Should You Self Insure Or Take Out Pet Insurance?
That’s the R40,000 question every pet owner needs to ask themselves. Why R40,000? It could cost that much in Vet bills if your dog or cat gets out of the yard and is hit by a car. Of course, you might get lucky and never have a major pet emergency (fingers crossed) but what if you do? Do you have enough spare money lying around to cover a medical emergency? In this article we’ll look at why a pet insurance policy is worth the premiums every month.
At OnePlan Pet our entry level hospital plan policy costs R134 per month. You can add an “Excess Buster” to the plan for an additional R35 a month (that means you don’t have an excess at claim stage).
So, you are in for R169 per month (with the Excess Buster) or R2, 028 per year.
Is it worth the money?
If you have R40,000 lying around for a pet emergency then it isn’t.
But who has R40,000 lying around for a pet emergency? Not too many of us.
Our hospital plan will cover your pet against any accident or illness that requires hospitalisation, at an overall limit of R40,000 per year.
The counter argument of course is that instead of paying R2,028 into a policy, you could just save it and accumulate funds for a rainy day.
Fair point, so let’s have a look at that.
How long will it take you to save R40,000?
If you invested R169 per month (with a 5% annual premium escalation) and you managed to get a 7% annual return on your investment. It would take approximately 11 years to save up R40,000.
That’s a pretty long time!
If you never had a major pet emergency in that period, you would be up R40,000 rather than having spent the money on insurance premiums.
The only problem is that you haven’t factored in what Vet costs will be 11 years from now. It’s safe to say the costs could easily be double what they are now.
Plus, our hospital plans cover R40,000 per annum. If you had two claims like that in an 11-year period, it blows the savings calculation out of the water.
If cash isn’t a problem in your life, then you don’t need insurance for your pet. But if you are going to be financially stretched and might need to reach for your credit card or take out a personal loan, with major interest charges, surely R134 per month will bring great peace of mind?
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Until next time
The Petinsurance team