It is a simple fact that most cats and dogs will require unexpected and potentially costly veterinary treatments at some point in their lifetimes, and many pet owners struggle with funding costly veterinary care and treatment. Pet insurance is a great way of covering the cost of potentially expensive veterinary treatments, but insurance is also a form of reverse gambling, where you ultimately hope that a big payout will not be needed- but still have to keep funnelling money into funding your cover even if your pet never gets sick. Over the duration of a pet’s lifetime, many owners of insured pets find that the overall payout value that they receive from their insurance company far exceeds the value of their paid policies, and so have ‘won’ this particular gamble. However, a significant number of pet owners may find that the opposite is true for them. They might spend many years paying policies, only to find that they never need to make a claim against their payments, or that when they do need to make a claim, their insurance policy does not cover the full cost or that their policy dos not provide coverage for that particular condition. This sums up exactly why taking out pet insurance is a gamble: There are winners and losers, but this is a serious game when the ultimate jackpot is your pet’s health. For many pet owners, the risk: cost benefits of pet insurance simply do not add up for them, and they might seek alternative means of making sure their pet is covered in the event of an accident or incident that requires treatment. This is where self-insurance, a modern name for what is essentially an age-old phenomenon, comes into its own.
In its simplest terms, self-insurance means that the pet owner themselves provide their own insurance against the future cost of veterinary treatments. Self-insurance means not paying out a monthly policy to a third party for which they might potentially never receive any benefits; but it also means that no third party is there to provide a safety net for their pet’s treatment if needed. Instead, people who ‘self-insure’ set by a contingency fund that they pay into on a regular basis, building up a pot of money to be used in the case of an emergency or if veterinary treatment is unexpectedly needed. Basically, it is a savings scheme, specifically earmarked for the future care of their pet’s needs. How self-insurance works in reality is very much down to the individual; be it a case of keeping money in a piggy bank, setting up a designated savings account with a financial institution that pays interest on their savings, or even arranging with their veterinary surgery to pay credit into their pet’s account for future usage. So, is self-insurance a good idea, or not? Again, this very much depends on the person and pet involved, and his or her own unique circumstances. If you are trying to decide if self-insurance is a viable alternative to traditional insurance for you and your pet, consider some of these pros and cons.
The ultimate decision as to whether or not self-insurance is a viable choice for you is, as mentioned, purely a case for the individual to decide. If you are considering cancelling an existing pet insurance policy in favour of self-insurance, it can be a good idea to wait for a year or more until you have built up sufficient funds to cover your pet if you need to pay for treatment yourself, or to keep a contingency fund alongside of traditional insurance coverage. For many pet owners, a combination of traditional insurance coverage and self-insurance, or a contingency fund, is the perfect solution- it does not have to be either/or after all, so don’t rule it out!
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