Pet Insurance: Yes or No?

[Mark S.]

So, I wasn't really sure where to post this (debated on putting it in Personal Finance forum - and if I don't get any responses here, maybe I'll re-post there) but it seems off-topic to me, so I'm trying here.

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.