Just to clarify, in this case the numbers don't add up. But the many examples given on the website do make a case for keeping the insurance for now, as another injury or illness may get more coverage for us. Obviously, we're taking a chance, but 24% of $7000 is about $1700. It would take 10 years at $14/month to save that up (maybe less with some interest). So for now, a calculated risk. Ideally, insurance should cover you for big bills (our first baby was $20,000 in hospital bills, we hadn't paid anywhere near that amount into the healthcare system at that time, although our employer had). I am hoping nothing else goes wrong with our dog anyway, but this may still be a better option than having no insurance at all.
About the only time pet insurance makes financial sense is when you adopt a shelter pet with an unknown history. Then only keep the pet insurance for a year or two. Beyond that, insurance is a poor choice compared to saving a small amount each month in a pet emergency fund.
On a more philosophical note: Pets should be a privilege that we have only if we can afford them - that is, only if we are able to pay for the routine and emergency care they need up front, in cash. If you feel like you need insurance to afford the veterinary care for your pet, either you can't afford to have one, or you are willing to spend too much on their care.
Great post! I like to plan my meals so that the flavors of leftovers can easily be incorporated into an "encore meal". For example, leftover Teriyaki Chicken can be used in a stir fry, leftover Garlic Chicken makes a wonderful addition to Chicken and Rice Soup, and leftover taco fixings can be whipped into a Taco Salad or Enchiladas. Creating "planned leftovers" allows me to use up more of our leftovers which reduces our grocery bill while minimizing waste.
What starts out as a small debt, if unpaid or ignored, can become a large debt with accrual of interest and penalties. The point of the article is to make people aware of the court process and possible serious consequences if they aren't on top of their finances and pro-active about finding a solution. As a credit counselor, I can't tell you how many times a client said they just put their unopened bills in a box in the closet because they were too afraid to see what was in them. That included letters from the collection agency and courts.
I'm a vet student with one cat, and I purchased a year of pet health insurance shortly after adopting her. Next year, I plan on discontinuing insurance and (as others have suggested) contributing the amount I would have paid to the insurance company each year to a dedicated savings account.
This is why:
No matter what level of coverage I buy, I'm contributing that amount each year to my cat's health. If I buy insurance, the money is gone. It may or may not be reimbursed substantially in an emergency. If I set it aside, it's there until it's needed. I can then use all the money to pay my vet instead of gambling on an insurance company.
I would cancel that policy. You say 24% is better than nothing, but how much have you paid in premiums over the past 18 months? At $14 a month, you've paid in $252. And the one time you needed it, they only covered $135 of your expenses.
You would be MUCH better off saving that $14 a month (and maybe a little more) in a separate savings account for pet health expenses. That way no one is profiting from your monthly payments but you.
Pet health insurance is one of the biggest scams out there. There are too many loopholes, and as you said, it's designed to confuse consumers. They feel like they're protecting themselves and their pets, but really they're just paying into a worthless insurance policy. Save the money instead, and if something happens to your dog, you'll have a healthy pet emergency fund to help pay for his medical expenses.
Similar to soup, I am a big fan of turning leftover meat and vegetables into chullent, a Jewish, slow cooked stew. It is best to use uncooked foods found around the kitchen that are nearing the end of their life. Generally, we put everything in on Friday afternoon and eat it on Saturday afternoon after spending a whole day in a crock pot or similar slow cooker.
When I was in high school, a conversation I had with my father sticks out in my mind. I told him, "You know in my lifetime I might see something like the Great Depression." My father responded, "Well, you know they put safeguards in place to keep that from happening again." My grandfather, at the time in his 80s, knew better. He always kept a full pantry of canned goods.
In a world with 10% unemployment, the advice of this post is even more pertinent. The last two years have been an unpleasant reminder of the reality of economic cycles.
My father taught me something he learned from a bartender. The bartender said, "In every bottle, there are 16 drinks, but you can usually squeeze out an extra one. Now, you can sell that extra drink, you can give it away, or you can drink it yourself, but YOU CAN'T DO ALL THREE!" I'm reminded of this when I have competing goals, especially goals that require my time. For example, with any particular day, I could teach a class, or go to a play, or see my nieces, but I can't do all three at the same time. If I keep making choices that take me away from my family, eventually I won't be close to them. Ultimately, money is replaceable but time isn't, yet we treat it as if money is rare but time is plentiful.
