What You Need to Know
- The COVID-19 pandemic made business travel much less predictable.
- Travel insurance can now protect you against trip interruptions as well as cancellations.
- IFAR benefits help with changes you make, rather than changes travel services providers make.
Throughout the last few years, the significant changes in travel have altered the life and annuity advisor travel landscape we once knew.
The ongoing effects and uncertainties of the COVID-19 pandemic and new variants remain, as well as the war abroad and the fears that it could spread.
Financial services firms’ clients have experienced increased volatility.
Firms like yours may have encountered more uncertainty in connection with their own operations.
As the world remains in a state of flux when it comes to travel, how can financial services firms move forward with travel plans while ensuring their employees’ trips are well protected?
To help with difficult travel situations, the travel insurance industry offers optional benefits to allow cancellation or interruption of travel for any reason not otherwise covered: cancel for any reason (CFAR), and a newer benefit, interruption for any reason (IFAR).
At Seven Corners, which is a travel insurance provider, we offer both coverage options.
Our team has experienced an increase in calls from travelers asking about CFAR and IFAR as well as an increase in the popularity of these options.
In fact, we saw a 180% increase in the sale of plans with CFAR in 2020 compared to 2019, and due to the continued uncertain nature of travel, we continue to see increased purchases of CFAR compared to what was observed prior to the pandemic.
Due to the questions about these benefits and the coverage they provide advisor travelers during unforeseen circumstances, our team put together information on what CFAR and IFAR are, what they cover, and how adding these options might be useful when planning a trip to visit a major client or attend an industry conference.
What is CFAR?
CFAR is an optional benefit offered on certain trip protection plans that allows travelers to cancel trips for any reason not otherwise covered.
With it, customers can be reimbursed for up to 75% of their nonrefundable trip costs if the CFAR benefit is purchased within 20 days of the initial trip deposit.
Travelers must also insure subsequent travel arrangements added to their trip within 15 days of the date they purchase them.
For example, if a traveler needs to extend their trip for a new conference presentation, they could add the additional expense for the conference and increased airfare within 15 days of the date they paid for each of them.
It is important to remember CFAR covers nonrefundable trip expenses; if a trip cost is refundable, there is no need to insure it.
It is also important to note that CFAR does not cover travel arrangements which are not provided by the travel supplier or the failure of the travel supplier to provide the travel arrangements due to cessation of operations for any reason.
This is because CFAR was designed for travelers to cancel their trip for any reason they wish, not because a travel supplier causes them to cancel.
Examples of When CFAR Would Be Helpful
Here are examples of situations where CFAR could help business travelers:
- Employees are concerned about a new variant of COVID-19 at their destination and want the option to cancel their trip if transmission rates rise, and they no longer feel safe traveling.
- A single-parent employee is having difficulty finding a caregiver for her children when she travels for business, and she is concerned she may have to cancel her trip if she cannot find a reputable person to care for her children before her next trip.
Additionally, if a business traveler wants the option to cancel a trip because of the current war in Ukraine, they could utilize CFAR, the only option available to obtain coverage for cancellations due to war.
Their reason for canceling a trip could include, but is not limited to, fear of travel due to the war.
Travelers should review the plan document for their state of residence for the requirements to purchase and make a CFAR claim.
What is IFAR?
IFAR is an important option for coverage plans in today’s travel climate as it gives travelers the option to interrupt their trip once it has already begun.
It is an optional benefit that reimburses up to 75% of unused and nonrefundable insured trip expenses.
It can also cover additional transportation costs to join a trip if a traveler leaves after their scheduled departure date, rejoins their trip from the point they interrupted it to the next scheduled destination, or travels to their originally scheduled return or final trip destination.
There are several requirements for IFAR, as it expands coverage for trip interruption beyond the list of covered reasons.