• Limited medical emergency cover

Well, the extent of cover is vastly different. Minimum credit cards may provide very little cover, while premium cards such as HDFC Emerald or American Express Platinum Travel Credit Card provide better benefits, but usually at a high annual fee.

Travel Insurance vs. Credit Card Travel Insurance

Many travellers get confused between buying separate travel insurance and relying on the cover that comes with their credit card. Here’s a quick comparison to help you understand the difference.

Feature	Comprehensive Travel Insurance	Credit Card Travel Insurance
Cost	Purchased separately, affordable plans start at ₹500–₹2,000 for short trips	Comes bundled with premium credit cards (annual fees ₹2,500–₹50,000)
Medical Cover	Extensive coverage, includes hospitalisation and evacuation	Limited, may exclude serious medical emergencies
Trip Cancellation	Covers medical emergencies, natural disasters, or personal loss	Often limited to specific reasons
Adventure Sports	Can be added as an optional rider	Usually not covered
Claim Process	Direct and simple through insurer or app (like ACKO’s app)	May require coordination through the bank and can be slow
Visa Requirement	Accepted for visa applications (like Schengen, UK, or Canada)	Not accepted for visa processing

When Credit Card Travel Insurance Might Be Enough?

Credit card travel insurance can help in some cases, especially with premium cards, but it usually offers only basic protection.

It might be enough if:

Short Domestic Trips: Quick business or city trips within India.
Low-Risk Travel: No adventure activities or remote destinations.
Trips Paid with the Card: Insurance only applies if the booking is made using that card.
Existing Health Coverage: If your health insurance covers minor issues abroad.
Within Card Limits: If the coverage limits are enough for your trip.

A comprehensive plan from providers like ACKO is safer for international or high-cost trips. It offers wider coverage and faster online claims.

When Standalone Travel Insurance Is the Better Choice?

Standalone travel insurance policies have better coverage limits, fewer restrictions, and greater flexibility. You can personalise your plan according to your travelling style, be it covering pre-existing conditions, high-tech gadgets, or targeted destinations.

For instance, ACKO travel insurance covers:

•Hospitalisation because of illness or accident

•Emergency evacuation and repatriation

•Delayed or lost checked-in baggage

•Trip cancellation, delay, or missed flights

•Financial emergency support and passport loss

•Home burglary cover while you are away

You can raise claims via the ACKO app. You only need to upload your documents and get paid in INR within a few days. Their cashless treatment facility also lets you worry less about paperwork and more about recovery.

Read More: How to Claim Cashless Hospitalisation Abroad with Travel Insurance?

How to Choose the Right Option?

Following is an easy-to-follow guide that will assist you in making a decision:

1. Domestic Travel

If you are travelling within India and possess a premium credit card, then your inbuilt coverage may suffice, particularly for short business or city trips.

2. Overseas Travel

Always purchase a standalone travel insurance policy. Several embassies insist on it for visa approval, and it offers wider coverage in the event of medical emergencies, lost passports, and trip cancellations.

3. Family Holidays

Choose a family travel insurance policy that covers all family members under a single policy. ACKO and other insurers have flexible add-ons for various requirements of travelling.

4. Business Travellers

Frequent business travellers can opt for multi-trip travel insurance annually; it's usually more economical than depending on credit card cover per trip.

5. Adventure Breaks or Distant Places

Credit card insurance typically does not cover adventurous activities such as skiing, trekking, or scuba diving. A well-rounded travel insurance policy with an adventure sports add-on is essential.

Mixing Both for Ultimate Coverage

You can consider opting for both. Most travellers like to use both. They use credit card protection for the essentials and separate travel insurance for additional coverage. Well, the fact is that your credit card could pay for trip cancellation, but your travel policy pays for hospitalisation or emergency evacuation. This pair covers you from all sides, so you must count on both.

Final Thoughts

No doubt, credit card travel insurance can be a good bonus, but it shouldn’t be your only line of defence. A quality international travel insurance policy, such as ACKO's International Travel Insurance, provides that if your flight gets delayed, your luggage gets lost, or you fall sick during your trip abroad, you are completely covered without any hassle. It is a budget-friendly option, easily available online, and has fast claim settlement.

Frequently Asked Questions

Is credit card travel insurance sufficient for foreign travel?

No. Credit card insurance will usually have restricted coverage and is unlikely to be accepted by a visa application. A stand-alone travel insurance policy is highly advisable.

Can I have both a credit card travel insurance and a standalone travel insurance?

Yes. Most travellers use credit card insurance for minor problems and purchase stand-alone travel insurance for serious emergencies.

Is credit card travel insurance the same as standalone travel insurance?

No. While both provide travel protection, credit card travel insurance usually has limited coverage and applies only when the trip is paid for using that card. Standalone travel insurance offers comprehensive coverage that can be customised based on your destination, duration, and needs.

Can I claim standalone travel insurance online?

Yes. Insurers like ACKO allow digital claim submissions and reimbursements directly through their app, and no paperwork is needed.

How do I make a claim with credit card travel insurance?

Claims are usually handled through the bank’s partner insurer. You’ll need to provide proof of payment using the credit card and documentation of the loss or delay. The process can be more complex than that of standalone insurers.

Does credit card travel insurance cover adventure sports?

No. Most credit card travel insurance covers exclude high-risk activities like paragliding, scuba diving, or skiing. You’ll need to add an adventure sports rider to your travel insurance plan.

Should I rely solely on credit card travel insurance?

If you’re taking a short domestic trip or have a premium card with strong coverage, it may be sufficient. However, for international travel, long trips, or medical emergencies, standalone travel insurance offers far superior protection.

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.