How do I know if travel insurance is worth buying for a specific trip?

Compare the premium to the probability-weighted value of two benefits: trip cancellation reimbursement (probability of cancelling × trip cost × reimbursement %) and medical/evacuation coverage (probability of a medical emergency × the cost gap your existing health insurance wouldn't cover). If the combined expected benefit exceeds the premium, it's expected-value-positive to buy.

Does my regular health insurance cover medical emergencies abroad?

Usually not, or only partially. Most US domestic HMO and EPO plans provide 0% coverage outside their network's country. Some PPOs and Medicare Advantage plans cover a partial amount at an out-of-network rate. Check your plan's Summary of Benefits before assuming any coverage carries over internationally.

Why might travel insurance be worth it even with a negative expected value?

Because medical evacuation costs are a tail risk, not just an average cost — a serious injury requiring evacuation from a remote location can run $25,000 to over $100,000. Insurance exists partly to cap catastrophic, low-probability losses, which expected-value math alone can understate, especially when the trip cost itself is small relative to the medical exposure.

What's the difference between standard trip cancellation coverage and Cancel For Any Reason (CFAR)?

Standard cancellation coverage only pays out for a specific list of covered reasons (illness, death in the family, certain job-loss situations). Cancel For Any Reason lets you cancel for literally any reason, but typically reimburses only 50-75% of trip cost (not 100%) and must be purchased within a short window, often 14-21 days, of your initial trip deposit.

A $250 Travel Insurance Policy Breaks Even at Just a 5% Cancellation Chance on a $5,000 Trip

We ran a $5,000 international trip with a $250 Cancel-For-Any-Reason policy through the calculator. Expected value turns positive once your chance of needing to cancel or interrupt the trip clears about 5% — and that’s before even counting the medical-evacuation coverage most US health plans don’t extend abroad, which pushes the case further in the policy’s favor.

The breakeven, worked out

	Value
Trip cost	$5,000
Insurance premium	$250
Cancellation reimbursement	100%
Breakeven cancellation probability (ignoring medical)	$250 ÷ $5,000 = 5%

At exactly a 5% chance of needing to cancel, the expected cancellation benefit alone ($250) matches the premium. Any additional medical-emergency coverage on top of that only strengthens the case — a 1% chance of a $30,000 medical emergency, with zero existing coverage abroad, adds another $300 of expected benefit by itself.

Why medical coverage matters more than the expected-value number suggests

Trip cancellation is a bounded, moderately likely risk — capped at your prepaid trip cost. Medical emergency abroad is a different animal: lower probability per trip, but effectively uncapped, with real evacuation costs running into six figures depending on location and severity. Expected-value math treats a 1%-probability, $100,000 loss the same as a 100%-probability, $1,000 loss (both average out to $1,000) — but only one of those is a catastrophe you can’t easily absorb out of pocket. That’s the argument for buying coverage even when the expected-value number looks unimpressive: insurance’s real job on the medical side is capping the tail, not winning on average.

Where this framework doesn’t apply

Your flights and hotel are already fully refundable. If your actual non-refundable exposure is much smaller than the trip’s sticker price, run the numbers on the real at-risk amount, not the total cost — the breakeven percentage moves accordingly.
You already have meaningful coverage abroad. Some credit cards bundle limited travel medical/evacuation benefits, and some PPO or Medicare Advantage plans cover a partial amount out-of-network internationally. Check before assuming zero existing coverage.
Your destination has excellent, cheap medical care. A trip to a country with low-cost, high-quality healthcare and easy evacuation logistics carries much lower expected medical cost than a remote trek or a location with limited infrastructure — don’t reuse the same cost assumption across very different trips.
You’re buying “Cancel For Any Reason” too late. CFAR riders typically require purchase within 14-21 days of your initial trip deposit. Missing that window means you’re evaluating standard cancellation coverage instead, which only pays for a specific covered-reasons list — a materially different (lower) probability of an actual payout.

What to actually do

Check your credit card’s travel benefits and your health plan’s Summary of Benefits for any existing coverage before assuming you have none.
Reduce your trip-cost input to the truly non-refundable portion if flights/hotel are already flexible.
Get a real quote and read the actual reimbursement percentage — CFAR riders often pay 50-75%, not the 100% people assume.
If your destination is remote or medically under-resourced, weigh the medical-evacuation coverage seriously even if expected value looks marginal — that’s the tail-risk case, not the average-case one.
If buying CFAR, confirm you’re still inside the purchase window from your initial trip deposit.

For the same expected-value logic applied to a domestic hospital stay, see how a plan’s deductible and out-of-pocket max determine your real medical cost.

Open the Travel Insurance Value Calculator → and run your own trip cost, risk estimates, and coverage terms.