A couple of weeks ago, my travel insurance (with World Nomads) ran out, and so I decided to renew my insurance, using per-unit costs to find the cheapest and most cost-effective plan.
Using per-unit costs when comparing products – be it canned fruit, bags of pasta, or travel insurance, will save you money. If you don’t compare products with per-unit costs, you will waste money that could be put towards a more enjoyable trip or vacation!
To use per-unit cost, I took a look at World Nomads‘ pricing charts (for a US citizen from New York), which shows price for different travel times, and calculated the effective per-unit (per-month) cost. This tool is especially useful if you don’t know how long you’re traveling for, and want to buy insurance “as you go”
| Duration | Standard price | “Explorer” price | Standard per-month cost | “Explorer” per-month cost |
| 1 week | $49 | $65 | $196 | $259 |
| 2 weeks | $69 | $91 | $138 | $183 |
| 3 weeks | $85 | $115 | $113 | $153 |
| 4 weeks | $100 | $140 | $100 | $140 |
| 5 weeks | $114 | $157 | $91 | $126 |
| 6 weeks | $129 | $184 | $86 | $122 |
| 7 weeks | $146 | $208 | $83 | $119 |
| 2 months | $154 | $211 | $77 | $106 |
| 3 months | $187 | $250 | $62 | $83 |
| 4 months | $216 | $287 | $54 | $72 |
| 5 months | $253 | $335 | $51 | $67 |
| 6 months | $291 | $386 | $49 | $64 |
| 7 months | $384 | $509 | $55 | $73 |
| 8 months | $490 | $649 | $61 | $81 |
| 9 months | $596 | $791 | $66 | $88 |
| 10 months | $701 | $931 | $70 | $93 |
| 11 months | $807 | $1,071 | $73 | $97 |
| 12 months | $913 | $1,212 | $76 | $101 |
As you can see, if you buy very short-term travel insurance, you are paying a significant premium – insurance for a week will effectively cost you $200 per month! However, as you buy insurance for longer trips, the per-unit cost drops, down to $50 per month.
But then a curious thing happens: for trips of more than 7 months, per-unit costs increase! This makes no sense! Instead of buying 12 months of insurance for $913, you could buy two 6 month blocks of insurance for $291 + $291 = $582 — for a savings of more than $300!
Using this chart, the results of a per-unit cost analysis, I chose to buy 4 months of travel insurance. Yes, I could get even cheaper per-month insurance by buying a longer duration, but I don’t know how much longer I’ll be traveling.
In the end, even if you save a lot of money by using per-unit costs to buy something cheaply and efficiently, it’s still wasted money if you never use it.