Is Pet Insurance A Scam

Hi everybody, this is Michelle and Brian and we're here with Stop Being Sold, a community with a mission to show you how to stop buying financial products that you don't need and financial products that you don't understand so that you become a more informed investor and consumer and you stop being a transaction once and for all. How are you doing Brian today? Doing great. Good, good. So we're going to talk today about is pet insurance a scam? But before we get there, if you like this video, we'd love a like actually so that other people can find it and subscribe to our channel Stop Being Sold so that you can never miss another video again. All right, so pet insurance, is it a scam? You know, I know Brian, like we were talking before this video about just how many pet owners there are in the United States. And as we know, what our pets were to us 20 years ago, 10 years ago, not the same as it is now. My dog is wearing outfits. She has four beds, you know, I mean, come on. Anyway, but just you know, over 70% of US households have a pet, which equates like 9.5 million homes. That's a lot. And so I know this is a, it's a lot of pets, right? And, and, you know, it's something on everyone's mind, because not everybody, you know, pet owners, we want to take care of our pets and also not go bankrupt doing it. We're doing a pretty good job, though, because some of these dog sweaters cost a fortune. It's funny, because you're coming into the holidays and everything. Okay, it used to always be about the kids. What are you getting? People start thinking, Oh, my gosh, I get to have a pet ornament now. Every year I get every year we make one for the dog. I'm one of those. I'm one of those people. It's hilarious. So anyway, I just want to I want to share some statistics that I found with our viewers, because I think these are really important as before we even begin to answer the question. So the North American Pet Health Association reported that health insurance sector in the United States has posted gross premiums, gross written premiums of $1.99 billion in 2020, which is up 27.5% in 2019. And in 2019, it was $1.99 billion, which was in 2020. And that's gross written premiums. This is a big booming business. It's a big, big, big, big business. And so also, the same the Insurance Information Institute also reports that the total number of pets insured reached 3.1 million at the end of 2020. Think about that for a minute. You just stated that roughly 90 million homes in the United States, but only 3.1 million? Yeah. How insured? So how big is the market potential still It's massive. It's, it's 100. It's 1000%. It's just huge, right? So anyway, let's let's just dive in. I've got some other stats and things like that. But you know, is it? Let's talk about let's start with the pros. We'll start with talk about the cons of pet insurance or pros of pet insurance, cons of pet insurance, and then let's dive into some alternatives. Okay, so pros, I'm going to throw it to you. Well, first of all, think of it this way, in experience wise, my daughter-in-law works at a pet hospital. So every night she comes home with a different story about a pet having to be put down or they have funeral services for pets now also. But then the high cost of the prescriptions, the medicines, the special food, I know, my little chihuahua has to eat a special food, or you end up going to the doctor, which costs more money. So you spend the money up front to pay for the food. So you don't have to go to insurance, just like life insurance is, yes, it may be a necessity. You just have to realize that if you never use it, you know, the biggest thing that I see or hear is the fact that, you know, why did I spend all that money? I could have done something else with it. Right. Until you go in and all of a sudden you've got a $2,000 hospital bill for your pet. Oh my gosh, I wish I had the insurance then. Right, or yeah, exactly, exactly right. And so I was reading a stat that the average cost of unexpected veterinary care can run you between $800 and $1,500. And I'm sure that doesn't include, you know, if they need the special food after the bandages or whatever it is, that's just the initial unexpected treatment. Yeah, you're right. Yeah, yeah. So let's dive in. I'm going to talk a little bit about the cons. You know, it's expensive. Let's start there. And you're right. Like, what if nothing happens to your animal? My dog is, it is a fiddle and the only time I've ever, thank goodness, the only time I've ever had to take her to the vet is for shots. That's it. She's healthy. She's great. Yes. Thank you. And she's almost eight. So yeah, so it's, you know, she's very, very healthy. I had a dog before this that I almost bled me dry. I mean, like, almost bankrupted me. $11,000 at the end of her life without realizing I did it. And it took three months, three months. I hear that all the time, Michelle. Yeah, it really, I mean, it just wiped me out. It took everything I had and nothing left at the end of it. And then she was still dead. I mean, you know, that's, it's really a sad story, but I did everything I could. So, you know, with, with it being, you know, it is, it is extremely, it can be, I should say, extremely expensive. You