How to Add Hundreds to Your Bottom Line
By: Sandy Saburn, CTIE

Want to add hundreds – or maybe thousands – of dollars to your bottom line without working with any additional clients? Here’s an easy way that also provides your clients with something they need: offer them third-party travel insurance.

I am a big proponent of travel insurance because I have seen what happens when people don’t have it. However, many travel agents go to great lengths to avoid talking about it! All it takes to change your mind about that is to have one client who has a serious medical issue, but their travel insurance saves the day. Then you will be a believer.

Look, I know that since the pandemic things have changed, and some clients had a bad experience with their insurance claim. The insurance wasn’t ready for the pandemic in the same way they weren’t ready for 9/11. There had not been a pandemic in more than 100 years, and it wasn’t on their radar. They have all updated their policies and changed processes as a result.

Regardless of the pandemic, the bottom line is that if your clients travel – particularly if they leave the country – they need travel insurance.

There are two reasons travel insurance is an important purchase:

  • To protect the investment the client made in their trip (cancellation coverage)
  • To protect the client in the event of a medical emergency while traveling (medical coverage)

Most travelers and many travel advisors only think about cancellation and give little to any thought to why they need medical insurance. There are a lot of people who don’t realize their travel insurance stops at the country’s border and a medical emergency can easily cost tens of thousands of dollars – or much more.

Yet every day someone traveling has a medical emergency – whether that’s some sort of sickness, a fall that breaks a bone, has a heart attack or stroke, or even dies. You do NOT want to be the agent who has a client facing a $25,000 medical bill and no insurance to cover it – especially if you never talked to them about insurance.

So, let’s look at both reasons for needing insurance and how you can help your client understand their needs to make the best decision.

First, cancellation coverage. This is the one thing that clients think about – in large part because of the pandemic. Yet many will tell you, “We are going on this trip no matter what.” So, here’s a good question to ask them, “If you have to cancel after penalties begin, what’s your plan?” Asking “What’s your plan?” encourages your clients to think about the reality of walking away from their investment.

Many clients mistakenly think that the vendor will be nice and just refund their money or give them a future credit. Not usually. So, they need to think about how that impacts them.

But the bigger financial blow for clients is if they have a medical need while they are out of the country. I want to share a story with you that was in Travel Research Online (http://bit.ly/1elhliM) a while ago. It really illustrates what can happen when your clients don’t have medical coverage.

“A few weeks ago I read a horrifying story that might have some serious implications for a travel agent. A mother and child were essentially being held medically hostage in Mexico after her son fell ill onboard a Carnival ship. Most of us have been on a cruise before. Most of us know that we all cringe when we see the bill that is quietly slipped under the cabin door on the last night. But what if that bill were for tens of thousands of dollars?

And you were held until it was paid…

…in cash?

The boy fell ill and needed an emergency appendectomy and a section of his bowel removed. Obviously this is nothing that Carnival is prepared to do between shifts of handing out Dramamine. He was offloaded to a hospital in Progreso, Mexico for the surgery. But the catch? The doctors and hospital needed to be paid in cash before the surgery.

Many US-based health insurance plans do not cover care in a foreign land and the cruisers did not purchase a supplemental travel insurance policy.

$3300 for surgery and $900 per day for a hospital stay in cash. Let that sink in for a moment.

Few of us have access to that type of funds immediately. And then there is the added cost of an air ambulance to the US and eventually back home. While no estimate is given, I suspect this medical bill will come close to $100,000.”

If they had Carnival’s Vacation Protection (http://www.carnival.com/about-carnival/vacation-protection.aspx) they would be reimbursed up to $10,000. But they would still have to pay the bill and then wait for reimbursement. Depending on how things go they could easily exceed the maximum for that plan. The average cost for a nurse escort is $11,000 and a medical evacuation is $25,000 – both are far above the maximum payout of Carnival’s plan.

However, if they had third-party insurance (like Allianz, Travelex, Travel Guard, Travel Insured or similar companies) they would likely not have to pay out of pocket. The traveler would simply have called a number and a skilled professional would begin assisting the mom with whatever she needed.

A few years ago, I talked to a representative of Pleasant Holidays’ ground operator in Cancun. She is the person designated to go to the hospital with PH or Journese clients who have medical emergencies. She told me lots of stories about what people without medical insurance have to deal with, but one stuck with me. She sat in a waiting room for hours with a woman whose husband had a heart attack and the hospital required her to pay $25,000 upfront for medical care. The woman called every one of her credit card companies and her bank and begged for assistance. Finally, she had to call her employer and ask for an advance on her salary. They stepped in and guaranteed the bill. Who wants to go through this?

Of course, you don’t want to scare your clients from leaving home. And while both of these examples are from Mexico, this is true all over the world!

Most clients aren’t aware that their medical insurance isn’t valid outside the US, even though it tells them that in their passport!

Then there are the people who think their credit card has travel insurance coverage, but don’t realize that in most cases they have to pay everything up front and then hope for reimbursement because it is secondary coverage.

Your role is to advise and educate, not sell. You probably aren’t licensed to sell insurance, so you should make the client aware of the need, provide a quote from your favorite travel insurance company, and if they have questions, they can ask the insurance company directly.

You may be asking why not just sell vendor insurance? It’s often cheaper and easier. There are 3 big reasons:

  1. Low coverage levels (as in the example above)
  2. Most plans are secondary coverage (meaning they have to pay the bill and jump through a lot of hoops in hopes of getting reimbursed)
  3. It doesn’t cover vendor default

If you are dealing with an older traveler, you may want to purchase a “zero cost” policy from a third-party insurance company so the traveler has medical coverage from that company and also purchase cancellation coverage from the supplier. This usually gives the traveler the best combination of coverage at the best price.

If your client refuses to buy insurance, make sure you have them sign a waiver saying they understand the potential loss they face.

OK, let’s get to the profit hack in all this. It’s simple. You’re working with this client already. You don’t need to find a new client. You just add this on for the clients you have. On average, each year each of our advisors at GTN puts more than $1,500 in additional income in their pockets – just from travel insurance. Some put close to $10,000 in their pockets.

If you aren’t selling travel insurance at all, reach out to the rep for the preferred providers for your agency and tell them you want help getting started. They will gladly educate you and help point you in the right direction.

Bottom line: it is something your clients truly NEED. You will be serving your clients and benefiting yourself at the same time. Truly win-win!