Without insurance, you will lose all or most of your money if you cancel your trip or have to cut it short, regardless of the reason. Default insurance covers you if your tour operator, airline, or cruise line goes out of business. Trip-delay covers unforeseen expenses that you may incur due to bad weather or mechanical delays. Study the fine print when comparing policies.

For overseas travel, one of the most important components of travel insurance is its medical coverage. Supplemental health insurance will pick up the cost of your medical bills should you get sick or injured while traveling.

U.S. residents should note that Medicare generally does not cover health-care costs outside the United States, nor do many privately issued policies.

Residents of the United Kingdom can buy an annual travel-insurance policy valid for most vacations taken during the year in which the coverage is purchased.

If you are pregnant or have a pre-existing condition, make sure you're covered.

Always buy travel insurance directly from an insurance company or agent; if you buy it from a cruise line, airline, or tour operator that goes out of business, you probably will not be covered for the agency or operator's default, a major risk. Before you make any purchase, review your existing health and homeowner's policies to find out whether they cover expenses incurred while traveling