I wish I had it when I had my cat mauled http://www.blurb.com/bookstore/detail/1207486 ( p.s. you can vote for my book to win.. and then maybe I can cover the cost of pet bills ) But the people who complain about the payments not equalling the savings.. Paying a small amount each month is definitely better than paying one huge emergency bill. My vet wouldnt even touch the cat until 80 percent of the bill was on downpayment. ( People apparently bail when vet bills appear .. leaving the vet with the animal.. ) I pay car insurance, soon health insurance.. I love my cat.. would hate to have an issue just because of money
Insurance is for losses you can't afford. There's no point in insuring yourself against a loss you can afford -- the insurance costs more than the loss, it's just spread over many small payments.
So the first step is figuring out how big a loss you can/can't afford
You give the example of $7000. I have never seen a pet insurance policy that would pay out that amount, even the premium plans. When I've read the policies from various providers, it's always seemed extremely unlikely that it would ever pay out more than a few hundred dollars.
We just bought a 2000 subaru forester for $4600. We replaced the head on the engine for $1500 and put all new tires and gave it an alignment for $700. It's a nice solid car that I expect to have around for a long time. We did a lot of research and talked to people with subaru's before we got it. We are usually die hard VW folks, but have been unhappy with or VW passat and it's slug and electrical problems.
We are thinking about replacing our VW passat. We are thinking of getting a car that has a solid body and putting a brand new engine in it first thing, so it's almost like having a new car.
People always discurage us from buying used when we can aford a new car, but a nice new engine could make it nearly as reliable as a new car.
My two dogs are insured through VPI and I've been REALLY happy with them so far, but we've only gone in for routine things at this point.
The key to success with any pet insurance is knowing the benefits schedule, and if you're not sure, you can call customer service and get the question answered. VPI has people there 24 hours a day.
I know people preach a lot of "self-insurance," but be real: how many people actually have the discipline to do that consistently? I tried it after broaching the idea of pet insurance to my vet and he said I'd be better off just socking away $50 a month on my own. After about a year, I realized that just wasn't going to happen.
My husband and I have a 70 lb. lab mix. When he was a pup he had stomach problems that - long story short - amounted to $6200 in vet bills for surgeries, hospital stays, and more. Luckily we had insurance and all but our $200 copay and some prescription food (not more than $40) was covered and returned to us in a check. If we had not had the insurance, we would not have been able to do any of this and he would have died. Our insurance costs around $250/year and its extensive. We use PetPlan. I've heard so many horror stories about VPI. It's definitely not the only way to go. Do some research. Some pet insurance plans are really worth it.
Great article. It brings up some very valid point and most of which I agree with. Hybrids are still very pricey but at the same time all cars are pricey. I mean if you add up repairs and insurance among other things cars are just a giant debt. You will continue to poor money into cars as long as you have one. Everyone needs transportation now days. It's hard not to have a car.
You paid over $250 in monthly insurance fees to save $135? I agree, in a very expensive scenario ($7000), you might get back more... but how much will you have paid by then? You're probably better off paying into an "insurance" savings account.
We signed up for Pet Insurance also when our Boston Terrier was a puppy. I also didn't read the fine print carefully enough. The monthly premiums (in Canada) were a bit over $30. (why is everything so much more here?). During the 18 months we kept the policy the premium increased twice. Somehow I was under the impression that the rate would remain the same. Similar to your experience, when I made a claim after over a year I found that the amount reimbursed on a small claim was about 25%. There's the deductible and then some things aren't covered... When I read the policy more carefully I realized that coverage could be changed unilaterally by the insurance company depending upon the amount of claims in that area generally. Or that only one knee would be covered not two in dogs prone to knee problems. Of course, any routine exams or vaccinations are not covered, nor are some medications, like ear drops.
