If you have a pet, you know the costs of keeping them healthy can add up quickly. From annual vet visits, to medication to special diets, pet ownership often includes a variety of expenses. Plus, you never know when they may need emergency care, surgery or other expensive treatment.
You may wonder, is pet insurance a smart way to manage these unexpected expenses? Read on for a financial advisor’s perspective on considerations to keep in mind.
No two plans are alike. Like medical insurance for humans, pet insurance is often complex. Shop around and read the fine print to fully understand the coverage offered. In addition to price, consider what’s included and any exceptions that might limit the value of the plan. Be aware that some plans cover only accidents and illness, leaving you to pay for wellness visits out of pocket.
options. Pet insurance plans typically reimburse policyholders one of two ways. With a percentage-based reimbursement plan, you get back a portion of what you pay for medical care for your pet. With a benefit plan, you receive a set amount back based on the particular condition being treated. Both types of plans require the pet owner to pay the provider before submitting claims for reimbursement.
deductibles. Some pet policies impose per-incident deductions rather than an annual deductible. Run the numbers to determine whether this is a cost-effective approach or too costly to be a good value.
Not just for cats and dogs. Don’t despair if your beloved pet is a snake, rabbit or other less common domestic creature. You should be able to find at least one pet insurance company that will cover your animal.
Consider your limits. What you would do if the cost of your pet’s care ran into the thousands of dollars? Most pet insurance policies offer predicable fixed costs in exchange for a safety net if medical costs increase rapidly each year. If you have ample resources, you might be comfortable with the off chance your pet racks up a big vet bill.
Savings might do the trick. As an alternative to pet insurance, you might consider creating your own pet care emergency fund. Set aside a lump sum or grow a savings account monthly instead of paying a monthly premium. With this approach, if your pet’s medical needs don’t eat up the money you’ve set aside, the savings will remain available to you.
Jeff Jolly, CFP, is a Private Wealth Advisor and Sr. Vice President with Ameriprise Financial Services, Inc. in North Haven. He specializes in fee-based financial planning and asset management strategies and has been in practice for 15 years. To contact him, call 203-407-8188 ext. 330, or visit his office at 250 State St. Unit E1.