Taking Emotional Distractions out of Pet Insurance Decisions

Our view or opinions of an outcome often retroactively determine the merits of the decisions we make. Deftly diving out of the way of a speeding car would logically seem to be a smart decision. Landing in the way of another oncoming car, in retrospect, takes smart out of the equation.

Both outcomes resulted from the exact same choice; to dive out of the way of certain death. But in evaluating the results, the first scenario seems to be the product of a smart decision while the second outcome resulted from what seems to be a decidedly bad choice. But does that mean that random fate determines the merits of our decisions in life? Couldn't one say the decision was smart regardless and the outcome simply unfortunate in the latter case?

A conversation with my father helped shed some light on the matter for me. He suggested that the merits of a decision are set at inception regardless the outcome and that fate was simply a random variable. Seeing I didn't fully understand his point, he explained further.

He asked if I would be enticed by an offer that could earn me $50,000.00 in ten years for a meager upfront investment of only $5,000.00. The odds, he explained were only about 50% that I would hit that target and improved if I would be willing to accept a lesser return. I'd have much better odds of realizing $40K, for example. But regardless, the odds of my losing my initial investment were very small. Though I'd have to wait 10 years, I'd be virtually assured of getting at least my initial investment back. Was I interested? I was, but only if I had no other interests in mind for that $5K. My response wasn't enthusiastic.

"OK," he continued, "now what if I told you I might be able to make you $5 million dollars and all you'd have to invest is $5 for the purchase of a lottery ticket?" Well that, I thought, was a no-brainer. I'd hand over the $5 with hardly a thought.

He then deflated my confidence a bit by explaining I'd just made the same bad decision thousands of lottery ticket purchasers make every day. The mistake I was making being the failure to consider the odds in assessing the value of the investment simply because I was so impressed by the potential return relative to the amount I'd have to pay to get in on the deal.

But this isn't about investing or lottery or even dodging traffic. The objective here is weigh the value of purchasing health insurance for your pet. If you've been considering it, you don't need me to tell you that the decision can often be a difficult one.

As with the example of an investment vs. a lottery ticket, we struggle to make a smart decision when it comes to pet health insurance because we're considering an investment in an unknown potential outcome. How will we feel spending hundreds of dollars each year if our pet never requires a costly medical procedure and, instead, dies peacefully of old age? Won't we have made a bad decision and wasted our money?

On the opposite side of the coin, emotions prevail. What if we don't purchase the insurance and wind up unable to afford to pay for an emergency? Will that mean we didn't love our pet enough? Are we wrong for assigning a dollar value to the health of our animal?

Both of these approaches are wrong. The first thought process is a waste of effort. You can't know the future. Your pet may well never need a medical procedure. Perhaps it's a particularly healthy breed. But even the healthiest of breeds can have accidents, eat something it shouldn't have or be hit by a car.

In relying on emotion in the decision making process, the second approach is no better. A financial decision should never be grounded purely in emotion. Your financial circumstances might simply dictate that you can't afford the monthly fee for health insurance. That doesn't mean you love your pet any less, it's just a fact of economics.

Your decision to purchase veterinary insurance should be grounded in sound, rational thought. Take the facts into account and go from there. Consider what you'd face in a health emergency if you didn't have pet insurance. Would your savings carry you through? If you are well off financially and are good at leaving your savings untouched except in emergencies, pet insurance may be completely unnecessary.

Consider your pet's age and potential breed-specific health concerns. If you have a puppy, don't live in a dangerous area with heavy traffic, plan to keep a close eye on your pet when it's outside and have a generally healthy breed, postponing the decision to get health insurance until it is older may be the rational approach. Just don't discount the potential for emergencies in your choice.

Does it make more financial sense to you to pay a monthly fee just in case? For many, the monthly expense of insuring a pet is preferable to the possibility of an unexpected hit to their savings. Job stability, the balance of your savings account and your own tolerance for risk should be the factors that influence your decision.

The bottom line is that you should take the time to honestly assess the facts. Do your research, consider your cash position and make the choice based on what makes sound financial sense. Leave the excitement and emotional highs and lows to day traders.

About the Author

With over 20 years of veterinary and pet care experience, Karsten hopes to help you make sound decisions about veterinary pet insurance. He is a consultant and guest writer for several sites covering general pet health issues, exotic pet insurance and other pet topics.

Article Source: Unique Financial Articles

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