While on vacation, the main goal is to relax and recharge with positive emotions to more easily cope with your work and daily tasks when you get back home.
Of course, each trip involves some kind of preparation, which varies in duration and complexity, depending on the destination you choose, as well as whether you organize your reservations yourself or a specialized company is taking care of it.
There is no one-size-fits-all solution for organizing your desired trip. You need to decide whether to do all the work yourself or hire a travel agent.
Whichever option you choose, there are risks of losing money when traveling on vacation, and some of them can have an extremely negative financial and emotional impact.
You want to relax and not worry about negative possibilities while on vacation. That’s why we recommend you prepare in advance to avoid some of the possible risks.
Let’s take a look at the 3 main financial risks that you need to consider before you leave.
1. Medical emergency
Unexpected health situations happen.
As much as we don’t want to talk about it, apart from the passing COVID-19 pandemic, there are other health conditions you might experience during your travels.
The good news is that if you organize your trip through a travel agency, they usually include travel insurance packages that offer cover against medical emergencies and any medical expenses you might incur. But if you are not going to use a tour operator, it’s better to think about how to insure yourself in case you have unforeseen medical expenses.
To be prepared for any event, especially if you decide to go skiing, climbing or participating in other extreme sports, you need to buy two types of insurance:
- travel medical insurance, which will compensate you for the cost of medical treatment, e.g., ambulance services, hospital charges, and physicians’ fees, for an injury or illness during your vacation;
- emergency evacuation cover, which is extremely useful if you are a fan of extreme sports or going on holiday in a dangerous zone. The insurance usually covers transport to the nearest hospital and, depending on the situation, may cover costs related to the use of an air ambulance to evacuate you in the event of a natural disaster or terrorist attack.
2. Home burglary
Another unpleasant situation which, unfortunately, happens too often when we go on vacation is to find that our home was robbed while we were away.
Certainly, mental and emotional stress cannot be avoided and nothing can compensate for them. However, what can be compensated for is the material damage. Insurance policies against theft or burglary are gaining popularity in some countries.
With home burglary insurance, you can travel with the assurance that if your house is robbed, your insurance will compensate you financially, if not in full, then at least in part, for the losses.
Of course, there are other tips and tricks that can help you to protect your home from burglary, e.g., installing inexpensive window and door alarms, securing your sliding doors, if you have them, and using lights on a timer switch to make it look as if you are at home.
3. A fatal event
This is one of the main financial risks and is usually overlooked. This, of course, is understandable. Who wants to think about accidents and death when they go on vacation?
Fortunately, as with other risks, the consequences can be mitigated if we are prepared in advance. What do we mean? Grief and sadness cannot be removed with a magic wand, but there are digital inheritance services which help the financially responsible family member to ensure that the people they love will inherit their assets.
Digital inheritance services protect your loved ones quickly and easily. You simply have to follow 3 easy steps:
- Catalog your assets and passwords
- Nominate your beneficiaries and trustees
- Leave the rest to the Digital Inheritance provider and it will proactively inform your loved ones about the assigned assets and passwords in the case of a fatal event happening to you.
Again, digital inheritance services will not protect your loved ones from experiencing grief, emotional stress and sadness, but with services like DGLegacy, you can protect all types of assets.
This way, in the event of anything unforeseen happening to you, your loved ones:
- Are aware of the existence of your assets
- Can identify and locate your assets
- Can minimize the chance of unclaimed assets.
Now, although we have looked at the top 3 financial risks during vacations, unfortunately there are other risks, too, that you need to be aware of in order to be at least somewhat prepared. That will help you to stay safe and preserve your finances.
3 additional financial risks that you should consider while traveling
Let us briefly introduce them to you to give you a slightly broader view of financial risks in general while traveling.
- Cancellation Risk – There is always the possibility that you will have to cancel your trip and lose your money. If you are traveling with a tour operator, there’s a good chance you’ll have travel insurance to protect you if you need to cancel your vacation. You just need to make sure that it is included in your insurance package. If you are going to organize your trip yourself, you’d better use the free cancelation options for every booking that you make. This way, you can easily adjust your travel plans at any time and will probably pay zero cancelation fees.
- Lost or damaged luggage – This is the most common financial risk when traveling abroad. Loss or theft of your personal documents is also included here. It is an unpleasant and stressful experience to discover that your personal belongings are missing and a stranger is probably taking advantage of them. Unfortunately, when you are traveling abroad, it can become a nightmare that is hard to shake off. Again, if you have travel insurance, you can get reimbursed for the loss, damage, or delay.
- Hidden travel costs – Especially during the COVID-19 pandemic, the need to get multiple tests for COVID-19 before your trip can be financially overwhelming.
If you travel by car, there are other hidden or unexpected expenses, too.
Our advice is to take all the above risks into account when planning your next vacation. Analyze which of the risks are most applicable to you, and do the best you can to protect yourself and your loved ones. Make sure to avoid the 3 main financial risks during your travels.
Don’t forget, the emotional effect of these distressing scenarios cannot be avoided. But there are insurance and digital inheritance services which can protect your family and loved ones in the case of an unforeseen event happening to you.