Taking Emotional Distractions out of Pet Insurance Decisions
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If perception is reality then doesn’t logic dictate that the difference between a bad decision and a good one isn’t the choice that’s made but the results of that choice? If you leap out of the way of an oncoming car, you’ve made a smart choice. But if you land in front of another car speeding in the opposite direction, suddenly your decision to jump doesn’t seem as smart.
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 very intelligent man once explained to me that the virtue of a decision can’t be judged on the simplicity of the decision itself but has to take all variables into consideration. Don’t worry, I had the same deer-in-the-headlights look you may have right now when he said it to me. But he went on to clarify things.
“If,” he asked, “I offered you an investment opportunity that could convert $5,000.00 of your dollars into $50,000.00 in ten years, would you take it? Consider that you have about a 50% chance of making that $50k and better odds of making only $30K or $40K. Regardless, you can rest assured that you’ll almost certainly get your full investment back if things don’t work out but you’ll still have to wait 10 years.” I thought about the question and thought, absent any pressing needs or wants, I might take the opportunity if I had disposable cash handy.
“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 smiled at me and then shook his head before explaining that my decision was a bad one made by thousands of hopefully lotto players every day. Though $5 was a paltry investment for such a huge potential payout, the odds were so astronomically stacked against me that the decision was a bad one. Even if I won, the decision wasn’t smart. It was a dumb choice that just happened to result in a good outcome. The $5,000.00 investment, on the other hand, was a smarter choice.
But the point we’re trying to make here isn’t about gambling on lottery tickets or dodging oncoming traffic. What this article focuses on is the sometimes difficult choice we face when considering the value of purchasing veterinary insurance for our pets. If you’re in the market, you already know that it isn’t always a cut and dry decision.
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?
Alternatively, we apply emotions to the choice. If we don’t get health coverage for our pet, does that mean we don’t love it? Are we wrong for assigning a dollar value to the health of our animal?
In both cases these are the wrong approaches and will not lead to a smart decision. Basing the choice on what-ifs is wholly unproductive. No matter how healthy your particular breed may be in general, you can’t predict accidents such as poisons or car accidents.
The second approach is a mistake in that a financial decision should never be grounded purely in emotion. If you can’t afford a monthly fee for health insurance, it has no bearing on the level of affection you feel for your pet. Rather, it’s a simple 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.
Also consider your pet’s age and general health. If it is young and healthy, non-problematic breed then perhaps the choice to purchase pet insurance can be delayed until later in your pet’s life. Just remember the warning that emergencies can and do happen.
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.
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