Pet savings account vs. pet insurance

Question:

Would I be better off with a pet savings account instead of purchasing pet insurance for my pets?

Answer:

That would depend upon how lucky your pet is, how diligent a saver you are, whether you spend any accumulated savings on other things and at what point your pet becomes ill or injured in your savings cycle. You can improve the odds if you have put away or have access to $5,000 or more for your pet from the start. Although something can happen to your pet that would cost in excess of $5,000 or multiple events could happen in a short time that far exceed $5,000, the odds are low. If you have at least $5,000 set aside you could afford most, but not all, care–especially if your pet sustains a severe injury or illness.

Simply put, insurance is a method that allows you to pay an affordable monthly amount in order to have the financial means to provide the best care for your pet if they become ill or injured in the future. Your pet may have one or several costly events where your monthly premium becomes a wise and prudent decision. Conversely, your pet may have no medical events and you would not receive return for your premium–aside from peace of mind.

Insurance is not purchased as an investment, it is purchased for financial protection and risk sharing for events you either cannot afford or would be a financial burden that could alter your decision for your pet’s care. Insurance is also purchased for peace of mind that it will provide coverage for multiple unforeseen events. I have reviewed thousands of pet claims, some within days or weeks of being insured, others years later that exceeded the pet owner’s financial ability at the time. The insurance was literally a life saver for that pet and owner.

Several of my own pets have had no claims for years. A couple have had multiple minor claims, such as ear infections, abscessed teeth, non-specific enteritis, bladder infections and other non life-threatening conditions. The cost was in the hundreds of dollars and although not budgeted, it was affordable. However one pet, Obie, over a four year period had three gastric torsions (bloat) that required emergency surgery each time. Later, he even developed bone cancer. His insurance reimbursements in excess of $12,000 paid for the other seven dogs’ premiums for years. Another pet, Skeeter, had cataracts that ended up costing $2,000. The bottom line is, since insurance is purchased for future, unknown events, you never know when or if you’ll need it.

Unless you have a pet savings account that totals between $5,000 and $10,000 you might want to consider purchasing pet health insurance. A good compromise and combination is could be doing a little bit of both. That way, you can save around $1,000 for your pet in a savings account and also purchase a pet insurance plan with a high deductible. This way, you would have lower monthly premiums (monthly payments) and enough funds to leverage your $1,000 savings into over $5,000 in care if the pet insurance pays 80% (like Pets Best Insurance does.) With pet insurance you will not have to alter your lifestyle and budget should your pet become ill or injured.