If we put aside the amount of the monthly premiums in a savings account after a few years we would have enough to cover something major and without the uncertainty of relying on someone's whim as to whether to pay. We cancelled the policy after about 18 months. Our dog is now four years old and we have had no vet expenses other than annual exam and shots which would not have been covered. We are in a position to pay for any required treatment or surgery (I hope I am never placed in the position of placing a cap on that)
I understand that insurance companies have to make a profit to stay in business. Judging by the number of policies available by different companies I suspect it is a sufficiently profitable business. The pet owners who take out these policies are likely those that treat their pets very well in terms of such matters as good food and preventative care. On the other hand, many are likely to be purebred dogs, like ours, which some say are more prone to congenital defects due to over-breeding.
Veterinarian offices seem to support the concept; I picked up the brochure right at their front counter. I should have asked for a copy of the entire policy and read it before signing up; I did so thinking that annual check ups and vaccinations were included.
What it came down to was a matter of trust. I didn't feel secure that, after perhaps paying thousands into the plan over 8 to 10 years, when my dog was elderly and I had to make a major claim I wouldn't be turned down for some obscure reason and all those payments would be wasted. At least if I put the money in a designated ING account the money would be there when I needed it.
I buy new car's and drive them until they die. In my experience a new car without all the bells and whistles are not that much more than a late model used car.
"We were considering canceling VPI, but we figure 24 percent is better than nothing."
Actually it is worse than nothing. You paid $14 a month for 18 months. So you paid them $252 to reimburse you a measly $135. With no insurance you would have been out $545.43, but instead you're out $662.43. That's BS.
So, at $14 per month for 18 months you've paid $252 to get that $135 back. Why do you want to stay with the insurance company again? The math is simple and does not compute at all.
In general I do not like pet insurance because it is causing vet bills to spiral out of control just like human medical care has. It's much easier to say yes to the expensive thing that you might not need if you think it's covered under insurance. And thanks to the complexities of billing a vet is often likely to give a cash discount for services if you pay immediately.
As part of our cat budget we just set aside another $25 a month for eventual vet bills.
I personally put that amount away in a bank account just for such an emergency & not even mess with their insurance. Things like that happen few & far between so by the time something does happen we have the money in the bank... That just makes more sense for us.
Just to clarify, in this case the numbers don't add up. But the many examples given on the website do make a case for keeping the insurance for now, as another injury or illness may get more coverage for us. Obviously, we're taking a chance, but 24% of $7000 is about $1700. It would take 10 years at $14/month to save that up (maybe less with some interest). So for now, a calculated risk. Ideally, insurance should cover you for big bills (our first baby was $20,000 in hospital bills, we hadn't paid anywhere near that amount into the healthcare system at that time, although our employer had). I am hoping nothing else goes wrong with our dog anyway, but this may still be a better option than having no insurance at all.
I just wanted to say I totally agree with you on the part about Chicago water. It tastes so good for some reason, kind of wonder why.
About the only time pet insurance makes financial sense is when you adopt a shelter pet with an unknown history. Then only keep the pet insurance for a year or two. Beyond that, insurance is a poor choice compared to saving a small amount each month in a pet emergency fund.
On a more philosophical note: Pets should be a privilege that we have only if we can afford them - that is, only if we are able to pay for the routine and emergency care they need up front, in cash. If you feel like you need insurance to afford the veterinary care for your pet, either you can't afford to have one, or you are willing to spend too much on their care.
Great post! I like to plan my meals so that the flavors of leftovers can easily be incorporated into an "encore meal". For example, leftover Teriyaki Chicken can be used in a stir fry, leftover Garlic Chicken makes a wonderful addition to Chicken and Rice Soup, and leftover taco fixings can be whipped into a Taco Salad or Enchiladas. Creating "planned leftovers" allows me to use up more of our leftovers which reduces our grocery bill while minimizing waste.
What starts out as a small debt, if unpaid or ignored, can become a large debt with accrual of interest and penalties. The point of the article is to make people aware of the court process and possible serious consequences if they aren't on top of their finances and pro-active about finding a solution. As a credit counselor, I can't tell you how many times a client said they just put their unopened bills in a box in the closet because they were too afraid to see what was in them. That included letters from the collection agency and courts.
I'm a vet student with one cat, and I purchased a year of pet health insurance shortly after adopting her. Next year, I plan on discontinuing insurance and (as others have suggested) contributing the amount I would have paid to the insurance company each year to a dedicated savings account.
