About once a month, I’ll get an e-mail from a reader asking about the best credit card travel insurance for seniors. It’s a great question since having travel medical insurance is a must whenever you leave your home province. But figuring out which card is the best can be a bit tricky. You need to factor in how much coverage you need, how long you’ll be travelling for and what the conditions are for your insurance to apply.
Travel Insurance for Seniors
Although many of the best travel credit cards in Canada include great travel insurance, many of them don’t really help seniors in a meaningful way. In this article, I’ll go over everything you need to consider when choosing a credit card with travel insurance for age 65+ and why you may still want to consider purchasing an outside policy. A reminder, regardless of what you go with, you need to read your policy to find out exactly what you’re covered for.
Age and length
When looking at credit card travel insurance for over 65, you could argue that the most important thing to look at is how many days you’re covered for your age. Many credit cards give 15 – 25 days if you’re under the age of 65, but if you’re 65+, those same cards typically only give you about 3 days of coverage – which isn’t very helpful.
There are a few exceptions that will appeal to seniors. The
If you have the
All of these credit cards with travel insurance for age 65+ are not bad, but many seniors travel for more than 15 days which could be problematic. Of course, the simple solution is to extend your coverage, but then you need to pay out of your pocket.
Insured amount
Another thing that people consider when looking at credit card travel insurance for over 65+ is the amount you’re covered for. Regardless of your age, your credit card with travel medical insurance will insure you for the same amount. Most of the time it’ll be for $1,000,000 but there are a few cards that give you $5,000,000 in coverage including the American Express Platinum Card which is what I use personally (I love unlimited lounge access). Unfortunately, the Platinum Card travel insurance only covers you up to the age of 65.
The good news is that the National Bank World Elite MasterCard and the Desjardins Odyssey World Elite MasterCard also give you $5,000,000 in travel medical coverage so overall, they both offer the best credit card travel insurance for seniors. That said, the Desjardins Odyssey World Elite MasterCard doesn’t come with flight delay insurance while the National Bank World Elite MasterCard lacks hotel/motel burglary and travel accident insurance.
Charging your travel expenses to your credit card
Here’s the interesting about travel medical insurance. You don’t need to charge any of your travel expenses to your credit card for your policy to apply. As long as you’re a cardholder, your travel medical policy would apply (assuming the reason you’re making a claim is valid).
On the flip side of things, all of your other travel insurance such as trip cancellation or lost luggage usually requires you to charge 75% – 100% of your trip expenses to your credit card for your policy to be valid.
For example, this is what the National Bank World Elite MasterCard shows for trip cancellation or interruption insurance.
“Trip cancellation or delay (up to $2,500 per insured): In the event of a trip cancellation or delay before departure, the following expenses will be reimbursed, provided that a portion or the entire cost of the trip was charged to the account.”
That basically means you only need to charge a portion of your trip expenses to your card for the trip cancellation to be valid. However, if you look under the vehicle rental insurance, it states the following:
“Eligible vehicle rental by the cardholder, paid for entirely with the card or rewards points earned with the card. Coverage applies anywhere in the world except locations where this coverage is prohibited under local law or rental agency policy.”
What that means is you need to charge the entire amount of your vehicle rental to your National Bank World Elite MasterCard for your vehicle insurance to be valid. In addition, you need to decline the car rental agency’s optional insurance.
You really need to read the fine print to find out what the conditions are for your travel insurance to apply.
Related: Life Insurance Options for Seniors
Why you may still want a separate insurance policy
Although the credit cards I’ve mentioned above may suit your needs, there’s one thing you must know about your policy. Credit card travel insurance is underwritten when you make a claim which could potentially leave you exposed.
For example, let’s say you’re on holiday and you go to the hospital due to some chest pains. The doctors there diagnose you with a minor heart attack which requires a few days of overnight monitoring and some drugs. Now let’s say you went to your family doctor four months earlier with complaints about chest pains and you’re diagnosed with indigestion. Since you had complained about a loosely related issue before, your travel insurance provider could deny your claim on grounds of a pre-existing condition.
A better solution might be to buy a multi-trip insurance policy at the start of the year. When you buy a travel insurance policy, the underwriting is done at that time. That means if you had stable health which includes no dosage changes to your medication in the last six months, you’d likely be insured for any medical treatment abroad during the time of your policy.
