Pet Insurance, Cancer Insurance and Discounted Dental Plans: A Worthy Investment?

Pet insurance. Cancer insurance. Discount dental plans.

You’ve likely heard about all of the above options, but if you haven’t purchased one, you may not fully understand how they work, what they cover, what they don’t cover, and ultimately, if they’re worth the cost. Here’s a brief explanation.

Pet Insurance

Pet insurance has become quite popular in recent years, as pet ownership numbers continue to rise. In 2014, less than 1 percent of the 170 million plus dogs and cats were covered by insurance, but those rates have continued to rise as more pet owners opt in. Until recently, the insurance worked on a reimbursement level, so pet owners were required to pay vet bills, and then submit those bills for reimbursement.  And while it’s nice to receive reimbursement, this model did nothing to help those that are unable to cover unexpected pet expenses upfront. Recently, some plan providers have introduced a direct reimbursement model, where payment is sent directly to the veterinarian’s office, eliminating the need to repay.

In an analysis done by Consumer Reports, it’s estimated that the cost of the premium for the life of your dog or cat will likely exceed the amount of vet bills you may incur during the life of your pet.  And while catastrophic incidents do occur, you may be better off putting a little money aside for unexpected expenses rather than paying a monthly insurance premium.

Cancer Insurance

It’s hard to quantify the need for cancer insurance in simple terms, but for those with a family history of cancer, it may be a worthwhile investment. As a supplemental insurance, cancer insurance does not cover medical bills directly. Instead, it pays you a set amount of money, usually upon diagnosis, and later for additional services rendered, such as radiation and chemotherapy, as well as payment for a hospital stay, at-home nursing care, or other expenses incurred during treatment. Cancer insurance premiums usually range between $20-$50 per month, and may include a variety of exclusions, so be sure to review any potential coverage prior to purchasing. Also, keep in mind that you cannot purchase cancer insurance if you’ve had cancer in the past, or have just received a cancer diagnosis.

Discount Dental Plans

Standard dental insurance premiums can run between $30 to $70 per month to cover a family of four, with most plans allowing only $1,500 to $2,000 in annual expenses for each person insured.  The insured is also responsible for any deductibles and co-pays, making dental insurance not quite the benefit that it seems.

That’s why discount dental plans can be so useful. You’ll pay a flat fee either monthly or yearly, with all discounts available on day one. Savings can vary between plans, but most plans offer between 10 to 60 percent off approved dental procedures. You cannot use your discount plan with any insurance concurrently, but once you reach your plan max, you can then use your discount plan.

The biggest drawback to discount plans is that you have to use a participating dental provider, so your current dentist may not be on the list of approved providers. But for those seeking out a new dentist, there are no real drawbacks to purchasing a discount dental plan.

*The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.