This is why:
No matter what level of coverage I buy, I'm contributing that amount each year to my cat's health. If I buy insurance, the money is gone. It may or may not be reimbursed substantially in an emergency. If I set it aside, it's there until it's needed. I can then use all the money to pay my vet instead of gambling on an insurance company.
I would cancel that policy. You say 24% is better than nothing, but how much have you paid in premiums over the past 18 months? At $14 a month, you've paid in $252. And the one time you needed it, they only covered $135 of your expenses.
You would be MUCH better off saving that $14 a month (and maybe a little more) in a separate savings account for pet health expenses. That way no one is profiting from your monthly payments but you.
Pet health insurance is one of the biggest scams out there. There are too many loopholes, and as you said, it's designed to confuse consumers. They feel like they're protecting themselves and their pets, but really they're just paying into a worthless insurance policy. Save the money instead, and if something happens to your dog, you'll have a healthy pet emergency fund to help pay for his medical expenses.
Similar to soup, I am a big fan of turning leftover meat and vegetables into chullent, a Jewish, slow cooked stew. It is best to use uncooked foods found around the kitchen that are nearing the end of their life. Generally, we put everything in on Friday afternoon and eat it on Saturday afternoon after spending a whole day in a crock pot or similar slow cooker.
When I was in high school, a conversation I had with my father sticks out in my mind. I told him, "You know in my lifetime I might see something like the Great Depression." My father responded, "Well, you know they put safeguards in place to keep that from happening again." My grandfather, at the time in his 80s, knew better. He always kept a full pantry of canned goods.
In a world with 10% unemployment, the advice of this post is even more pertinent. The last two years have been an unpleasant reminder of the reality of economic cycles.
My father taught me something he learned from a bartender. The bartender said, "In every bottle, there are 16 drinks, but you can usually squeeze out an extra one. Now, you can sell that extra drink, you can give it away, or you can drink it yourself, but YOU CAN'T DO ALL THREE!" I'm reminded of this when I have competing goals, especially goals that require my time. For example, with any particular day, I could teach a class, or go to a play, or see my nieces, but I can't do all three at the same time. If I keep making choices that take me away from my family, eventually I won't be close to them. Ultimately, money is replaceable but time isn't, yet we treat it as if money is rare but time is plentiful.
I wish I had it when I had my cat mauled http://www.blurb.com/bookstore/detail/1207486 ( p.s. you can vote for my book to win.. and then maybe I can cover the cost of pet bills ) But the people who complain about the payments not equalling the savings.. Paying a small amount each month is definitely better than paying one huge emergency bill. My vet wouldnt even touch the cat until 80 percent of the bill was on downpayment. ( People apparently bail when vet bills appear .. leaving the vet with the animal.. ) I pay car insurance, soon health insurance.. I love my cat.. would hate to have an issue just because of money
Insurance is for losses you can't afford. There's no point in insuring yourself against a loss you can afford -- the insurance costs more than the loss, it's just spread over many small payments.
So the first step is figuring out how big a loss you can/can't afford
You give the example of $7000. I have never seen a pet insurance policy that would pay out that amount, even the premium plans. When I've read the policies from various providers, it's always seemed extremely unlikely that it would ever pay out more than a few hundred dollars.
We just bought a 2000 subaru forester for $4600. We replaced the head on the engine for $1500 and put all new tires and gave it an alignment for $700. It's a nice solid car that I expect to have around for a long time. We did a lot of research and talked to people with subaru's before we got it. We are usually die hard VW folks, but have been unhappy with or VW passat and it's slug and electrical problems.
We are thinking about replacing our VW passat. We are thinking of getting a car that has a solid body and putting a brand new engine in it first thing, so it's almost like having a new car.
People always discurage us from buying used when we can aford a new car, but a nice new engine could make it nearly as reliable as a new car.
My two dogs are insured through VPI and I've been REALLY happy with them so far, but we've only gone in for routine things at this point.
The key to success with any pet insurance is knowing the benefits schedule, and if you're not sure, you can call customer service and get the question answered. VPI has people there 24 hours a day.
I know people preach a lot of "self-insurance," but be real: how many people actually have the discipline to do that consistently? I tried it after broaching the idea of pet insurance to my vet and he said I'd be better off just socking away $50 a month on my own. After about a year, I realized that just wasn't going to happen.
