As global temperatures rise, the affluent are seeking cooler escapes. Rather than heading south for the typical vacation getaway, high-net-worth individuals are increasingly choosing northern destinations like Canada, Greenland, Iceland and even Antarctica. This emerging trend, known as “coolcations,” offers a unique way to beat the heat, but it comes with its own set of risks.
In Greenland, for instance, popular activities like diving among icebergs and whales or paddleboarding in Arctic waters offer incredible experiences but can pose physical dangers. Similarly, the fascination with Emperor penguins has led to a surge in off-season trips to Antarctica, where travelers face temperatures that can plummet to 50 degrees below zero.
While these cooler getaways quite literally offer refreshing alternatives, it’s important for financial planners to guide clients through the potential risks, ensuring their unique escape doesn’t turn into a costly misadventure.
What Could Go Wrong?
A lot can happen between booking a trip and the actual departure date—an unexpected family illness, a personal injury or urgent work issues, to name a few. But even more concerning are the unforeseen challenges that might arise during said travels. Whether it’s a health emergency or a situation compromising an HNW family’s safety, having a solid strategy in place is crucial in not only protecting these individuals but also ensuring peace of mind.
Advisors should address several potential concerns with their clients before they embark on a trip:
- Injury risks. Exploring unfamiliar environments—such as high-altitude areas or icy terrains—comes with an increased risk of injury. Whether it’s a personal injury or an accident involving others, clients should be prepared for these potential hazards when traveling to regions with extreme conditions.
- Travel routes. Whether traveling by car, boat or plane, reaching remote locations can be perilous, especially if unpredictable weather arises. Advisors should emphasize the importance of having an exit strategy prepared before venturing to these distant destinations.
- Flight delays and cancellations. Many isolated regions offer limited flight options, meaning that if a flight is delayed or cancelled, rebooking may be difficult. Clients should be informed that easy access in and out of foreign countries, particularly those with challenging climates, cannot always be guaranteed.
- Access to medication and healthcare. Traveling abroad increases the risk of illness or injury, and most domestic health insurance policies don’t provide coverage internationally. Without additional travel insurance, medical expenses can quickly add up. Remote destinations like the Arctic, Iceland or high-altitude mountain ranges pose even greater risks, with harsher conditions and limited access to emergency care.
How to Mitigate Travel Risks
Financial planners should encourage their clients to consult with their insurance brokers to secure coverage for potential disruptions while on vacation. A comprehensive insurance plan will offer tailored protection, addressing specific concerns HNW individuals may overlook or find challenging to manage during a travel mishap.
Insurance options range from annual term policies to single-trip coverage, so it’s crucial to assess needs in advance to ensure that the policy activates before departure.
Here are nine key coverages HNW individuals should secure before traveling:
- Concierge services. Luxury plans often provide personalized services that can assist in arranging various aspects of the trip, adding convenience for HNW travelers.
- 24-hour assistance services. Offers round-the-clock support before, during and after the trip to manage any issues that arise.
- Trip cancellation. Reimburses up to 100% of prepaid, non-refundable expenses if the trip is canceled for a covered reason.
- Worldwide liability coverage. Extends liability protection internationally, covering individuals against loss or damage wherever they travel.
- Sports and activities coverage. Extends medical coverage for adventure sports like hiking, skiing and mountain biking, which carry unique risks.
- Emergency medical coverage. Protects against unforeseen medical expenses. Travelers in remote areas should aim for at least $100,000 in coverage.
- Medical evacuation insurance. Covers the cost of emergency evacuation. For trips to remote locations, at least $250,000 in coverage is recommended to handle emergencies.
- Kidnap and ransom coverage. Includes hostage recovery, security services and protection programs. Some insurers also offer pre-travel awareness training and tracking services for enhanced safety.
- Political evacuation coverage. Provides assistance in the event of political instability, armed conflict or personal threats, ensuring safe transport to a secure location.
Securing these coverages helps ensure HNW clients can travel with peace of mind, knowing they are protected against a range of potential risks.
Common Misconceptions
One common misconception is that credit card trip protection can fully replace travel insurance. While credit cards may cover basic travel disruptions, they often provide insufficient medical coverage for international trips, and their trip cancellation benefits are typically limited.
Additionally, most travel insurance policies limit reimbursements for lost, damaged or stolen personal items. Expensive jewelry, luxury goods and other valuables should be insured separately to ensure full coverage.
Another point to consider is that many cancellation policies have benefit limits, which can be an issue for travelers with costly trips. For greater flexibility, HNW travelers can opt for Cancel For Any Reason coverage, which offers partial reimbursement if they cancel for reasons not covered by their standard policy.
Explore with Confidence
Preparation is paramount. By securing the right insurance policies and having a solid plan, your HNW clients can turn their next “coolcation” into an unforgettable experience with peace of mind knowing they’re protected.
Robb Lanham is Chief Sales Officer at Hub Private Client
