Welcome to BW’s Smart Money podcast, where we answer your real-world money questions. In this episode, learn to navigate pet insurance options, costs, and smart budgeting strategies for your pet’s health care. Is pet insurance worth it? How can pet owners afford the rising costs of veterinary care? Hosts Sean Pyles and Ronita Choudhuri-Wade discuss the ins and outs of pet insurance and various budgeting strategies to help you manage pet care expenses effectively. They begin with a discussion of the importance of pet insurance amidst escalating vet bills, with tips and tricks on the potential financial benefits of pet insurance, the low adoption rate of pet insurance in the US, and interesting trivia like the first US pet insurance policy issued for Lassie. Then, BW pet insurance expert Sarah Schlichter joins Sean and Ronita to discuss the basics of pet insurance. They discuss the different types of pet insurance plans available, common misconceptions about pet insurance, and other critical factors to consider, such as deductibles, co-pays, and policy exclusions. Plus: potential hidden fees and the nuances of claim payouts, key features to look for when comparing providers, and alternative financial strategies such as vet subscription services.
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
You know you need to insure your health. You know you need to insure your car and your house. But what about your four-legged family members? Is there actual value in pet insurance? These days, there are so many advanced treatment options out there for animals to help them extend their lives, but not everyone has the budget to take advantage of those, and so pet insurance can help with that and really spare your family a heart-wrenching decision about how much treatment you can afford to try. Welcome to BW’s Smart Money podcast. I’m Sean Pyles. And I’m Ronita Choudhuri-Wade. This is episode two of our nerdy deep dive into the cost of pet ownership. Last time we walked you through some of the financial considerations before deciding to buy or adopt a pet, and one of the potentially significant expenses is those trips to the vet. Yeah. You never know when your dog is going to find something on the sidewalk and decide to eat it, and I am looking at you, Mo. Or your cat decides to jettison one of its nine lives, run up a tree, and somehow not land on its feet coming down. I don’t know. Does that happen? It could happen. I’m sure it does every day somewhere in the world. But even routine checkups at the vet can be pricey. Immunizations aren’t free. Then, maybe your pet pal needs some special prescription food or medication. Enter pet insurance. Yeah, this is a big question for a lot of people. Is pet insurance worth it? And how do I know if a plan is a good one? I think I just heard Mo in the background. Mo has thoughts on pet insurance as well. Of course. I hope it’s not as complicated as human health insurance, at least in this country. Not quite. But there definitely are options that you’ll want to look at and consider before deciding to go with pet insurance, and we’re going to explore those today. Do you have pet insurance, Sean? I do not. Though, I do have a membership to a vet care service that provides essentially preventative care. I pay around $70 a month for my dog Pepper and closer to $50 for my cat Argus. The price is kind of steep, but both pets have garbage teeth and need annual cleanings, which is included in my membership. I don’t know. I guess it’s kind of worth it. But I do always wonder whether I should switch to pet insurance, especially before my pets develop some preexisting condition that insurance wouldn’t cover. What about you, Ronita? Do you have insurance for Mo? So we do. Mo has a lot to say. He’s happy with his pet insurance. We knew we were getting a terrier, and there’s a lot of energy, there’s a lot of curiosity, so we thought we’d look into it sooner, basically as soon as we decided to get Mr. Mo. But really what helped us decide on pet insurance is that my husband’s work provided a discounted premium rate, and that, the money, and the costs, and the discounted rate essentially cinched the deal for us. But while almost 87 million households owned a pet in the U.S. in 2023, only 5.7 million pets were insured, according to the Insurance Information Institute. And those pet owners paid $3.9 billion in premiums. And dogs are insured far more than cats. It’s almost 80 to 20%. Do you want some more pet insurance trivia, Sean? Oh, yeah. I’m all about the pet trivia. Okay. Fun fact, the very first pet insurance policy issued in the U.S. was back in 1982 for Lassie, the actual TV star Lassie. Wow. Why wouldn’t you protect the talent? Lassie even has a star on the Hollywood Walk of Fame! So, listeners, bark and meow at us with your pet stories and the sacrifices you make to keep them in kibble. Do you have pet insurance? Share your stories by leaving a voicemail, texting the Nerd hotline at (901) 730-6373, or emailing a voice memo to [email protected] And if you have audio of your pets, even better! Ronita, where do we begin today?
