I want to talk about something that has been on my mind a lot lately, especially as I watch friends and family members plan their big summer vacations. I take the position that most families traveling internationally, or even domestically for high-cost trips, are underinsuring themselves. The gap tends to come from underestimating medical risk rather than trip cancellation risk.

We all worry about the flight being delayed or the Airbnb not being what we expected, but we might be missing the big picture. Travel insurance spending has grown substantially in recent years. According to the National Association of Insurance Commissioners, citing U.S. Travel Insurance

According to association market data, Americans spent nearly 5.56 billion dollars on travel protection products between 2022 and 2024, which represents a forty-six percent increase from 2019. Trip cancellation, interruption, and delay coverage remains by far the most commonly purchased product, accounting for roughly ninety-five percent of travel protection purchases.

That popularity makes sense on an intuitive level. Losing a prepaid vacation to illness or a canceled flight feels like the most visible risk a family faces when booking travel. But here is where I think we as families are optimizing for the wrong worry. The real financial danger is not the lost hotel deposit. It is a six-figure ambulance ride. Standard domestic health insurance, including Medicare, generally does not cover care received outside the United States.

Even private plans with some international coverage often exclude medical evacuation, which is the cost of transporting a seriously ill or injured traveler to an adequate facility or back home. That gap is enormous financially. A medical evacuation from a remote location can run well into six figures. That cost dwarfs the price of a canceled vacation many times over.

For families, this is not just a theoretical risk; children are more prone to sudden illness, allergic reactions, and accidents that can escalate quickly in unfamiliar environments without a trusted local pediatrician, making comprehensive travel medical insurance a non-negotiable part of trip planning. I remember one time my own kid had a febrile seizure out of state, and we were panicked.

As I cannot imagine dealing with that in a country where I did not speak the language and had no coverage. My recommendation, and the position I want to argue directly, is that families should treat travel medical and medical evacuation coverage as the non-negotiable core of any travel insurance purchase.

Trip cancellation coverage is valuable, but it should be a secondary add-on. This runs against how most families actually shop for these policies. Trip cost protection is often the leading consideration because it maps directly onto the amount already spent on the trip. But financial exposure from an uncovered medical emergency abroad is categorically larger and more consequential.

At worst, a canceled vacation means losing money already spent. A medical emergency means facing a catastrophic, unplanned bill on top of the trauma of the emergency itself. Do you really want to be worrying about how to pay for a hospital while your child is sick? I certainly would not. Let us look at the types of risks we are talking about. If you are on a cruise and someone has a heart attack, they might need to be airlifted to a facility on land.

The cost of that helicopter ride is often not covered by standard health plans. The CDC notes that a medical air evacuation can cost anywhere from $25,000 to more than $250,000, depending on the location and severity of the condition. This kind of repatriation insurance can mean the difference between a family recovering together and a family facing bankruptcy. Families should also pay close attention to pre-existing condition exclusions.

These apply to nearly all standard policies and can catch families off guard. A chronic condition, even a well-managed one like asthma or diabetes, could trigger a claim denial if you have a flare-up while traveling. Purchasing a policy soon after booking a trip, rather than waiting until departure approaches, often preserves eligibility for waivers on these exclusions. That detail tends to get lost when families shop for travel insurance at the last minute because they are rushing to check a box instead of reading the fine print.

To be clear, I am not arguing families should skip trip cancellation coverage. For expensive, nonrefundable trips, it remains a reasonable purchase. But if a family has to choose where to spend a limited insurance budget, medical and evacuation coverage should come first, not last. Think of it this way: you are ensuring your health and your ability to get home safely, not just your plane ticket.

When you are comparing policies, look for the ones that offer a high limit for Emergency Medical Evacuation. Many experts recommend at least $100,000 to $250,000 in coverage to be safe. Also, check for coverage related to “pre-existing conditions” and ensure you understand the Cancel for Any Reason (CFAR) add-on if you are worried about flexibility.

Take a moment to reflect on why you are traveling. It is to make memories and have experiences, not to gamble with your financial future. I have found that just being aware of these gaps makes the whole planning process smoother. It is like having a good map before a road trip; it does not prevent the potholes, but it helps you avoid the major cliffs. So, before you click “buy” on that policy just because it is cheap, take a hard look at what you are protecting. For further reading on the specifics of trip cancellation, you can check out this guide here.

References

National Association of Insurance Commissioners, Travel Insurance topic overview: https://content.naic.org/insurance-topics/travel-insurance

National Association of Insurance Commissioners, consumer guidance: “Should I Get Travel Insurance?”: https://content.naic.org/article/should-you-get-travel-insurance-what-you-should-know-about-protecting-your-trips

Centers for Disease Control and Prevention, travel health and insurance guidance: https://wwwnc.cdc.gov/travel/page/insurance