Should You Have Pet Insurance?
IS PET INSURANCE WORTH IT?Pet insurance is definitely worth it if you have a pet from a breed with a predisposition to chronic illnesses. Generally, the younger your pet when you obtain the insurance, the lower the premiums and deductibles will be. Pet insurance can also be a good idea if can’t afford the thousands of dollars that an emergency could potentially cost. It’s a way to avoid the agonies of economic euthanasia, which the New York Times defines as “the necessity of putting a pet down because the owner can’t afford treatment.” Getting insurance for your pet could potentially cost you more than it’s worth if it has a pre-existing condition (most companies don’t cover these), has the above-mentioned predispostion to chronic illness, or is an elderly pet. If you have a house pet that only lives indoors and is generally healthy then you may never need the insurance. When considering which plan to purchase, you’ll want to look at the differences in premiums, deductibles, and coverage. WHAT ARE THE PROS AND CONS OF PET INSURANCE?Pros:
- Peace of mind – insurance virtually guarantees you won’t have to make a life-and-death decision for purely economic reasons
- Emergency care – insurance can defray the expenses
- Long-term health issues – though most companies won’t cover pre-existing conditions, and some may also reset their coverage annually, insurance can make it easier for you to manage the costs of a recurring condition
Cons:
- Cost – pet insurance can get very expensive in terms of premium, especially if you have a multi-pet household. However, this can still make sense per pet, and many companies offer multi-pet discounts.
- Coverage – most pet insurance plans don’t cover regular check-up costs such as preventive health care, dental, or vaccinations
- Pre-existing conditions – pet insurance companies don’t cover pre-existing conditions, so if your pet has an expensive existing condition, you will still have to pay for all the associated treatment yourself
HOW TO CHOOSE THE RIGHT PET INSURANCE: DEDUCTIBLESPet insurance deductibles are the amount of money you have to pay out of pocket before the insurance coverage applies. Just like insurance plans for humans, petcare comes with a wide variety of deductibles, copayments, and premiums. Usually, pet insurance companies require that you pay your pet’s bills upfront and wait for reimbursement, but some companies have programs that pay vets directly. It’s important to remember that a low deductible means premiums will probably be higher, and conversely, if you’re okay with a higher deductible, your premiums will likely be lower. Generally, deductibles can be tracked two different ways:
- Annually – one payment per year, no matter how many incidents your pet may have. This is best if your pet is accident-prone or lives primarily outside, which can expose it to more risky situations.
- Per-Incident – a deductible is applied for each incident that requires veterinary care. For example, if your dog gets hit by a car, and you have a $100 deductible, that’s all you’ll pay at that time, regardless of how many visits the situation requires. Three months later, your dog eats a whole bag of candy and you have to rush him to the vet. That’s a separate incident, and you have to pay your $100 deductible, before your insurance kicks in.
CO-PAYMENTSCo-payments are a percentage of the claim settlement amount that you have to pay each time your pet gets a particular type of health care service. If your plan has this option, this means you’ll pay the co-pay percentage in addition to the deductible. For example, if your dog has to have an emergency procedure which costs $1,000, your deductible is $500, and you have 0% co-pay—you’d pay the $500 deductible, and the insurer would cover the rest. If, however, you had a 10% copay, then you’d pay the $500, and 10% of the remaining $500, for a total of $550. The insurance would cover the remaining $450. HOW DOES REIMBURSEMENT WORK?Most pet insurance companies require that you pay your vet bill upfront, and then they reimburse you according to your coverage, usually between 70-90%. This is the reverse of the copay. It’s important to make sure that the reimbursement is based on your final total costs, and not on the quote that vets generally give you before commencing treatment. Be sure to read the fine print carefully to be sure exactly what is covered and what isn’t. Another thing to watch out for with your plan’s reimbursement is whether they have a ceiling. Some companies are unlimited, whereas others allow you to choose between $5K, $8K, $10K or $15K. A higher ceiling will result in significantly higher premiums, though. PET INSURANCE PREMIUMS EXPLAINEDPet insurance premiums are the amount of money that you’ll pay every month for your pet’s coverage. Insurance companies will look at many factors to determine this, including your pet’s age, breed, size, degree of coverage, and deductible amount. Where you live is also factored in, to account for differences in vet care costs. When considering your monthly premium, if the amount seems a bit high, check if it’s because you’re also paying for extras like wellness coverage or emergency hospital boarding. It’s best not to choose a plan solely based on the lowest or highest price, but to read the fine print carefully and consider exactly what you’d be paying for. If it ends up being more than one or two dollars a day, odds are you’re being charged for things you don’t necessarily need. In the end, it comes down to your budget and a combination of the following factors:
- Your pet’s lifespan
- Number of vet visits
- Number of emergencies
- Insurance coverage
However, purchasing health insurance for your pet can also save you a lot of money and anxiety. Without the security of pet insurance, even a small thing like a limp can make you think more about the health of your bank account than your pet’s wellbeing. GOT QUESTIONS? ASK US. WE CAN HELP WITH THAT!The ARIES Foundation for Financial Education, Inc is nonprofit dedicated to helping everyone have a better relationhsip with their money. Visit us at www.ariesfoundation.org to learn more.