Today, we’re joined by fellow Nerd Sarah Schlichter, an expert in pet insurance. Stay tuned for our conversation.
Sarah Schlichter, welcome to the Smart Money podcast.
Hi, Ronita. Thanks for having me.
We’re glad to have you here. Do you have any fur babies?
Yes, I have a rescue lab named Sylvie. She’s sweet and currently napping behind me on the sofa. Hopefully, she stays quiet during the interview.
That’s adorable. We have you here as our BW pet insurance expert. Can you explain what pet insurance is and how it works?
Pet insurance is like human health insurance, helping cover vet bills for your pet’s sickness or injuries. There are deductibles and copays, and it won’t cover 100% of expenses. You usually pay upfront and get reimbursed later. There are different types of plans available, like accident and illness insurance, which is the most common. There’s also accident-only coverage and wellness plans for routine care.
What are some common misconceptions about pet insurance?
One big misconception is waiting to buy pet insurance until something goes wrong. Pre-existing conditions are almost always excluded, so it’s best to get coverage early. There are also other exclusions like exam fees, prescription food, and dental issues. It’s important to read the policy details before buying. If you’re feeling confused, many companies offer the option to call or live chat for assistance in answering any questions you may have before making a purchase. This can help ensure you understand what you are buying and make an informed decision. What are some typical costs associated with pet insurance?
The average cost of accident and illness insurance in the U.S. is about $56 a month for dogs and $32 a month for cats. Accident-only coverage is much cheaper, averaging about $17 a month for dogs and $10 a month for cats. However, costs can vary depending on factors such as the age and breed of the pet. Additionally, customization of the plan, deductibles, and coverage limits can impact the cost. Insurers may also have additional fees such as account setup fees or monthly payment fees. It is important to carefully review the policy to understand all costs associated with pet insurance. Again, the availability of certain pet insurance plans may vary depending on where you live. However, many pet insurance plans do offer coverage for a variety of services.
Most pet insurance plans include waiting periods before you can make a claim. These waiting periods typically range from a few days for accident claims to a couple of weeks for illness claims. It’s important to be aware of these waiting periods, as any conditions that occur before the coverage is effective are considered pre-existing and may not be covered. Additionally, some companies may have extended waiting periods for specific conditions like knee injuries or hip dysplasia, so it’s essential to check this before purchasing a plan.
When deciding whether to get pet insurance, it’s a personal decision that depends on your individual circumstances. Some people opt for pet insurance for peace of mind and to avoid arguments over costly vet bills, while others prefer to set up a separate savings account for pet expenses.
Alternatively, some vet companies offer subscription services that cover routine care like checkups, vaccines, and preventive screening tests. These services can complement a standard pet insurance plan, which typically covers emergency situations. It’s important to compare the cost and coverage of these subscription services to standalone pet insurance plans to determine which option is best for you. Ultimately, the decision comes down to what will save you the most money in the long run. When considering a vet subscription plan, it’s important to assess whether the services included are necessary for your pet. If there are services that your pet doesn’t need or that you won’t use, it may be more cost-effective to pay for routine care out of pocket.
In terms of pet insurance, there are a few key things to keep in mind. Firstly, understand that not everything will be covered, so be sure to review the policy details before making a decision. It’s also worth considering that the cheapest plan may not offer the best value, so investing a bit more for a more comprehensive policy might be beneficial. Lastly, think long-term when selecting a pet insurance plan, as switching insurers can be challenging if your pet develops a pre-existing condition.
Uncertainty is a common theme when it comes to pet insurance, as you never know when your pet may need medical care. It’s advisable to weigh the risks of not having insurance against potential vet bills and consider setting aside funds for emergencies if you opt not to get insurance.
Ultimately, the decision between a wellness care membership, setting aside savings, or investing in pet insurance depends on your individual circumstances and risk tolerance. It’s crucial to plan ahead for potential veterinary expenses, especially as pets age and healthcare costs increase.
For more financial advice and money-related questions, reach out to the Nerds at (901) 730-6373 or email them at [email protected] Remember to follow their podcast on platforms like Spotify, Apple Podcasts, and iHeartRadio for the latest episodes.
Disclaimer: The information provided is for educational and entertainment purposes only and may not be applicable to every situation. Consult a financial advisor for personalized advice.
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