Pet Insurance: Yes or No?

Question

First  let me start off by saying that this thread is for those animal lovers  that have pets and consider those pets to be a part of their family.  I  don't really need to hear from the cold-hearted, non-animal loving  people that will say horrible things like, "Who cares?  It's just a  dog."  Those people can stop reading now and move on.

I've  been thinking a lot lately about whether or not to continue with the  pet insurance I currently have for my dog.  The policy I have covers  accidents and illnesses:  $100 annual deductible, 90% reimbursement, no  cap, chronic conditions covered, routine items that aren't  accident/illness not covered.  Currently, the premium is about  $43.72/month or almost $525/year.  Premiums have, and likely will  continue to, go up to keep up with costs of veterinary care.

Initially,    I got the policy so that I would never have to make a decision  between my wallet and my dog.  Let's say I was faced with a decision of,  "Well, it'll cost $2,500 for the procedure but he'll only have about 6  more months."  It's not about whether or not I can afford the out of  pocket cost (for many people, this is a major factor for them in  purchasing the insurance; luckily, for me, this isn't an issue) but more  about having to make that difficult decision.  I would do anything for  my dog, like most pet owners, but this isn't a situation I want to find  myself in.  For this reason, I convinced myself that pet insurance was  the way to go.  The more I think about it, however, it seems that I may  be better off by self-insuring and instead of paying the monthly  premiums, just put those funds into a liquid savings account.  If he  stays healthy, I didn't "waste" money on premiums.  If he doesn't, the  funds are set aside.  If he gets sick/has accident right after I cancel  the policy (if I do) and funds aren't built up yet, I can still afford  it.  It just kills me to think of paying $5,000 in premiums (probably  more as costs go up) over a 10 year period for something I may never use  (or not use as much as I paid in).  On the flip side, I've been reading  a lot of articles about veterinary technology advances and how many  things can be done these days, but they come with a corresponding price  tag.

I feel like if I'm going to cancel the policy, I  should do so now while he's young and healthy instead of waiting until  he's older and premiums are much higher (when I'll likely end up having a  better chance of using the policy at that time).  Ultimately, it's a  personal choice.  I'm just wondering how intelligent minds would  approach the issue and what those animal lovers have done/are doing with  your pets.

I look forward to hearing everyone's feedback.  Thanks.

Dana Walker · Answer

Interesting thread here to say the least but I wanted to chime in.  Pet insurance worked great for me. I rescued a dog missing an eye and issues in the remaining eye. It made sense to me because I felt like anytime there was any issue with the remaining eye, I wanted it tended to by a professional.  As the dog aged it paid off for me for plenty of other reasons.

I doubt I would go down the same path with a young and healthy pet but would consider it again as the pet was older than lets say, 5 or 6, or had some health issues.

Nicholas W. · Answer

I'm in the same boat as you. My premiums are similar and I have a German Shepherd. Part of the motivation for me was the common issues German Shepherds have with hip dysplasia (which is covered by my particular insurer.) Although I could choose to self insure as I can afford a $10,000 vet bill but, like you, I don't ever want to have to put a price his life. The fact of the matter is if I was faced with thousands of dollars for another year it would be a very difficult decision that I don't ever want to make. Another thing to consider is that you are usually a few thousand deep in tests before finding out that a given procedure is too costly when considering the success rate. I too have considered canceling the policy but I view it like any other insurance, you're paying for peace of mind.

Mark S. · Answer

@Patsy Waldron, thanks for sharing.  I had pet insurance for my previous dog and he ran into a whole host of issues, so I've definitely seen the positives from it.  On the flip side, paying the premiums each months has felt "wasteful" for the past couple of years.  Since it's an accident and illness policy only (nothing preventive covered), as long as he's healthy, I don't get any use out of it.  It might be different, to @Colleen F. 's point, if it did cover some preventive care and I was just paying a tad "extra" for the just in case scenario.  @James Triano, yes I could do a higher deductible and lower the premium, but only slightly (like $10/month - but deductible would jump from $100 to $500).  I've actually set up an auto-savings feature on one of my accounts starting in the new year to put $100/month aside into "his" account - just over double the monthly premium I'm paying now.  If something comes up before funds have accumulated, I can take money from other places.  Really is a tough call, because with my luck, the second I cancel the policy is when he'll get sick / have an accident.  I've done the math based on my time with them so far and I've paid over $1,200 in premiums and only got reimbursed just over $300 in claims.  Hindsight is always 20/20, but I'd be about $900 "to the good" if I self-insured (at least up until this point).  If I knew the premium would be locked in, that'd be one thing, but it's gone up twice since I've had the policy in the past 2.5 years.  Anyway, thank you all for your thoughts.  Interested to see if any others chime in.  Happy holidays.

Colleen F. · Answer

It depends does it include routine care that you would otherwise still have to pay for? My brother got something along this line and he was happy because he did the calculations and it made sense.  He was paying about 250/ yr extra for the just in case scenario over his regular vet bills.

If it is just for extras then you need to know your end of life philosophy on pets. If you are someone who will do chemo and everything else if your pet gets sick then it may make sense to buy a policy.

James Triano · Answer

@Mark S.

There is no difference to me, and to some others I know, between your pets and other members of your family - they're usually just as much apart of the family dynamic as anyone else.

However, this question is just like any other insurance question, one where you're trying to balance potential out of pocket costs vs. monthly premiums.  The idea of insurance is to protect you from a catastrophic financial event - one that could push you into bankruptcy.  I've seen vet bills pile up on folks and it's no different from having a disease or medical problem yourself.  It can be very expensive.

It sounds to me like you've got the money to prepare to pay some very high cost medical issues should they arise.  Is there a way you can do a higher deductible plan with your pet insurer?  This would decrease your premiums but still allow coverage for, let's say, a $10,000 event or something.  It's the same with car insurance - I've personally pushed my deductible as high as possible over time because my liquidity has gone up.  I certainly don't think pet insurance is a bad idea but if you have the financial ability to self insure or use a much higher deductible plan, then it makes more financial sense to do so.

Patsy Waldron · Answer

Mark- I am a fellow pet lover and mom to two Lhasas (both rescues- another one of my passionate causes!)

I wrestled with the same question and decided to forgo pet insurance, as I couldn't reconcile myself to paying month after month and only using a fraction of my premiums every year in routine care. I have had one baby for almost 10 years, and only this year did I have a non-routine vet bill (excision of 2 cysts, removal of 1 lipoma, several tooth extractions, laser treatment for arthritis). Total cost was just under $2,000. Furbaby #2, which I have had for almost 9 years, got an ulcer in his eye this past spring and we got a graft ($2,200) which didn't "take," so then we had the eye removed ($1,250). As you can see, my total cost for all these surgeries was a fraction of what I would have paid in premiums over the years!

The flip side is that I take excellent care of my dogs. They eat premium raw food, get exercise everyday and regular preventive care.

On the other hand.... My sister chose to get pet insurance for her dogs, and she is grateful she did. She's had no end of health issues with her dogs, and having insurance cover 90% of the endless tests, surgeries and vet's visits has been a real godsend.

I guess it comes down to what you feel comfortable with and whether you will be disciplined enough to save the money from the premiums if you give up pet insurance.

Mark S. · Answer

I'm talking about your PERSONAL pets, not tenants.

Jeff B. · Answer

IMO, this is the wrong question - - it should be Pets vs No Pets.  I love'm too, but they impact the other tenants AND create move-out issues to boot.