Annual vs single trip insurance

bobblebob

I have 4 trips booked for next year, 3 in Europe and one of them includes Vietnam. I went to get a quote from my usual insurance company as i get a discount for using them alot. With my declared medication conditions these were the quotes:

Annual insurance (worldwide ex USA) costs me £98
Single trip (worldwide ex USA) just to cover the Vietnam trip is £111

Both same policy and cover level/benefits. I dont understand how annual insurance that also covers Vietnam can be cheaper than single trip insurance?

JosephK

Found similar, single trip very little less expensive or even dearer than annual. Doesn't seem to make sense but somehow in the insurance world it does

MyRealNameToo

bobblebob said:

I have 4 trips booked for next year, 3 in Europe and one of them includes Vietnam. I went to get a quote from my usual insurance company as i get a discount for using them alot. With my declared medication conditions these were the quotes:

Annual insurance (worldwide ex USA) costs me £98
Single trip (worldwide ex USA) just to cover the Vietnam trip is £111

Both same policy and cover level/benefits. I dont understand how annual insurance that also covers Vietnam can be cheaper than single trip insurance?

Annual insurance will automatically renew each year, most stay with the same provider "just in case" and so the marketing costs can be spread over the average length someone holds a policy for. In practice most arent going to Vietnam each year and some dont go anywhere at all so this is all cross funding those that are actually going abroad a lot and to exotic places. 

Very few people buy single trip policies who then neither travel nor claim. Single trip cover is a one off purchase so the full cost of marketing has to be applied to this one purchase as the next time you go to buy a policy they will incur marketing costs again so effectively the premiums have to cover more than an annual policy.