How travel medical insurance works and why it's so important

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If you live in the U.S. and have private health insurance, Medicare or Medicaid, you're probably not covered overseas.

A good travel insurance policy will cover any surprise doctor's bills, hospital stays or prescriptions you might need while far away from home. These policies can even step in for more extreme cases, like helping to pay for medical evacuation if you're in a remote area and need to be flown somewhere for treatment.

Travel medical insurance is one part of a standard travel insurance policy, which also includes benefits like trip cancellation and interruption. However, it's possible to buy a standalone medical insurance policy that doesn't include other benefits.

Here's what to know about travel medical insurance, including what it covers, how much it costs and which companies have the best policies.

Travel medical insurance pays for emergency health care while you're abroad, including doctor's visits, lab tests, hospital stays and ambulance services.

Travel medical coverage can also include:

• Medical evacuation, if you need to be taken to another area or sent home for treatment.
• Emergency dental care.
• Accidental death and dismemberment coverage, if you are killed or lose a limb, eye or hearing in an accident
• Repatriation of your body if you die while on a trip.
• 24-hour assistance to help you navigate a foreign health care system

Coverage is included in standard travel policies, but you can also buy standalone plans.

A plan with primary medical coverage will pay out before you need to submit claims to any other applicable health insurance you may have, while a secondary plan requires you to file with your primary carrier first.

Travel medical coverage is often part of a comprehensive travel policy that also includes reimbursement for trip cancellation, lost bags and other situations.

Travel insurance policies average between 4% and 10% of your trip's total nonrefundable costs, although the price will vary based on your age, destination, trip length and any add-ons you buy.

A standalone travel medical policy is almost always less expensive than a comprehensive policy. For a 30-year-old taking a one-week trip to the United Kingdom, for example, a travel medical plan from IMG costs an average of $19, while a comprehensive travel plan runs about $74.

Existing health issues are usually not covered by travel insurance unless you have a pre-existing condition waiver. To get one, you must insure 100% of your nonrefundable trip costs and be medically able to travel at the time of departure.

You must also buy your policy within 14 to 21 days of booking, depending on the insurer.

Certain medical conditions, including pregnancy, dementia, mental health issues and substance abuse, are typically not covered by a waiver.

Your policy should have at least $250,000 in emergency medical coverage, although the amount can depend on a variety of factors, including:

• What are you doing? Planning on crossing skydiving or swimming with sharks off your bucket list? Try to select a plan with at least $500,000 or even $1 million in medical coverage.
• Where are you going? Will you be in a remote area with limited medical resources? Consider a medical evacuation limit of at least $500,000.
• Your age and medical history: If you're older or have ongoing health issues, you should select a plan with a higher coverage limit and make sure you qualify for a pre-existing conditions waiver.

If you have health insurance through your employer, review your policy. A few plans include some overseas coverage, which can affect how much you need and whether it should be primary or secondary.

You can buy a policy that only covers health-related expenses when you're traveling. While it won't cover canceled flights, lost luggage or missed connections, it's cheaper than comprehensive travel insurance and it might come with higher limits. 

If you book your trip with a credit card, it may come with some travel insurance benefits. However, each card is different, so you'll need to read up on your card benefits to see what's included.

You may also be able to get a standalone travel medical plan from your health insurance provider. United Healthcare's SafeTrip and Blue Cross Blue Shield's GeoBlue both have up to $1 million in medical coverage, for example, with no deductible.

Getting a good travel insurance policy — whether it's a standard travel insurance plan that covers trip cancellation and interruption along with medical coverage, or just standalone medical coverage — is a good idea for many travelers. After all, it can go beyond just helping you avoid pricey medical bills, as many insurers also offer services for translation and even medical referrals.

CNBC Select picked the best travel insurance for medical coverage in a variety of categories.

Best comprehensive plan: Travelex

Who's this for? Travelex's Ultimate plan strikes a balance between affordability and generous coverage limits. This is a standard travel insurance plan, so it also includes trip cancellation and interruption coverage, as well as coverage for your belongings. And for each insured adult, Travelex includes free coverage for one child 17 or under.

Standout benefits: Travelex has a wide window for getting a pre-existing condition waiver, allowing buyers to qualify up to 21 days after booking their trip.

Best standalone travel medical insurance: IMG

Who's this for? IMG's LX policy provides robust but affordable travel medical coverage. It comes with:

• Up to $500,000 for emergency medical expenses
• Up to $1 million for emergency medical evacuation and repatriation
• A waiver for pre-existing conditions if your policy is purchased at or before the final trip deposit.

Standout benefits: IMG also offers health insurance for expats with longer coverage terms than standard travel policies.

Best for high limits: Travel Insured International

Who's this for? Travel Insured International's World Trip Protector Platinum plan reimburses up to:

• $250,000 for emergency medical expenses
• $1 million for emergency medical evacuation and repatriation
• Up to 100% of trip cancellation costs and up to 150% of trip interruption costs, up to $250,000

Standout benefits: While some insurers don't cover dental expenses, Travel Insured International will cover them up to $750.

Best for pre-existing conditions: Seven Corners

Who's this for? Seven Corners' Trip Protection Elite plan has a short lookback period of 60 days, which is the timeframe when a company can consider past health issues to exclude them from coverage. That's a smaller window than many competitors with 120 or 180 day lookback periods.

Standout benefits: Seven Corners also offers travel insurance for groups and annual plans for multiple trips.

Best travel insurance marketplace: Squaremouth

Who's this for? Squaremouth provides price quotes from dozens of providers instantly, allowing you to choose the one that offers the most bang for your buck.

Standout benefits: Squaremouth's money-back policy lets you get a full refund within 14 days of purchase, provided you haven't departed or filed a claim yet. If you have a complaint with the handling of your claim, Squaremouth's Zero Complaint Guarantee means it will mediate with the provider on your behalf. If the issue isn't resolved to Squaremouth's satisfaction, it will remove the provider from its platform. 

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every travel insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of travel insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

CNBC Select analyzed more than two dozen U.S. travel insurance companies, focusing on cost, limits for medical coverage and availability of waivers for pre-existing conditions.

We based our selections on a quote for a 30-year-old traveler visiting the United Kingdom for a one-week trip with $2,000 in nonrefundable expenses.

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

Based on these criteria, our picks for best medical travel coverage are:

Best comprehensive travel insurance: Travel Insured International
Best standalone travel medical insurance: IMG
Best for high coverage limits: Travelex
Best for pre-existing conditions: Seven Corners
Best travel insurance marketplace: Squaremouth

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