Friday, August 16, 2013

Five Things You Should Know About Pet Insurance for Your Dog

This will be a short, but important, article if you are thinking about buying pet insurance. We'll hit the highlights of some of the most important considerations you need to take into account when making a decision whether to purchase pet insurance or not. So let's get going and look at five major areas you should consider regarding pet health insurance.

1. What is Pet Insurance For?
If you are not careful, you'll price yourself right out of the market by trying to insure too much. Pet medical insurance becomes pretty expensive if you try to insure all the little things that you could afford to pay out of your pocket. The real purpose of pet health insurance is to protect you from the catastrophic veterinary bills that could result from your pet being seriously injured or getting a serious illness. It can cost over $2,000 to repair a fracture if you dog is hit by a car. That's the kind of thing you need pet insurance for, not for the routine visit to the vet.

2. Why Do You Need Pet Health Insurance?
I'll give your three good reasons:
  • It keeps you from having to decide on treatment for your pet under stress. If your pet is suddenly injured or falls seriously ill, you don't want to be confronted with having to decide on the treatment your pet gets based upon what you can afford.
  • Veterinary treatments are becoming more and more sophisticated and remarkable things can be done to save your pet from serious illness or injury. It's no surprise, however, that the cost of these treatments is skyrocketing. Again, pet medical insurance is a hedge against staggering costs of veterinary care for you pet which you might not otherwise be able to afford. A simple fracture could cost you $2,000 to $3,000. Could you afford that financial surprise if your pet were suddenly injured?
  • Your pet will not time his medical emergency to suit your financial circumstances. It will arise unexpectedly - perhaps at a time when you are under financial strain from other causes. There's peace of mind in knowing you won't be caught unprepared for such an unexpected emergency.

3. How are Pet Health Insurance Premiums Calculated? 
Your pet medical insurance premiums will be based upon risk factors that affect the likelihood of your pet needing treatment, and how much the anticipated treatment is expected to cost. These are the most common risk factors:
  • Your location
  • Whether your pet is a cat or a dog
  • The breed of your pet
  • Your pet's sex
  • The age of your pet
  • Whether your pet has been spayed or neutered

4. What Should You Know About the Proposed Policy? 
Here's the short list:
  • Does it cover "pre-existing conditions?" Most affordable pet health insurance policies do not, and you probably shouldn't try to get pre-existing condition coverage. It's not financially feasible in most cases. But, there is an important "Catch 22" for you to be aware of. Some companies consider each renewal of your pet's medical insurance policy as a new application. Therefore, if your pet develops a medical problem this year, it may only be covered for the balance of the current policy year. When you re-apply on the renewal date, the insurance company could consider this new condition a "pre-existing" condition for the new policy being issued. Ouch! Buyer beware.
  • How does it handle "chronic conditions?" If your pet develops a chronic condition such as arthritis, diabetes, or Addison's Disease, how will your pet insurance policy provide coverage. As mentioned, many policies will exclude coverage beginning in the next policy year based upon the pre-existing condition limitation. It's also common for policies to have a benefit limitation which caps the amount the company will pay for a single condition over the life of the policy.
  • What are "payout limits?" Payout limits are the maximums your company will pay under the pet insurance policy. The common payout limits are: lifetime limits (the max the company will pay over the lifetime of the policy); annual maximum (the max your company will pay during any one policy year); per incident limit (the max the company will pay for any one injury or illness).
  • What is the "waiting period?" Most policies have a waiting period following issuance of the pet health insurance policy during which there is no coverage. This is designed to prevent people from purchasing a pet medical insurance policy just for the purpose of making an immediate claim.

5. How Can You Keep Your Premiums Cost Effective?
Here are the bare bones tips:
  • Choose as high a deductible as is reasonable for your financial circumstances. Only insure those costs you could not reasonably afford to pay out of your pocket.
  • Similarly, choose a higher co-pay, which is the amount of each treatment you pay out of pocket.
  • Take advantage of any discounts for which you are eligible, such as multiple pets and microchipped dogs.
  • Choose a lower annual maximum (see above).
  • Pay your premium annually instead of monthly. Most pet health insurers have lower annual premiums than monthly premiums.
  • Do not attempt to insure "routine care" as discussed above. The purpose of pet health insurance is to protect you from catastrophic pet medical expenses.

Veterinary bills have risen over 70% in the last five years, to over $19 billion per year! It's no wonder pet health insurance is becoming such a hot topic. But just as with human medical insurance, there are numerous policy options available, and some major pitfalls to be avoided. Any pet owner considering the purchase of pet health insurance is well advised to take time to educate himself or herself about the various policy options available before making a purchasing decision. The information provided above covers many of the basics and should serve as an excellent primer on the subject for those considering insuring their pet's health.

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