One bit of advice that I see over and over on the Internet is to open a savings account to help pay for your pet’s healthcare needs, rather than buying pet insurance. The recommendation is to put the money that you would be "wasting" on pet insurance premiums into the savings account, and when you have to go to the vet, the money will be there to pay for the visit.
People who give this advice miss the point of pet insurance. Pet insurance is meant to help you bridge the gap financially when large, unplanned and unexpected expenses occur and you don’t have adequate savings to cover it. You never know when you may be faced with a large, unexpected expense. For example, what if a couple of months into your savings plan, your pet is seriously ill or injured and the bill is $1,500 and you’ve only saved $75? Will your pet wait to get sick until you have enough money saved up?
I think it’s great advice to have a savings account, but not in place of pet insurance. In my opinion, it’s not an either/or proposition, but both. You’ll still have those annual wellness expenses to pay for, and even if you have pet insurance, you’ll still have to pay the deductible, co-pay and any uncovered expenses. Most pet owners will benefit from having a 3-pronged approach to paying for their pet’s healthcare — savings, available credit and pet insurance.
The current model for pet insurance in the United States requires pet owners to pay their veterinarian and then seek reimbursement from the insurance company. Many pet owners pay their veterinarian with a credit card and then promptly file a claim with the insurance company. When the time comes to pay the credit card bill, they should have already received a reimbursement check from the insurance company. We recommend CareCredit to our clients because they offer several no-interest payment plans that work well with pet insurance.
Keep in mind that the best time to start saving, apply for CareCredit, and purchase pet insurance is now — before the unexpected and unplanned happens. When your pet is seriously ill or injured, especially if it is a crisis situation, the last thing you want to be concerned about is how you are going to pay the bill.
People who purchase pet health insurance must understand there will be years when they pay the premium and realize little to no benefit from the policy. This is actually good! That means that your pet remained healthy that year. It is this way with almost any other type of insurance, too.
For example, you may pay $1,000 annually for 30 years for homeowners insurance and realize little or no benefit from it. You may pay $300 a month for several years for auto insurance and not get any benefit out of it. Should this upset you? No! Remember, the purpose of buying insurance is to protect you against catastrophic events that may occur in your life that you aren’t able to financially cover yourself. You should no more buy pet health insurance hoping that your pet will get sick than you’d buy auto insurance hoping you’ll have a accident.
For a real-life example of what I consider a proper attitude and perspective toward pet health insurance and the role it can play, along with savings to help pay your pet’s healthcare expenses, go to my recent blog, Pet Insurance: A Pet’s Perspective, and read my response to Douggie’s comment (#2).
Dr. Doug Kenney