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The news that Tesco Bank is no longer offering travel insurance to new customers gives us pause to reflect on a trend that has become increasingly prominent in the financial services sector in recent years.

With all that in mind, if you do have a pre-existing medical condition, it is well worth seeking advice from a specialist provider, whether your bank offers you cover or has recently decided to withdraw its insurance services. View more here.

Banking and insurance have traditionally been two very distinct types of service within the financial sector. But banks have started to view insurance as an ideal way to add value to what they offer and therefore attract more customers.

A common model many banks are now using is to throw in insurance as a sweetener for new customers opening an account. Some will use such extra services as incentives for convincing customers to upgrade to a paid-for premium account. Travel insurance, along with other categories like home insurance, is viewed as ideal because it is low cost and, compared to the likes of car insurance, claim rates are relatively low.

But what are you actually getting when your bank offers you travel insurance?

Finer details

Bank account-linked travel insurance policies are always what are known as multi-trip annual policies – that is, they cover you for a fixed period (12 months) for several different trips within that time frame. For many people, this offers great convenience and value – you don’t have to think about buying insurance separately for every individual trip. And when it is bundled in as an added extra on top of your banking services, you don’t have to pay anything.

However, it is worth paying attention to the detail of what you actually get with one of these policies. For a start, if you read the small print, you will usually find that there are certain conditions applied, such as a limit to the number of trips you can take on your policy within a single year. Many people don’t get the ‘unlimited’ insurance they were expecting and can run into difficulties if they exceed their trip limit unawares and need to make a claim.

The people who need to be most cautious about travel insurance offered by their bank are those with pre-existing medical conditions. Account-linked policies tend to offer only a basic level of cover, and when it comes to paying out for the cost of receiving medical treatment abroad, that usually only means basic consultation and prescription costs, plus emergency care. Anything linked to a specific medical condition won’t be included.

In practice, that means anyone with an existing medical condition can’t rely on standard policies like these. Even if you need medical assistance for something completely unrelated to your condition, when you come to make a claim, you will probably be told your cover is invalid on the grounds that you have additional medical needs. You are supposed to declare these when you purchase a policy, but as banks don’t specialise in selling insurance, they cannot always be relied on to do the right kind of background checks – the policy is just an add on to the main product they are geared towards selling.

Most bank travel insurance policies also do not cover extenuating circumstances – such as coronavirus outbreaks. That’s why it’s important to draw up a list of things you’d like to be covered for when checking if your travel insurer can help you when you need it most. Find out more about how a specialist travel insurance provider can protect your holiday from the coronavirus.