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Let’s Get Real! Pet Insurance for Accidents, a Pet Trust if We Die

One of the rules of my blog is to stay positive; but I’ve had to learn that being positive doesn’t mean that we bury our head in the sand and ignore reality.  I was thankful to Anisha Sekar for submitting this great information about the importance of pet insurance, but for also broaching the subject of setting up a pet trust.  What happens to our pets if something happens to their humans?

Pets are indispensable, not only providing joy, but also surprising health benefits, including prevention of heart disease and reduced risk of depression. Needless to say, most pet owners care f0r and invest a great deal in their pets’ well-being. Pet owners spent $50.96 billion toward pet care in 2011 alone, according to the American Pet Products Association.

Fiercely loyal and loving without pretense, our dogs, of course, are family. It’s only right to treat them well, and it seems we’ve mastered the costly art of rudimentary spending, what with the $1,500+ we spend each year on our four-legged friends. But beyond the basics of food and shelter, it’s also important to plan for emergencies.

Something happens to your dog: Pet insurance or a savings account?

Dogs get sick and get hurt without warning, and the appropriate medical attention can be just as costly as that for a human. And just as health insurance exists to guard against rare yet prohibitively expensive events, pet insurance offers a hedge against vet bills, emergency visits and ongoing care.

Like human medical insurance, most pet insurance pays for a percentage of doctor’s visits and for care above an annual deductible. But should you opt for a premium or just set aside funds for your pet’s care and add to it over time?

According to the APPA, the average dog owner spent $407 on surgical visits and $208 for routine veterinary care in 2011. The average person who has pet insurance will pay in more than he gets out – that’s how insurance companies are profitable. If you’re able to absorb the hit of an expensive health problem, you may be better off avoiding the premiums and opting for a high-yield savings account.

When you get insurance, you’re saying, “I’d rather pay $100 for 10 years than pay $500 in year one.” You’re likely to lose money, but you do so because the consequences of being hit with the bill all at once would be catastrophic. If this isn’t the case, you can save the money and put aside a set amount each year in a rainy-day fund.

Something happens to you: Setting up a pet trust

Just as with our pets’ health, the future of our own is uncertain. Should your dog outlive you, the best gift you could leave behind is to entrust your dog to a loving caretaker. You can set up a pet trust that names a caretaker for your dog and provides the funds to do so. Remember that caring for a pet is a significant monetary burden (over $1,500 a year on average), so it’s best to provide sufficient funds for your dog’s care. That money is typically paid out annually for the rest of the pet’s life (though some states limit the annual payouts to 21 years).

Pet trust laws vary from state to state. Check the ASPCA’s state law chart to see the laws and limitations. Kentucky, Louisiana, Minnesota and Mississippi don’t have pet trust laws; if you live in one of those states, the ASPCA recommends looking into a life trust, writing your pet into your will or making arrangements with a humane society.

When writing your pet trust, remember to:

  • Adequately provision for the cost of your pet over its lifetime. A puppy will likely require more funds than an older dog.
  • Include stipulations for your pet’s care. For example, require annual or biannual veterinary checkups.
  • Leave detailed instructions for your pet’s care. Include allergies, exercise, diet, medical history, etc.
  • Account for the costs of setting up and maintaining the trust. This includes attorney fees, for example.

As we know, our dogs are a costly investment. For prospective dog owners, the financial aspects should be weighed appropriately prior to undertaking the responsibilities of dog ownership. Nevertheless, we treat our dogs as we would family for their unswerving loyalty and abundant affection. We can take the necessary precautions now to ensure they’re loved in the best way their whole lives through.

Author Bio: Anisha Sekar writes for NerdWallet.com, a personal finance website dedicated to unbiased reviews of credit cards, savings accounts and more.

13 Comments

  1. You’ve made some excellent points here…good post with lots of food for thought, even if it’s topics we don’t usually want to think about

    Reply
    • Thanks! I don’t like to think of our dogs being sick or injured. It’s such a bummer topic. What’s funny is that after signing up for pet insurance, I don’t worry so much, because we no longer have to think about what our budget is for care; it’s what the deductible is, period. Trupanion handles the rest :)

      The hard part is thinking of what would happen to our dogs if something were to happen with us. I couldn’t handle that discussion so I’m excited that this guest writer did tackle it.

