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Should You Buy Pet Insurance?


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October 04, 2020

Should You Buy Pet Insurance?

With the coronavirus having kept most of us at home over the past seven months, we are learning a lot about our emotions, our families, and our spending habits. While families flock from urban locations and existing home prices hit record highs, one financial area many people have not talked about are pets. That's right…. pets.

Animal rescues and shelters have seen a spike in people fostering and adopting dogs and cats during the pandemic. The Society for the Prevention of Cruelty to Animals Los Angeles recently said that adoptions were double their usual rate in late June, with 10 to 13 a day. On the East Coast, one in four people who began fostering pooches "temporarily" from the Animal Care Centers of NYC at the beginning of the pandemic had adopted them permanently by late June; usually, only one in 10 opt to turn their foster home into a forever home. The ACC of NYC said in March that it had received more than 5,000 applications to foster pets in just a couple of weeks.

All of this news means that many families across America have now added a new line item to their overall household budget, the cost of owning a pet. Historically speaking, the national averages for pet ownership ranges between a cost of $54 a month and $176 a month depending on what type of pet you have, the breed of the pet, and the where you live in the United States. However, in a recent study, almost 50% of pet owners say they spend more than $3,000 a year on their pet mostly due to a lack of really budgeting in their pets as a household expense.

When you consider your overall risk management plan for your family finances, you often look at areas including health, dental, vision, life, disability, and long-term care insurance. But, in recent years, there is a new type of coverage called pet insurance. Is it worth it for you take advantage of a pet insurance policy?

Remember, buying insurance is about investing money to transfer risk. It's not about spending money. That's a huge mistake families make when they look through the lens of buying insurance. What you are doing is doling out smaller sums of money in order to protect potential large, unexpected outlays of cash. Most pet insurance plans cost in the range of $30 to $50 a month depending on the type of pet you have and the breed of the pet. Not unlike your health insurance, you will need to closely examine the deductibles, the co-pays, and the out of pocket maximums for items such as elective surgeries before you purchase the coverage. Here are a few items to be reviewing if you are considering buying pet insurance.

A pet policy primarily covers accidents and illnesses. Let's say your pet gets injured in a car accident, gets poisoned, suffers an infection, or develops a chronic illness. In these situations, pet insurance will foot the medical bill. But only after you have met your deductible. You would normally have to buy a wellness plan if want routine check-ups covered.

Most policies will have some waiting period for accidents or illnesses. So, if your cat has a fight and suffers major injuries, you will not be able to buy a policy and then get it covered. Most policies also will not cover genetic disorders or hereditary conditions such as heart disease. It is important to read the fine print.

Most policies have an age cap. The general age cap is 14 to 15 years. This means if you have an older pet, you may not be able to get coverage at all. Just like health insurance, you should expect that your premiums will increase every year on the policy.

How is your cash reserve? Remember, the main reason people by insurance is to guard against those financially catastrophic events. If you are a pet owner and don't have a cash reserve, that may make it more appealing to buy a policy so a major surgery for your pet doesn't wipe out your cash reserve or even put you into debt. In general, there is not a 'network' of providers, but you may want to check with your vet to be sure they take the pet insurance you are going to purchase.

It's open enrollment season, so you might get a bargain on your pet insurance if your employer offers it as a supplemental benefit for their overall benefits package. In the end, like all insurance, getting pet insurance is a personal choice. If you are worried about the risk of large expenses or outlays for surgeries or other procedures, then it may be a good idea to consider buying this as part of your overall risk management plan.

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


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About the author

Ted Jenkin in a suit and tie

Ted Jenkin

CEO and co-Founder


My friends and family all think I'm a workaholic, but I say I'm just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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