'Coolcations' are hot for HNW clients but carry special risks

With accelerating climate warming comes the desire to beat the heat for anyone who can afford to do so. For high net worth individuals, the trend is to head north — not south — to destination spots like Whistler, British Columbia; Greenland; Iceland; and even Antarctica. Those and other chilly spots have become popular all year round, and such holidays often include an adventure element. 

But this new trend, dubbed "coolcations," carries particular risks for wealthy travelers. 

Take Greenland, where popular summer activities include diving among the whales and icebergs and stand-up paddleboarding in the Arctic waters — all of which comes with the attendant risk of physical injury.  

As a financial planner, it is your responsibility to make sure your HNW clients are covered if things go south when they head north. Advise them to speak with their insurance broker and arrange protection for any setbacks that could occur and to ensure that their coverage extends worldwide. The right plan will include contingencies specific to wealthy vacationers; below are examples of coverage that could apply. 

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Types of coverage wealthy travelers should consider

Emergency medical coverage protects against unforeseen medical expenses. Those traveling to remote locations should obtain at least $100,000 coverage.  

Medical evacuation insurance covers the cost of an emergency evacuation. The coverage provides transportation to the nearest medical facility — whether that's within the country or if transportation out of the country is required. When traveling internationally, purchasing $1 million of medical evacuation coverage is appropriate. 

Trip cancellation coverage reimburses up to 100% of prepaid, nonrefundable trip costs, if an individual needs to cancel for a covered reason.

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

Political evacuation coverage provides resources in the case of political unrest, armed conflict or personal threats. It can also cover predetermined contingency plans to transport travelers to a safe haven.

Kidnap and ransom (K&R) coverage includes hostage recovery services, security detail and protection programs. Some insurers also offer awareness training for high-risk people prior to traveling; others can track HNW travelers' movements to help keep them safe. 

Bonus tips on travel insurance

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

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Additionally, most travel insurance policies limit how much can be reimbursed for lost, damaged or stolen personal items, so expensive jewelry, luxury goods 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 high-cost trips. For added cancellation flexibility, travelers can add "cancel for any reason" to their policy, which provides partial reimbursement if a traveler cancels for a reason not listed in their policy. 

Finally, note that it's critical for those traveling internationally to address coverage needs beforehand to ensure the policy takes effect before they depart. 

Preparation is key. The right policies and a plan of action can make your client's next coolcation the trip of a lifetime.