      Reply
      • On the second part…I’ve recently done personal estate planning and have included Gizmo in that…Luckily I have good, friends who love Gizmo and have agreed that if anything happens to me he will become a permanent part of their family. That is now written into my will. It was difficult to think about, but I feel very good about having it done.

        Reply
  2. These are great and very important topics. Thanks for covering them and getting the conversations started.

    On the first point, we learned the value of pet insurance when Beau had to have life-saving laryngeal surgery while battling pneumonia at the same time. I don’t tell people this figure often but – $8,000 later, we brought him home safe and sound.

    We’re in decent financial shape but that figure would turn anybody’s head, I think. If nothing else, pet insurance allows you to make decisions based on what is best for you and your pet, not your pocketbook.

    The first thing we did when we got Bella was have her micro-chipped. The second was to sign her up for pet insurance. (We have, and like, PetPlan.)

    Reply
    • Thanks for sharing the dollar amount, Leslie – it’s really eye opening and important to share with dog lovers, because having a dog is serious business.

      I appreciate your contribution. Have a lovely weekend :)

      Kimberly

      Reply
  3. It’s always sad to think of these things, but what a great way to start off the year! We always provide for human children and family, so it’s definitely about time that people start to think about their furry kids too! 😀 Domeek hasn’t set up an official trust yet, but we have definitely consulted with my Auntie for taking care of me if something bad happens! Thanks for all the wonderful information!!

    Reply
    • We’re going to start on our trust. We don’t have any guardians, but that’s going to change in 2013!

      Reply
  4. I think that everyone who owns a pet should consider pet insurance. I personally don’t have insurance on any of my pets. Working at a vet clinic I get very good benefits on pet care. Free heartworm and flea protection, medication and services are at cost, it’s a very nice perk. However, right now I am wishing that I would of went with my gut instinct to get accident coverage. Sherman recently tore a cruciate ligament in his knee which requires him going to specialist and guess what? Those services I don’t get at cost. We’re talking about thousands of dollars and some of that would of been covered had I gotten pet insurance and it would be well worth the monthly fee.

    Reply
    • Thanks for sharing, Jen
      That’s what finally convinced me – the accidental stuff. At first, I didn’t even think about that and then Sydney pulled a muscle, Rodrigo had his run in with a coyote – those experiences planted a seed.

      Thanks for stopping by!

      Reply
  5. I am SO glad I have pet insurance on my dogs. With their size anything the vet does cost about twice as much (or more) than the average dog. Brinkley just tore her CCL last month and had to undergo TPLO surgery. I have the Accident and Sickness plan through Purinacare. It has a $250 deductible and pays 80%. So if I figure up what we’ve spent so far….

    3466.15 for the vet visits, radiographs, surgery and pain meds and take out the $250 deductible that leaves $3216.15. Of that we are reimbursed 80%, so we will get a check from the insurance company for $2572. Between the deductible and our 20% we end up paying $893.23.

    Heck, even with the pet insurance that’s more than most spend on their pets vet care. These figures don’t even include her follow up radiographs, and additional meds she may need, etc. I think for the $41 a month we pay for the insurance it was well worth it (really in her case since I’ve only had it on her for 5 months!)

    Reply
    • That’s fantastic, Amanda – thanks for sharing the figures; it always helps put things into perspective when we can look at someone’s real life experience. You rock!

      Hugs to the dogs!!!

      Reply
  6. Hi, Kimberly: Excellent article and one that needs to be shared! My niece, Tiffany, and I met you at Bloggy Boot Camp LV. We thoroughly enjoyed your talk and learned so much from you. Thanks for your inspiration and positive attitude. We have nominated you for a Liebster Blog Award, even though you have been blogging more than 6 months. You can read about it on our January 1st post. Keep up the good work – you’re awesome!

    Reply
    • Thank you so much, Carole!! I appreciate the nomination and the nice comments. I just submitted a proposal to speak at BlogPaws and I hope that it’s accepted. Thank you.

      Reply

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