When you"re fantasizing about lying on a tropical beach drinking margaritas, there"s no bigger buzz kill than thinking about everything that could ruin your vacation. But deciding if you need travel insurance often means considering the worst-case scenario and whether or not you can afford the consequences.

First, make sure you know what penalties and fees you"d have to pay airlines, hotels, and tour companies if you canceled your trip at the last minute. It"s also a good idea to scour your credit card policies and regular health and homeowners" insurance to see what they cover. "The most frequent mistake people make is assuming they are covered elsewhere," says Brad Finkle, president of the U. S. Travel Insurance Association.

Answer the following questions to help evaluate if travel insurance is a good choice for you:

Do I need TCI?

If you answer "yes" to any of the following questions, you may want to consider buying travel insurance:

If you are booking a trip (airfare, hotel, and/or accommodations) far in advance, will you face penalties or total forfeiture of your payment if you cancel or interrupt the trip?

Are you likely to cancel because a child or close relative gets sick?

Have you booked a vacation rental that charges you a cancellation penalty?

Are you traveling to an area where bad weather is likely to throw a wrench in your plans?

Is there a chance you could get called to military duty before your trip departs?

Do I need medical travel insurance?

If you answer "no" to any of the following questions, you may want to consider extra medical coverage for your vacation:

If you are traveling to another country, does your personal medical insurance cover you?

Does your medical insurance cover emergency evacuation due to illness or an accident?

If you are traveling to a remote area or developing nation, will your health insurance provider help you find good medical care and an English-speaking doctor?

If you participate in high-risk activities on your vacation, such as skiing, surfing, or mountain climbing, will your regular health insurance cover you?

If you are going on a cruise, does your medical insurance cover you in international waters?

If you have an accident in a rental car, will you or someone you injure be covered by your existing car insurance?