nullBy Lorna Tan, Finance Correspondent

The recent unrest in Mumbai and Bangkok is a harsh reminder that there is something you should not leave home without. And it is not your credit card.

Adequate travel insurance is now arguably just as important as your passport when you are heading overseas.
These policies cover the usual risks such as loss of baggage and trip cancellation.

But events in India and Thailand have illustrated that things can quickly become even more complicated.

Travellers can get stuck abroad for much longer than they intended - and that raises questions over whether your travel policy offers the option of extending the cut-off date.

Experts advise travellers to consider this and other issues carefully, and to shop around to find a policy that meets your needs.

Most people buy travel cover primarily because overseas medical expenses can be very high, said the president of the General Insurance Association (GIA), Mr Derek Teo.

'Purchasing a travel policy gives the policyholder peace of mind, so that he can enjoy the trip with no worries over hefty medical bills should he be suddenly struck with major illness or sustain serious accidental injuries.'

But it is also vital to ensure the coverage is valid even if you are caught up in events such as terrorism or riots.

Mr Patrick Lim, associate director of financial advisory firm PromiseLand, said that taking out travel insurance has been a 'no-brainer' since the New York terrorist attacks in 2001. Events in Mumbai and Bangkok have simply reinforced this point.

The good news is that it does not cost an arm or a leg to buy travel insurance.

For instance, insurance cooperative NTUC Income charges $52 for its 'classic' range of benefits for a family of four visiting Hong Kong for seven days. That premium takes into account a current promotional discount of up to 30 per cent.

Income also allows customers to call a 24-hour hotline to activate travel insurance at any time before their departure. The service is very popular, with 90 per cent of its travel insurance activated online or over the phone.

Bear in mind that not all travel policies are created equal so you should always know your options and read the fine print on what is covered and excluded.

Some general exclusions are pre-existing illness, suicide, injury or sickness resulting from biochemical and nuclear terrorism, and wars.

Here is a checklist of things to look out for when considering a travel policy:

1 Does it meet your needs?

Make sure the benefits are adequate for you. A superior plan commands a higher premium but it will offer better benefits such as higher claim limits for death and medical expenses.

2 Premiums

Make sure the policy covers the period you are abroad and all the countries you will visit. Insurers also offer group plans covering two adults and children below a certain age.

For regular travellers, it may be more cost-effective to buy annual cover. This avoids the hassle of arranging a policy for every trip you make.

3 Terrorism cover

Check if your travel policy covers terrorism and other unrest. Some policies contain conditions, even if they might seem rather obvious. For instance, the policy might be valid provided the insured is not an active participant in the unrest, said Mr Teo.

4 Option to extend travel cover

Some travel plans such as the AIG Assist travel policy give the policyholder the option to extend the coverage before it expires. AIG Assist is marketed by general insurer American Home Assurance, a unit of United States insurer American International Group (AIG).

The option to extend the coverage would certainly have come in handy if you had been one of the 350,000 passengers stranded in Bangkok when its airports were seized by Thai anti-government activists. The airport blockade lasted eight days.