know, just looking at the average monthly cost of pet insurance for dogs is $48.78 and then $29.16 for cats. This is a month, right? So you're looking at like $585 and some change for dogs annually, and then $349.92 annually for cats. Now here's the thing though, is doing my research on this, you know, cause I'm looking at, do I need pet insurance? Not for my dog, but just like generally I was looking for my dog, but you know, people ask me like, does your dog have pet insurance? Why is she so healthy? All this kind of stuff. Well, you know, one thing I found in looking is you can get a basic or you could get a comprehensive coverage, right? For, for your, for your fur baby. But here's the kicker is that, you know, this often, they don't often include dental. Spraying and neutering is not on there, you know? Let me see if I've got, I've got my notes here. Where'd they go? Let's see. Ah, here we go. So it doesn't always cover, it doesn't cover dental. It doesn't cover any of these other things like wellness. And you have to get a wellness supplement plan package. Kind of like regular health insurance for the average person today. Yeah. 100%. Totally. Right. So, you know, there's a lot of things that it does not cover and, you know, look, let's just go back to this. This is average everybody. Let's say it's 585 on average. Obviously the cost of the coverage will be based on the plan you selected, you know, and a lot of other things. But, you know, $585 a year, if that doesn't cover some basic things, that's, that's, you know, that's a, that's a big, it's a big expense when you take the annual that you're paying, what you're paying annually on top of like, okay, now I have to spay my dog. Now I have to neuter my dog. Now I need whatever it is, right? So, I mean, it's, it can, here's what I suggest. This is what I did. You want to do your research, go look at what pet insurance is right for you. You know, you like do your, do your research, figure out what plans there are, policies, go through the whole list, and then call your vet and find out some of these basic things. So I keep harping on dental, you know, not a lot of dogs either teeth clean that much, but, you know, let's say you call, what's the average for dental? Oh, it's a thousand dollars. Holy cow. Okay. So write that down, right? It's not something you're going to get done every year, but what's it cost for this? What's it cost for that? You know, it's, and, and see what's not on the plan, add it all up and then make a decision based off that, right? Maybe we need a, a future video to make sure we do. How about we make a checklist? That's actually a good one. Stuff to ask, before you buy a pet insurance, call your vet, ask them this list of five, 10 questions and see what an average cost, so you can calculate in your mind, it, you know, the value of paying for the pet insurance. Right. Yeah, absolutely. And then you can make, yeah, you make that decision. Like, is it better for me to pay out of pocket and not have insurance? You know, even if all these things were to go wrong, God forbid. And now that you mentioned that while you're on the phone asking the veterinarian, these questions, what about asking the question? Okay. So if I bought this health insurance, what, well, first of all, what pet insurance do you accept? It's not taken everywhere. Exactly. Yeah. It's like regular health insurance, some doctors in network, out of network, all that kind of stuff. But not only would you accept, but if I didn't have insurance, what would be my cost for this procedure? If I was paying cash. Right. You may see that, oh my gosh, I get 10% discount, 15%. Whatever it may be. Wouldn't you like to know that kind of information up front to help you make an honest decision of whether or not pet insurance is right for you? Right. Absolutely. Absolutely. This is a good one. And so like, this leads me to this next point is, okay, so if you, you know, the pros, obviously, you need to be able to cover something if it happens. You really do. Because, you know, I've heard horror stories. This is years ago, but I lived not that long ago. I had like a neighbor who I used to take care of her Akita. And which, wow, beautiful dog that scared me to death. And he would come over and play with my pet. And she would work the night shift at the vet hospital. And she used to talk about how many people had to have their animals put down, because they just couldn't afford to leave it a lot, leave the animal alive was, was inhumane. So like, obviously pros, right, know the cons, the cons, sometimes it's actually less expensive to pay out of your own pocket, than it is to have the insurance. And it just depends on your situation. But there all are alternatives. And a lot of people don't, you know, realize, realize there are so you want to that's one alternative that people could look into. So first, let's put it this, let's put this way. Let's say the average cost, I think you said it was close to 50 bucks a month or a little for a dog, right? Okay, so that's 600 bucks a year, and let's say a question, do you have enough in savings to pay for a $2,000 procedure on your animal? If you don't, you've got two options, buy the insurance, or start saving the cost of that insurance on a