There are still some exceptions such as pending diagnostics or travel to destinations with a travel advisory, but the point is the underwriting is done at the time of purchase, so you’ll have a much clearer idea of what you’re insured for.
The cost of a multi-trip travel insurance policy can vary depending on your needs, but it can be quite reasonable. Yes, it’ll likely cost you more than the annual fee that comes with a credit card that includes travel insurance, but you’d probably get better coverage.
Final Thoughts
Although travel insurance included with some credit cards may be adequate for some seniors, getting a separate plan gives you better protection. This doesn’t apply to just people over the age of 65, anyone who is relying strictly on their credit card travel medical insurance may want to consider other options.
Barry Choi is a personal finance and travel expert at MoneyWeHave.com. He has been quoted by media in Canada and the United States, including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live. You can follow him on Twitter: @barrychoi
Happy New Year and welcome back to the blog! With an unforgettable 2019 now in the rearview mirror we look ahead to 2020 and what’s to come. Goal setting is such a powerful motivator for me. This year, as I move to full-time blogger, freelancer, and fee-only advisor, it’s even more critical to map out my 2020 financial goals and make this transition a success.
Goal #1: Maintain Current Spending and Savings Rate
The promise I made to myself and my family is that this transition will have no negative financial impact to our lifestyle. That means maintaining our current spending on things like groceries, entertainment, kids’ activities, and travel. I also refuse to reduce or pause our current savings contributions, so we must maintain our savings rate.
Thankfully, I’ve diligently tracked my spending for the past decade and so I know how much we need to earn to hit our spending and savings goals. I’ve also tracked our business income for the past 10 years and have a good idea of what to forecast for 2020 income.
When I created our 2020 budget I used last year’s spending as a baseline and made sure to include our savings targets in the forecast.
While my estimates are conservative I do have a back-up plan in case our income does not meet these projections. We have a $35,000 emergency fund that can be tapped during slow earnings months. I don’t want to work any harder than I have to but I also have the option to increase my work output – like taking on more writing assignments from existing or new freelance clients.
This goal is highly linked to the remaining goals below:
Goal #2: Max Out RRSPs
I’ve maxed out all of my available RRSP room, but will have another $3,600 or so to contribute in 2020 (reduced thanks to the pension adjustment). I’ve set up automatic contributions of $300 per month to max out my RRSP for 2020. I invest 100 percent of my RRSP funds in Vanguard’s VEQT.
My wife has about $9,000 in available contribution room and she’ll likely max that out before the March 2nd RRSP deadline. My wife’s RRSP is invested in a Wealthsimple robo-advisor account.
Goal #3: Top-Up TFSA
Many of you know the story. I maxed out my TFSA from 2009-2011, then withdrew all the funds to top-up the downpayment on our new house. Then we bought a new car and paid it off over three years, which meant I did not have the funds available to contribute to my TFSA.
Now I’m in catch-up mode and have been contributing $1,000 per month ($12,000 per year) to my TFSA for the past two-and-a-half years. I aim to continue that plan throughout 2020 and beyond until I’m fully caught-up.
I invest 100 percent of my TFSA funds in Vanguard’s VEQT.
Goal #4: Max out RESPs
We’ll continue to max-out our kids’ RESP account – contributing $2,500 per child, per year to take advantage of the $500 per child education savings grant (CESG).
The kids’ RESP account is invested in TD e-Series funds (Canadian equity, U.S. equity, and International equity funds). My kids will turn 11 and 8 this year and so I plan to introduce a bond fund soon to start lowering the volatility of this portfolio.
Goal #5: Travel More
No longer limited by 22 vacation days I plan to increase our travel time to include three international trips and one Canadian trip in 2020. Two of those trips are already booked, with a week in Maui this February and three weeks in Italy in April.
We’re also eying a potential return to Scotland this summer, plus a trip to the west coast in the late summer / early fall.
Our flights to Maui and Italy, plus half of our accommodations were paid for last year (mostly with credit card rewards points). The remaining costs are included in our 2020 budget.