My husband and I have a 70 lb. lab mix. When he was a pup he had stomach problems that - long story short - amounted to $6200 in vet bills for surgeries, hospital stays, and more. Luckily we had insurance and all but our $200 copay and some prescription food (not more than $40) was covered and returned to us in a check. If we had not had the insurance, we would not have been able to do any of this and he would have died. Our insurance costs around $250/year and its extensive. We use PetPlan. I've heard so many horror stories about VPI. It's definitely not the only way to go. Do some research. Some pet insurance plans are really worth it.
This is so neat! can't wait to try some!
Great article. It brings up some very valid point and most of which I agree with. Hybrids are still very pricey but at the same time all cars are pricey. I mean if you add up repairs and insurance among other things cars are just a giant debt. You will continue to poor money into cars as long as you have one. Everyone needs transportation now days. It's hard not to have a car.
You paid over $250 in monthly insurance fees to save $135? I agree, in a very expensive scenario ($7000), you might get back more... but how much will you have paid by then? You're probably better off paying into an "insurance" savings account.
We signed up for Pet Insurance also when our Boston Terrier was a puppy. I also didn't read the fine print carefully enough. The monthly premiums (in Canada) were a bit over $30. (why is everything so much more here?). During the 18 months we kept the policy the premium increased twice. Somehow I was under the impression that the rate would remain the same. Similar to your experience, when I made a claim after over a year I found that the amount reimbursed on a small claim was about 25%. There's the deductible and then some things aren't covered... When I read the policy more carefully I realized that coverage could be changed unilaterally by the insurance company depending upon the amount of claims in that area generally. Or that only one knee would be covered not two in dogs prone to knee problems. Of course, any routine exams or vaccinations are not covered, nor are some medications, like ear drops.
If we put aside the amount of the monthly premiums in a savings account after a few years we would have enough to cover something major and without the uncertainty of relying on someone's whim as to whether to pay. We cancelled the policy after about 18 months. Our dog is now four years old and we have had no vet expenses other than annual exam and shots which would not have been covered. We are in a position to pay for any required treatment or surgery (I hope I am never placed in the position of placing a cap on that)
I understand that insurance companies have to make a profit to stay in business. Judging by the number of policies available by different companies I suspect it is a sufficiently profitable business. The pet owners who take out these policies are likely those that treat their pets very well in terms of such matters as good food and preventative care. On the other hand, many are likely to be purebred dogs, like ours, which some say are more prone to congenital defects due to over-breeding.
Veterinarian offices seem to support the concept; I picked up the brochure right at their front counter. I should have asked for a copy of the entire policy and read it before signing up; I did so thinking that annual check ups and vaccinations were included.
What it came down to was a matter of trust. I didn't feel secure that, after perhaps paying thousands into the plan over 8 to 10 years, when my dog was elderly and I had to make a major claim I wouldn't be turned down for some obscure reason and all those payments would be wasted. At least if I put the money in a designated ING account the money would be there when I needed it.
Thank you for this article - I have been considering purchasing VPI for my two cats. After reading this, I'm pretty sure I'm better off self-insuring.
I buy new car's and drive them until they die. In my experience a new car without all the bells and whistles are not that much more than a late model used car.
"We were considering canceling VPI, but we figure 24 percent is better than nothing."
Actually it is worse than nothing. You paid $14 a month for 18 months. So you paid them $252 to reimburse you a measly $135. With no insurance you would have been out $545.43, but instead you're out $662.43. That's BS.
So, at $14 per month for 18 months you've paid $252 to get that $135 back. Why do you want to stay with the insurance company again? The math is simple and does not compute at all.
In general I do not like pet insurance because it is causing vet bills to spiral out of control just like human medical care has. It's much easier to say yes to the expensive thing that you might not need if you think it's covered under insurance. And thanks to the complexities of billing a vet is often likely to give a cash discount for services if you pay immediately.
As part of our cat budget we just set aside another $25 a month for eventual vet bills.
I can vouch for #13! I can now close my teeth together. It's fantastic.
I personally put that amount away in a bank account just for such an emergency & not even mess with their insurance. Things like that happen few & far between so by the time something does happen we have the money in the bank... That just makes more sense for us.