Why travel insurance is a must for seniors

Travel insurance can be a huge help to anyone, especially older travelers who may have a greater risk of health issues or unexpected travel disruptions and greater concerns about protecting their finances.

CNBC Select explores why travel insurance is so important for seniors and the policies to consider if you're over 65.

Whether you have private insurance or Medicare, your U.S. health care plan probably isn't valid abroad. That's where your travel insurance policy's medical coverage is invaluable. It will cover the cost of doctor's visits, hospital stays, prescriptions and more.

If you need to be flown somewhere for treatment or get back home, a good policy will also cover the cost of medical evacuation.

We recommend buying a policy with at least $100,000 in emergency medical coverage and $250,0000 in evacuation coverage. If you're visiting far-flung locales or are particularly concerned about your health, however, look at policies with higher limits.

Travel Insured International has some of the highest limits we've seen. Plans cover up to $250,000 in emergency medical expenses and $1 million for evacuation or repatriation.

A standard travel insurance policy won't cover pre-existing conditions if they force you to change your plans or seek medical treatment.

A pre-existing condition is any injury, illness or chronic condition that requires treatment or medication, including diabetes, arthritis, cardiac disease or COPD. If you file a claim, your provider will typically look back 60 to 180 days before you enrolled to see if there were any changes in your medical status.

You can get a pre-existing condition waiver, however, which prevents your insurer from reviewing your records when processing a claim. Many companies offer waivers but require travelers to be medically able to travel and to buy their policy within two weeks of booking.

We like Nationwide for its more generous 21-day window in which you can buy coverage and still receive a waiver.

Even if you don't have a medical issue on your trip, you might have to cancel your plans because of a health condition, death in the family or other emergency.

Trip cancellation and interruption coverage are among the best reasons to get travel insurance. A comprehensive plan will reimburse up to 100% of your nonrefundable costs if you need to cancel and up to 150% if you need to cut your trip short.

Read your policy's terms to see what events are covered, but common scenarios include:

• You or a traveling companion is sick or injured 
• A family member is hospitalized or has died
• You get a new job, are laid off relocation or layoff
• Divorce or separation
• Serious damage to your house

If you're concerned about your situation being covered or don't want to have to submit proof, a Cancel For Any Reason (CFAR) policy will refund a portion of your expenses, regardless of why you scraped your plans.

Most CFAR plans limit you to 50% to 75% of your nonrefundable costs, but Allianz reimburses 80% of expenses.

Cruises are particularly popular with retirees, who enjoy the convenience, entertainment and relaxing atmosphere, and have the funds and free time to devote to an extended excursion.

Viking, Holland America and Cunard all market cruises aimed at older travelers.

Cruises come with specific risks, though, including the ship breaking down or you missing your connection. We love Seven Corners' cruise insurance policies, which include up to $250 a day for missed connections, $5,000 for an itinerary change and $250 each time the ship is disabled or misses a port of call.

Plus, Seven Corners gives you 20 days to buy a policy with a pre-existing condition waiver and covers travelers up to age 99.

Many travel insurance companies put age restrictions on their policies, limiting coverage to travelers under 79 or even 65. The cost of a policy can also be much more expensive for older travelers.

Seven Corners will approve coverage for travelers up to age 99 and Faye and Travelex don't have any age restrictions at all.

Travel insurance averages between 4% and 10% of your total nonrefundable trip expenses. Because of increased risk, seniors pay on the higher end of that range.

CNBC Select gathered rate quotes for a 65-year-old traveler and a 30-year-old traveler taking the same one-week $3,000 excursion to London and looking for $250,000 in medical coverage and $1 million in evacuation coverage. While the 30-year-old's rate was about 4.4% of their nonrefundable trip expenses, the 65-year-old was quoted a rate of about 7.3%.

There can be a significant difference in price among carriers, so using a travel insurance marketplace like Squaremouth can help you compare rates in minutes.

• Best for high medical coverage limits: Travel Insured International
• Best for pre-existing conditions: Nationwide
• Best Cancel For Any Reason policy: Allianz
• Best cruise insurance: Seven Corners
• Best for no age restrictions: Faye
• Best for comparing rates: Squaremouth

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.

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