‘Coolcations’ Popular With Wealthy Clients But Come With Risks: What Financial Advisors Need to Know

With acceleration global warming Today, anyone who can afford it wants to escape the heat. For the wealthy, the trend is to head north—not south—to destinations like Whistler, B.C., Greenland, Iceland and even Antarctica. These and other cold destinations have become popular year-round, and these vacations often include an adventure component.

But this new trend, dubbed “cooling cations,“carries particular risks for wealthy travelers.

Take Greenland, for example, where popular summer activities include diving among whales and icebergs and stand-up paddleboarding in Arctic waters, all of which carry risks of physical injury.

As a financial planner, It is your responsibility to ensure your HNW clients are covered If things go wrong as they head north, advise them to speak to their insurance broker and take out cover for any mishaps that may occur and ensure their cover extends worldwide. The right plan will include contingencies specific to high net worth holidaymakers; below are examples of cover that might apply.

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Types of Coverage Wealthy Travelers Should Consider

Emergency medical coverage protects against unexpected medical expenses. People traveling to remote locations should get at least $100,000 in coverage.

Medical evacuation insurance covers emergency evacuation costs. Coverage includes transportation to the nearest medical facility, whether within the country or if transportation out of the country is necessary. When traveling abroad, it is appropriate to purchase $1 million in medical evacuation coverage.

Trip cancellation coverage reimburses up to 100% of prepaid, non-refundable travel expenses if a person must cancel for a covered reason.

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Sports and activities coverage extends medical coverage to travelers participating in a sport or adventure activity such as hiking, skiing or mountain biking.

Coverage of political evacuations provides resources in the event of political unrest, armed conflict, or personal threats. It may also cover predetermined emergency plans to transport travelers to safety.

Kidnapping and Ransom (K&R) Coverage Hostage recovery services, security services and protection programs are included. Some insurers also offer pre-travel awareness training for high-risk individuals; others may track the movements of wealthy travelers to help keep them safe.

Bonus Tips on Travel Insurance

There is a misconception that credit card travel protection is a replacement for travel insurance. While cards can cover common travel disruptions, few offer adequate medical coverage for international travel, and trip cancellation coverage is very limited.

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Additionally, most travel insurance policies limit the amount that can be reimbursed for lost, damaged or stolen personal items, so expensive jewelry, luxury items and other valuables should be insured through other sources.

Some cancellation policies include coverage limits for cancellation benefits, which is an important consideration for travelers with expensive trips. For more flexibility when it comes to cancellations, travelers can add “Cancel for Any Reason” to their policy, which provides a partial refund if the traveler cancels for a reason not listed in their policy.

Finally, note that it is essential for those traveling abroad to address their coverage needs in advance to ensure the policy takes effect before they depart.

Preparation is key. The right policies and an action plan can make your guests’ next stay an unforgettable one.