Goal #6: Work Less
I’ve had a side-hustle for as long as I can remember. When I started my career in hospitality, I joined every board and community organization I could get into to raise my profile and build my resume. That meant sacrificing a lot of personal time to volunteer and network.
Then I switched careers and had kids. I dropped most of the volunteering to spend more time at home with my family. But that’s also when I started this blog, and spending some of my evenings and weekends writing and eventually doing one-on-one financial planning.
I started burning out last year. So I made the bold decision to quit my job and focus on my online business full-time. I don’t want to fall into the same trap of overworking myself, but at the same time I want the business and our finances to flourish.
My goal is to spend no more than 25-30 hours per week working on my business. This includes writing articles here, for the Toronto Star, and at Young & Thrifty, plus working with clients in my fee-only financial planning practice, and promoting the brand.
A tentative schedule has me working Monday to Thursday from 8:30 a.m. to 11:30 a.m., taking an hour break for lunch, and working from 12:30 p.m. to 3:30 p.m. On Friday I’d work from 8:30 a.m. to 11:30 a.m. The goal is to be finished work when my kids get home from school.
My wife plays a major role in helping manage the work flow, as she handles all of the client emails, bookkeeping, and administration. That frees me up to do what I do best, which is write and plan.
Goal #7: No New Debt
This has been a goal for several years and one of the reasons why we can maintain such a high savings rate. We have no debt besides our mortgage. We’ve been car payment free for several years, and our cars are in great shape – there’s simply no need to upgrade them for the foreseeable future.
We’re happy in our current home with no immediate plans for renovations. There’s simply no need to take on any new debt.
This Week’s Recap:
On Tuesday I recapped the year with my 2019 net worth update. A 21 percent gain year-over-year has us on track to hit the $1M mark by the end of this year.
January typically brings an uptick in search traffic to the blog and this year is no different. Here’s what new visitors have been landing on:
- 3 Reasons To Take CPP at Age 60
- CPP Payments: How Much Will Your Receive From Canada Pension Plan?
- TFSA Contribution Limit and Overview
Over on Young & Thrifty I offered eight financial resolutions for the New Year.
Promo of the Week:
Also popular this week is my article explaining how to transfer your RRSP to Wealthsimple. It seems many of you are looking to reduce your investing fees and finally make the switch to low-cost investing through a robo-advisor.
Wealthsimple is Canada’s leading robo-advisor and Boomer & Echo readers get their first $10,000 managed free for one year when they open up a new Wealthsimple account.
Weekend Reading:
Our friends at Credit Card Genius looked at the best credit cards in Canada across 24 different categories to compile their list of best credit cards in Canada.
Travel expert Barry Choi answers some frequently asked questions about travel programs and credit card hacking.
The Atlantic’s Derek Thompson stops by The Compound to discuss how and why things go viral:
Morgan Housel says the amount of progress we’ve made during most of our lifetimes is both astounding and overlooked.
From BuzzFeed News, tech’s biggest flops of the decade included failed Kickstarter projects, flammable gadgets, and investment bubbles.
This time of year is filled with economic predictions and forecasts. Forget it – here’s why stock market predictions are less than worthless.
Here are some more useful New Year’s resolutions for investors, from a behavioural scientist:
“Sticking to your principles and enjoying the long-term benefits of compounding sounds easy, but the behavioural realities of investment means that this is far from the case. Doing nothing requires a great deal of effort.”
PWL Capital’s Ben Felix takes down Dave Ramsey’s shockingly bad investment advice in his latest Common Sense Investing video:
David Aston explains why some people can put off savings until their 50s and still meet their retirement goals.
Rob Carrick highlights trends of the past decade that made investors smarter and richer, and how they can do the same in the 2020s.
A wild read about Canada’s lost loonie: A coin that was supposed to be much different than the one we know today, altered after a mysterious theft in 1986.
Finally, meet Kevin Kelley, the man who’s going to save your neighbourhood grocery store.
Have a great weekend, everyone!
I remember writing last year’s net worth recap and being disappointed that I didn’t reach my goal after the stock market tanked during the last three months of 2018. What a difference a year makes!
My investments were up 20+ percent this year. We also reached all of our 2019 financial goals, including maxing out my RRSP, contributing $12,000 to my TFSA (to catch up on unused room), maxing out the kids’ RESPs, not taking on any new debt, and keeping our epic trip to Scotland and Ireland affordable.
