Hi - as you are individually insured (ie it is not the holiday that is insured) any loss by either of you should be claimed on your own individual insurances.

If you can't or don't want to travel due to a party member becoming ill then you can still usually claim for cancellation of holiday as long as you have some proof of the situation (ie Doctor's note). alternatively it could be worth checking if the insurance would pay for a change to dates and/or names instead of full cancellation.

As for all having to cancel, if you still wanted to make the trip; then this does not need to happen - as long as you inform the various companies involved in your holiday that a person will be missing- lead names are generally a requirement for invoicing and payment issues rather than travel. I'm sure you will only need to supply a new lead name in this case.

As for visas - these apply to individuals not parties - so I don't see why this would stop you travelling.

If in doubt about any insurance situation I would recommend that you ring your insurance company - I'm sure they would be happy to answer your questions and then you would have peace of mind over any given situation.