I had two clients in the past week bring up pet insurance when we were discussing a medical workup to diagnose and treat their seriously ill pets. Let's face it, when a pet gets a serious / major illness, it can potentially cost thousands of dollars to figure out what's wrong and then treat it - hopefully with a good outcome.
These are the two statements I heard:
"I had pet insurance for both my dogs for several years, but the premium got so high that I had to drop it, so I don't have coverage anymore to help with this."
"I don't have insurance. I looked into it once and it costs too much."
Both of these pets are older pets that have developed a likely chronic condition that is now pre-existing. Although even young pets can develop chronic conditons where the pet owner is faced with lifelong treatment (e.g. allergies), as a pet gets older he or she will inevitably develop one or more chronic conditions that will be costly to treat. With treatment, these pets can sometimes live several more years with a good quality of life.
"My premiums have increased"
Let's take the first scenario where a pet owner has pet insurance and over the years the premium has increased to the point that it exceeds their budget. Instead of dropping the policy, contact the insurance company and talk with them about options to reduce the monthly premium.
- Are you taking full advantage of all the discounts the company offers?
- Consider downgrading your policy. Here you have the option of dropping riders to the policy, decreasing the annual/per-incident maximum, increasing the deductible or copay. Look at this discussion about priorities when custom designing your policy.
Over the years with my own health insurance, I've had to raise my deductible in order to keep the premium affordable. It really comes down to looking at your out-of-pocket costs including the premium to select the best way to downgrade your policy. The Policy Selection Worksheet is an ideal tool to use for this.
For example, perhaps your pet is already being treated for one or more chronic conditions and you know what the cost of the treatment and monitoring (testing) will likely be based on the past year. Plugging these costs into your calculations can help you decide which scenario is best for your unique situation.
A reader of my blog recently contacted me when his premium increased 30% for his 13 year old dog. He downgraded his policy maximum by a couple of thousand dollars annually, but when he looked at also increasing his copay (he currently has a 0% copay), the premium difference between 0% copay and 10% copay was about $12 a month. His dog has a chronic condition that requires a medication that costs $18 a month. The dog also has a couple other chronic conditions that requires periodic exams, testing, etc. So, downgrading the copay didn't make economic sense based on what he expected to spend during the next policy year.
"I can't afford pet insurance"
Perhaps you've heard this statement, "I can't afford to have health insurance." To which someone replies, "You can't afford not to have health insurance."
Because virtually all the pet insurance companies now allow you choices of maximums, deductibles and copays, you can almost always custom design a policy to fit your budget and still be covered in the case of a catastrophic illness should it strike your pet.
First, detemine how much you can afford out-of-pocket should you be faced with a large bill of $5,000, $10,000 or even higher. A pet insurance policy is simply a tool used to help you bridge the gap between what you can afford and what your pet needs in the way of medical care.
You'll likely find one or more companies/policies that will do this for you at a monthly premium you can afford. I designed the Pet Insurance Toolkit to help you do this. This Toolkit includes a Company Comparison Worksheet as well as the Policy Selection Worksheet mentioned above.
I encourage you to take a fresh look at pet insurance and I'll be glad to answer any questions you have about pet insurance or using the Pet Insurance Toolkit. You can contact me here.