Pets often act in such a human-like manner that we forget they aren’t actually our children. Even so, pets are beloved family members in many households. How much you spend on your pets’ healthcare often comes down to your financial priorities, which may or may not justify expenditures for pet insurance. From the perspective of a group of Charleston financial planners, we tend to weigh emotional attachment against the financial costs involved with pet insurance so that you can make the decision that’s right for your furry friend.
Know that Pet Insurance Is, Essentially, Trading Dollars
With pet insurance, you have the option to save now or save later. The major benefit of pet insurance is that it builds in a monthly ‘savings’ to your budget. Just like with normal health insurance, that amount you’ve invested into insurance will eventually pay off in the ability to comfortably afford expensive healthcare for your pet, if needed. If you know you’d commit to even the most expensive procedures for your furry family member, pet insurance essentially allows you to save for it month by month instead of paying all at once.
Conversely, if you’re not at a point in life where an extra monthly payment sounds feasible, pet insurance may not be the right fit for you. However, if anything happens down the road, be prepared to face some sticker shock when treating your pet’s ailments. Deciding which procedures to move forward with for your pet may be all the more difficult to make.
Consider Pet Insurance Premiums
Just like human insurance, pet insurance includes a premium. Monthly premium amounts for pet insurance can range from $10 – $100, depending on your plan. Do note, pet insurance is also dependent on preexisting health conditions, breed, and where you live. To even obtain insurance for her pet, our Charleston financial planner, Laura, was required to submit recent medical bloodwork. The cost of getting bloodwork for her dog, Espy, was almost equal to the cost of her pet’s yearly healthcare. For Laura, it didn’t seem financially justified to spend more on insurance costs than on yearly healthcare for her elderly but fully healthy pet.
If you are considering pet insurance, use actual numbers to weigh the advantages and disadvantages. Consider what you already pay, or expect to pay a year on pet healthcare. Compare that figure to the insurance premiums in addition to the costs associated with just obtaining the plan.
Decide How Much You’re Really Willing to Spend on Your Pet
If a severe accident happens, your pet’s health may be dependent on costly procedures. This is also true if your pet develops a life-threatening condition, like cancer. Whether or not you should pay the potentially expensive costs needed to save your pet’s life comes down to your financial situation and values. Only you know what is worth spending to keep your furry friend well. That’s not to say you don’t love your pet, just that the cost and toll of treatments may not be something you’d consider worth it.
Give yourself a few hypotheticals, and start establishing which lines you know you can’t cross. If, for example, you know that you’d pay for emergencies like car accidents or ingested toys, be sure to consider those potential costs. If you know you’re not willing to go forward with treatments for high mortality illnesses, you have a better gauge of what you can expect to spend.
Think about your financial cap. If you are willing to spend big on your pet’s health, then insurance acts as a guaranteed safety net of savings for you.
Buy At the Right Time
The age of your dog is also a key consideration when deciding if you really need pet insurance. Obviously, older dogs are expected to have more serious health complications than puppies. Their premiums are also a bit higher. It may be easier to opt-out of life-extending procedures if your dog has already had a very full and very happy life with your family. In that case, pet insurance may not be helping you save much money.
If your dog is still young, pet insurance offers protection throughout its life, especially if your dog breed is known to have complications later in life. Great Danes, for example, historically have hip problems. Their premiums may be higher, but with costly procedures more likely in their future, insurance should still be a serious consideration if you would be willing to pay for that healthcare.
Why MFC’s Financial Planner Decided Not to Buy Pet Insurance
Laura inevitably decided not to move forward with pet insurance, not because she doesn’t love her pet, but because, for her, the numbers didn’t add up. Her pet, while older, is fully healthy with no expectation for severe conditions to develop. The plans she found also didn’t seem comprehensive enough for her to justify the cost, especially since her dog has already lived a very full, long life without complications. “I found that some of them covered different things, I couldn’t find one that covered everything I wanted it to do.” From her experience, pet owners should definitely do their research for a plan that encompasses all they want before investing.
We asked Laura if she had any regrets. She said so far, nothing costly has really happened to her dog. Despite her age, she is very healthy. After doing the math, the monthly payments couldn’t be justified. Laura did clarify that “I would regret it if something major, like cancer, happened to my dog. But so far, I think I made the right decision.”
Whether you’re deciding how to best invest in your pet’s health or your own retirement fund, our Charleston financial planners are here to help. Our mission is to enable you, and those you love, live life to the fullest with responsible financial planning. Contact our financial planners today to begin your journey to financial freedom.
The opinions expressed herein are those of Morris Financial Concepts, Inc. (“MFC”) and are subject to change without notice. This material is for informational purposes only and should not be considered investment advice. MFC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about MFC including our investment strategies, fees, and objectives can be found in our ADV Part 2, which is available upon request. MFC-20-19