When picking and pricing insurance, think of it this way: If you need an ounce of prevention, don"t pay for a pound. In other words, buy the least expensive insurance plan that covers your needs. While the cost of travel insurance varies depending on age, destination, the length of your trip, and the amount of coverage, you should expect to pay about four to eight percent of the cost of you trip, with prices reaching as much as 13 percent for extremely elderly travelers. There really isn't a set dollar figure; you could pay as little as $15 to insure a $300 plane ticket, or more than $1,000 to insure a $20,000 around-the-world trip.

Shop around before you buy. Several websites, such as insuremytrip.com, quotewright.com, and squaremouth.com, allow you to review policies from different insurance companies. Check there, and then compare these packages to offers from your travel agent or tour company. If you travel abroad more than a couple of times a year, annual medical travel insurance and/or medical evacuation coverage could be more economical than buying policies on a per-trip basis.

Cruise lines and tour operators offer convenient, attractively-priced insurance policies or waivers. But these plans may cover only the tour or cruise company"s own cancellation penalties and often provide a voucher for future travel rather than cash back if you cancel. And all deals are off if the company goes bankrupt before you depart. Most people can find better deals elsewhere.

Some insurance companies now offer "cancel for any reason" policies. Typically purchased close to the time you book your trip, these plans may cover you for reasons that are excluded from other policies, such as a last-minute business conflict or if you simply decide not to go. But buyer beware: These policies still may not guarantee a full refund.