In many countries, there is more money to be made in selling travel insurance than the holiday itself. One usually aims to save money on holiday packages and flights and neglects travel insurance, which turns out to be a pricier affair.
The first question to ask is whether you need insurance at all. It is not a mandatory feature in tours. And mostly, airlines and hotels offer their own insurance with the purchases you make with them. You might not need additional insurance unless you are visiting a place that is facing particular problem, like natural disasters or political imbalance.
If you are buying a pretty cheap airline ticket, there is really no point of getting insurance for that. Because even if there was an untoward event, the payback would be very little and it would not really compensate you for anything. Also, check the luggage clause in you policy. Some of them cover only single items. You can do without this kind of policy.
There are different kinds of travel insurances that give you a good deal. Some of them are:
1) Family Insurance: insuring an entire family or several couples works out cheaper than buying a per person policy.
2) Insurance for people over 65: though generally, the trend is to charge elders more but there are some companies that offer discount for the sake of competition.
3) Backpacker/ Gap Year Travel/Long-stay Insurance: these policies are exclusive and have features that regular policies do not. They offer you cover up to two years; this is for travellers who are on a long trip. This also good for you if you are on short term job or study plan. Many backpackers use this, those who are travelling through Europe or the US. Also holds good if you need to attempt your exam more than once.
4) Annual multi trip insurance: if you are planning to travel many times in the same year, you can take out this policy as a one-time and save.
5) Winter sports insurance: if you are visiting a place only for the sports they offer, then this one is for you. There are many towns in the US and Europe that are known for snowboarding and skiing. This will cover equipment, search and rescues, etc.
Sometimes, travel agents are the not the only people who can get you a good deal with insurance. Credit card companies also help you. They tend to have tie-ups with different companies, insurance being one of them. Call up your bank and find out what offers they have at hand.
Try and find airlines that sell refundable tickets. If there are any flight cancellations to technical hassles, you will be entitled to at least some amount of refund. If your tickets are non-refundable, delays will be your responsibilities alone.
If you are going to Europe and are in need of health insurance, its best to get a Europe Health Insurance Card (EHIC). This will get you cheap health insurance, plus you might get some free treatment. You might be asked to pay the entire amount of the bill and the claim for a refund. This policy comes free and is valid for five years. It covers chronic diseases as well as pre-existing conditions. It is one of the most useful things you will need for a cheap trip.
Carry out adequate research before you purchase anything and remember the cheapest is not always the best.