monthly basis into and I'm not talking an investment account to where fluctuates up and down all the time. How about savings account to where if God forbid, something happens to your little poodle or whatever it may be, or like my little chihuahua, that I can go to the bank and pull that money out and pay cash for what needs to be done. That would be one scenario there. If you don't want to buy pet insurance, that would be my first alternative. Yeah, just save for it. Yeah, save for it. Take the cost of what the health insurance would cost you and put it back. And then you'll get away from those that say, look, I hate insurance, insurance cost me 90, I never use it, so I just feel it's wasted money. But if you took the cost of what that insurance would be and put it into a savings account, two years from now when you may need it, it's there. But if you don't in two years, guess what? You've got a nice little savings account sitting there. Right, it's there. That'd be my first alternative that I would choose. And then there's also care credit, which most people, I always thought it was used just for human beings, but no. No, care credit is very common in the pet world with veterinarians, with even your own personal health. And, you know, a lot of them are, think about this, kind of like when you go into Best Buy and, you know, it's Christmas time, you just say, hey, you get 90 days, same as cash. A lot of these, a lot of care credit plans, while you're sitting in the veterinarian's office, will say, okay, here's the procedure here. Yeah, let me bring them real quick and see how long we can get you 12 months. So that's 24 months, same as cash for long term, for a much larger bill. Larger amount, yeah, right. And it will also cost the copy of medication. You can add it all up and get a loan for that amount. And the doctor would probably discount almost the same as cash because they're getting the money up front. Paying up front, exactly. And it doesn't take long to get approved and it doesn't take long to actually get. Yeah, some of the offices have everything right there where they'll just instantly do it while you're sitting there, so. Right, or you can just call. I've done that before. I haven't done it, but I had a friend that needed it very quickly and it was amazing. It was like, boop, there you go, you know. That was it. Yeah, here you go, you're approved for this amount. Okay, thanks. Right. Another one, you know, I started looking into foundations. There are some really interesting, not interesting, I should say, there are quite a few foundations and organizations out there that help provide financial aid for pet owners or financial aid resources for pet owners. And so the American Veterinary Medical Foundation, on their site, they have a whole list of, here are the organizations that will help you, or they provide resources or just more information, which, you know, so you can apply through some of those. That's another one. And then is there anything else? Well, you know, we hear this all the time now for all kinds of situations, and this may come into play here. I've seen it on like Facebook or social media sites where people set up a GoFundMe account. Yeah, just raise the money. And people love animals, especially if you've got a picture of an animal on there. I have a client that gives to, no matter what, if you got the dog on TV, that's almost like you'll see a tear coming out of the dog's eye. And it's one of these places where you send money to for them for starving animals. Right, yeah, yeah. Breed pets or whatever. She has to go write a check every time she sees that commercial. Yeah, no, I know. I There's people willing to help to help you through this process. But I will say, like, that's the last resort because if you're dealing, if something happened, like Fido gets hit by a car or something happens, like, that's the last thing you want to be doing is creating a GoFundMe account, right? What you want is the cash when you need it. Yeah, you need it now. Exactly. So that's the answer to the question, is it a scam or not? Depends on how you feel about insurance. That's the simplest way to put it. I remember, no matter what type of insurance it was, that when you're sitting with a husband and wife, the husband would always want the cheapest plan because he didn't want to spend the money and waste it on insurance. And the wife would always want the biggest plan because, oh my gosh, what if something happens, right? Right, right. It comes down to personal preference, Michelle. Here's some alternatives. You know, our goal today was to provide you value as far as giving you some alternatives and breaking down the cost and giving you some ideas on how to go and make an informed decision about whether or not insurance is right for you. Right. Awesome. Thanks so much. This is a good one. So, all right. Well, listen, if you like this video and you like our content, we'd love a like, and we'd also love a subscribe so you don't miss any more of our content. We talk about everything from annuities to purchasing, what IRAs, financial products, life insurance, you name it. Just really, we're here to help you become a more informed consumer. Awesome. Thanks, Brian. Thank you. Have a great day, everyone.