Types of travel insurance policies

Period of coverage

The biggest question is whether to get single-trip insurance, or periodic (for example, annual) coverage.

Single-trip insurance normally can be purchased any time up to the day before departure (or the day of departure, in some cases). The sooner you buy, the sooner you'll have protection for problems that come up before departure, so it makes sense to buy it as early as possible. On the other hand, you can't buy travel insurance until you have purchased your airline tickets and other covered items, or at least know how much they will cost.

If you travel frequently, annual coverage can be a lot cheaper. It often costs about the same as separate policies for just two or three trips. Also, it saves you the trouble of having to go out and buy a new policy every time you travel.

Add-ons

The next thing to consider is whether you'll need any specialized add-ons, or supplementary coverage, in addition to the base policy. You may need these if you have a pre-existing medical condition that could affect your trip, or you plan on engaging in risky activities like scuba diving or hang-gliding, or you'd like the freedom to cancel your trip for business or personal reasons that are not normally covered.

Rules for these add-ons vary greatly by insurer, so make sure to carefully read all the materials before making a decision.