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Do you really need pet insurance?

Once you add a new pet to the family, is it time to buy insurance for it? We help you decide if and when pet insurance is worth the cost.

I am one of the 44% of Americans who own a dog. I love my little purebred Yorkie, Sir Winston Churchill Coleman, affectionately known as Winnie in our household. I would do almost anything for him (much to the irritation of my wife).

My Yorkie is only five years old, but he came down with cataracts in his right eye, which was surprising because of his young age. I took my beloved fur child to his veterinarian right after the eye became cloudy and was referred to a veterinary ophthalmologist.

Winston was diagnosed with cataracts that, of course, had a complication. My wallet was screaming already.

The doctor needed to conduct additional tests because he had damage to the retina, too. One test, that featured a fancy gold-plated contact lens ,would check Winston’s eyes to see if the retina was still functioning and attached to the wall of his eye.

These tests weren’t inexpensive, to say the least. It cost more than $500 to see if my dog qualified for the $1,000 cataract surgery. These costs were on top of the $100 office visit fee every time we walked through the fake barn door out front. My wallet was officially crying.

Didn’t I have pet insurance?

Even though I’m a die-hard animal lover, and I grew up with dogs in the house, I’m also cheap. I didn’t have pet insurance to help cover Winston’s bills.

The monthly premium for pet insurance is a bill I didn’t want to pay. Winston is young. I rolled the dice that he’d be healthy. And when you consider that, depending on the type of animal and age, comprehensive pet insurance can be as little as $23 per month, I may have lost the bet.

Winston is full of energy, love, and amazing spirit. He’s also now 100% blind in one eye. Those monthly premiums don’t look so bad today with more than $1,500 in doctor bills looming.

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What is pet insurance?

If you’re like most animal owners and lovers, you’ve probably seen advertisements for pet insurance.

This type of insurance acts similarly to car insurance where it reimburses for you unexpected expenses if something happens to the pet and you need to take it to the veterinarian. Having pet insurance can help prevent unexpected vet bills from breaking your bank account or, worse, putting you in debt. A comprehensive plan will help pay for out-of-pocket costs associated with accidents, illnesses or hereditary issues.

When you consider that 53% of Americans have $5,000 or less in emergency savings, and 68% own a pet, the need for pet insurance becomes apparent.

“We didn’t buy pet insurance for either of our dogs, but we would have come out ahead if we had,” said Mark, husband, father, and owner of two dogs. “Both of our dogs had health issues in their first six months that cost us quite a bit of money. Plan on at least a few hundred dollars a year for annual vet visits per animal and $30 or so a month for meds. If pet insurance would cost you less per year and can cover those expenses, then it might be worth it.”

How does pet insurance work?

Transactionally, pet insurance is much more similar to car or homeowners insurance than it is health insurance because the vet isn’t paid directly. For example, if you have coverage and your pet becomes ill and goes to the vet, you pay for procedures out of your own pocket, Then, you file a claim with your pet insurance company to be reimbursed for the expenses. One of the great things about pet insurance is that it usually covers you for any vet you choose to take your fur-baby to.

It’s also important to know that, just like with any kind of insurance, there can be limitations with pet insurance coverage. Pet insurance comes in a couple varieties — those that cover accidents only or those that offer comprehensive coverage.

Accident-only plans usually cost less than comprehensive ones due to offering a smaller range of protections. But over time, just like with humans, as your pet ages, it’s more likely to have vet visits due to illnesses than freak accidents.

What does pet insurance actually cover?

Most pet insurance companies offer different levels of coverage. Basic policies cover surgical procedures, hospital costs, and other emergencies. More comprehensive coverage includes routine veterinary care, vaccines, and annual exams.

Determining what exactly pet insurance covers can be complicated. Therefore, when choosing a policy, there are many factors to consider, such as reimbursement limitations and deductibles, and you’ll need to choose what kind of vet visits you want covered. For example, many policies will let you add on features that includes wellness visits for things like flea and tick prevention and heartworm. Few will offer comprehensive coverage to pets with incurable pre-existing conditions.

Like with any type of insurance, before adding on endless amounts of covered features, be sure that you’ll use this insurance to the best of its ability so you can get your money’s worth.

Across many insurers, accident-only plans only cover unexpected injuries and emergency procedures needed due to, you guessed it, an accident.

Comprehensive (accident and illness) plans, on the other hand, will often cover costs veterinary and medicine needs associated with:

  • Illnesses
  • Emergency care
  • Accidents
  • Orthopedic conditions
  • Hereditary disorders

According to PolicyGenius, optional wellness coverage can cost an additional $7 – $25 per month. Basic preventative care help cover:

  • Annual checkups
  • Vaccinations
  • Flea & tick control
  • Heartworm medication
  • Teeth & ear cleaning
  • Microchipping

More advanced wellness options will even cover spay and neutering, which could be a good value if you have a young pet.

