Pros & Cons of Pet Insurance

Health insurance is an important form of protection that ensures that you and your family receive access to medical care at an affordable rate. Pet insurance offers a similar product for the medical needs of pets. Pet owners can opt for an insurance policy that limits their out-of-pocket costs and covers some advanced treatments for sick pets.

Purpose

• The purpose of pet insurance is to limit the pet owner's financial responsibility in the event of an expensive illness. As with health insurance for humans, pet insurance requires policyholders to pay an annual or monthly premium and a co-payment for each office visit, plus a deductible for each illness or incident. Pet insurance companies pay the vets for the full cost of treatment and profit from the difference between the premiums pet owners pay and the money they pay out on claims.

Features

• Pet insurance has many of the same features as standard health insurance. Owners may elect to have a lower deductible and pay higher rates, or pay a higher deductible for each claim but save on the policy premium. Like health insurance, pet insurance doesn't necessarily cover preexisting conditions. Owners pay a co-payment for costs like office visits, x-rays and prescription medications. One feature that's unique to pet health care is its exclusion of coverage for hereditary defects in pets.

Benefits

• The primary benefit of pet insurance is the possibility of savings for owners. U.S. News & World Report notes that modern veterinary medicine includes treatment options such as MRIs and chemotherapy, which can cost between $1,000 and $5,000. Owners who purchase pet insurance are only responsible for paying a deductible instead of bearing the full brunt of these costs. Pet insurance can also ensure that a pet receives the best possible care regardless of cost.

Drawbacks

• Pet insurance can be expensive, and there's no guarantee that owners will be able to make use of it. U.S. News & World Report notes that insurance premiums can add up to several thousand dollars over a pet's lifetime. For owners whose pets never need advanced medical treatments, this money goes largely to waste. Pet insurance may also encourage owners to seek treatment in situations where euthanasia would otherwise be a more affordable, and more humane, decision.

Sources

• According to U.S. News & World Report, the private insurance company Veterinary Pet Insurance Co. sold 80 percent of pet insurance policies as recently as 2006. VPI and other private companies sell most pet insurance policies directly to pet owners. However, some companies offer pet insurance as an employee benefit, along with medical insurance and dental plans for the employee and her family.