The huge gains in the stock market boosted our overall assets to more than $1,000,000 and pushed us to within a hair of my 2019 net worth target of $830,000. Here’s how it all breaks down:
Net worth update: 2019 year-end review
| 2019 | 2018 | 2017 | % Change | |
| Assets | ||||
| Chequing account | $1,500 | $1,500 | $1,500 | — |
| Savings account | $35,000 | $15,000 | $12,500 | 133.33% |
| Defined Benefit Plan | $224,054 | $198,920 | $174,843 | 12.64% |
| RRSP | $208,614 | $162,939 | $162,201 | 28.03% |
| TFSA | $49,239 | $29,378 | $20,327 | 67.61% |
| RESP | $52,754 | $38,472 | $34,442 | 37.12% |
| Principal Residence | $459,000 | $459,000 | $459,000 | — |
| Total assets | $1,030,161 | $905,209 | $864,813 | 12.13% |
| — | ||||
| Debt | ||||
| Mortgage | $201,665 | $213,678 | $225,290 | (5.62%) |
| HELOC | — | — | $3,816 | — |
| Total debt | $201,665 | $213,678 | $229,106 | (5.62%) |
| — | ||||
| Net worth | $828,496 | $691,531 | $635,707 | 21.25% |
A few questions that I often get asked after posting a net worth update:
Credit Cards & Banking
We funnel all of our purchases onto a couple of different rewards credit cards to earn points on our everyday spending.
Our go-to card is the now discontinued Capital One Aspire Travel World Elite MasterCard. We have a grandfathered version that pays 2 percent back on every purchase and comes with a 10,000-point bonus each year.
Our secondary card is the American Express Cobalt Card, which we use at non-Costco grocery stores and on dining and liquor. Finally, we look for the best credit card sign-up bonuses and time our large annual spending (car and house insurance) around these offers.
We each have no-fee chequing accounts at Tangerine, which we use for bill payments, email money transfers, and the odd debit purchase.
The rest of our banking is done at TD, including our mortgage, line of credit, and investments.
Pension
Each month I contribute roughly 13 percent of my salary to a defined benefit pension plan that my employer also matches. The amount listed above is the commuted value of the pension if I were to leave the plan today. <–Update: I quit my job at the end of the year and I’m just awaiting the final valuation of the plan before determining whether I’ll keep it in the pension or take the commuted value and invest it in a LIRA.
RRSP / RESP
The right way to calculate net worth is to use the same formula consistently over time to help track and achieve your financial goals.
My preferred method is to list the current value of my RRSP and RESP plans rather than discounting their future value to account for taxes and distributions.
I consider a net worth statement to be a snapshot of your current financial picture, so when it comes time to draw from my RRSP and distribute the RESP to my kids, net worth will decrease accordingly.
Principal Residence
We bought our home in 2011 for $425,000 and developed our basement a few years later, increasing its value to $450,000. The next year I bumped up the market value by 2 percent (which is still less than its city-assessed value), but the local real estate market has since flattened – with nothing selling in our price range – and so I’ve left the value at $459,000 for the past three years.
Final thoughts and a look to 2020
I’ve had a long-standing goal to reach a net worth of $1M by the end of 2020. I’ll need another 20 percent increase in net worth to get there.
One minor wrench in the plan is that I quit my full-time job, and so I’ll be relying entirely on income from this blog, freelance writing, and my financial planning service.
I don’t see this as a problem so much as an opportunity. Both my salary and career trajectory had stagnated in the public sector, and the next four years of budget cuts look to be brutal. Meanwhile, my side business was growing by leaps and bounds.
Online income surpassed my full-time salary in 2018 and increased by another 30 percent in 2019. And that was with me dedicating just 12-15 hours a week to my online business. Imagine if I put another 10-15 hours a week into it?
That’s the plan, anyway. If successful, we’ll be able to meet our savings goals, accelerate our mortgage payments, and travel more than ever before. I’m looking forward to the challenge ahead, and to hit that $1M net worth milestone!
How did this year go for you? Did the rising stock market drive your net worth higher? Let me know in the comments below.