“We opted for pet insurance coverage that offered far more benefits if something went wrong,” said Campbell, owner of a french bulldog named Moo. “My point of view is that it’s easier to budget for ongoing wellness. But, when they get sick (or even have allergies and need to see a dermatologist), it can be anywhere from $150 to $1200 for vet visits and medication, which can be shocking for your wallet if you don’t have the right coverage in place.”

Campbell also noted that when Moo was a puppy and needed multiple visits for spaying, shots and more, they opted to pay for a puppy wellness plan through their vet, which was $90 per month. It was a much lower price to pay than vet visits in New York City. She stopped paying for the wellness visits after the first year, but because the puppy had a few sicknesses when she was little, they were very glad they paid for that benefit.

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The average cost of pet insurance

The price for pet insurance varies widely based on a number of factors, including your location, type of pet, breed and its common issues, as well as the deductible, coverages, and copays you choose. A policy might cost as little as $10 per month or as much as $80 or more per month.

Like life insurance, the younger and healthier the insured, the more affordable coverage will be. And, as long as you pay your premiums and keep coverage in force, your monthly price stays the same — no matter how old your pet gets or how often you have to file claims.

According to Policygenius, coverage for a healthy five-year-old, purebred Yorkie with no previous medical conditions would be around:

  • $14 per month for accidents only with the ASPCA Pet Health Insurance. The insurer would reimburse 70% of the vet bills for up to $5,000 per year with a $250 deductible. If I wanted to increase the coverage to $10,000, it would be $16 per month.
  • $23 per month for accidents and illness with PetsBest Pet Health Insurance. The insurer would reimburse 70% of vet bills up to $5,000 per year with a $200 deductible. Increasing coverage to $10,000 per year would raise the premium to $30 per month.

With Winston’s health history, though, I’m sure prices would be higher, which is why if you think you’d want pet insurance for your beloved cat or dog, you should purchase a policy sooner rather than later.

Are there alternatives to pet insurance?

Short answer: not really. If your pet winds up with an injury or illness that results in considerable medical bills, you may be able to set up a payment plan with the veterinarian. Additionally, some creditors may offer a veterinary loan, but you should pay close attention to the interest rate, fees, and other terms.

If you’re thinking of skipping out on pet insurance coverage, then make sure you have a significant emergency fund just like you have for other incidentals in your family. Pets become a much-loved member of your household, and many people are willing to spend any amount of money on medical treatments. Yes, that could even mean thousands of dollars.

I’m an advocate for setting aside money in a savings account explicitly earmarked for significant events. Most banks now allow you to nickname your money market funds or savings accounts. You may be less inclined to spend the money on other things when the name of the account is Fluffy’s Vet Bills.

Consider setting aside the amount of money that you would spend on premiums each month. Make the deposits automatic. But, keep in mind, not everyone has the discipline to do so, and $25 per month would not cover a catastrophic event in the first year (maybe two) of owning your pet.

Is pet insurance worth it?

Whether or not to buy pet insurance is a choice many animal lovers are faced with. I hear story after story from friends and coworkers who have pets battling cancer, have blown out their knees or have other health issues (like cataracts).

Most of us love our pets like we love our children. We want the best for them. We don’t want them to suffer, which is when many people find themselves forking over thousands of dollars on treatments, medications, and surgeries to make their pet more comfortable.

Whether to buy a policy has no one-size-fits-all answer. Primarily, you should look at your financial situation — namely your savings and propensity to take on the monetary risk of paying for an emergency procedure — and that should help you decide if the monthly premium is the right choice. Each owner must weigh his or her own options, circumstances and priorities.

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Hank Coleman is the founder and publisher of Money Q&A, a personal finance blog that focuses primarily on investing and retirement planning. Hank has a Masters in Finance from the University of Maryland and holds a Certificate of Personal Financial Planning from Kansas State University.

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About Hank Coleman

Hank Coleman is the founder of several popular personal finance sites such as Own The Dollar, Military Money Might, Money Q&A, and more. He is an entrepreneur and freelance writer specifically focusing on personal finance topics such as savings, investing, retirement planning and insurance. Hank's writing has been featured across a number of sites, including AOL Daily Finance, The Motley FoolFive Cent NickelSeeking Alpha, Military.com, Fox Business, Discover Bank, GoBankingRates.com, and many others. Hank is a finance writer, financial planner and self-proclaimed investing junkie. He has a Masters Degree in Finance and a Graduate Certificate in Financial Planning. Be sure to follow him on Twitter @MoneyQandA and on his blog, Money Q&A.

Read more by Hank Coleman

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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