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Health

Do You Really Need Pet Insurance?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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More pet owners are buying insurance to cover the cost of accidents, illness and routine checkups, but that hasn’t made it any easier to decide if it’s really worth the extra expense or not.

Nearly 1.8 million pets were insured in the United States and Canada in 2016, which is an 11.5 percent increase from 2015, according to the North American Pet Health Insurance Association (NAPHIA).

Still, that represents a mere fraction of the estimated 400 million pets living in U.S. households today.

One factor holding pet owners back from investing in an insurance plan for their pet could be cost. Annual premiums for coverage can range from $163 (accident-only coverage) to $496 per pet (for a plan that covers both accidents and illnesses), according to the NAPHIA. Those costs can become much higher depending on the age of your pet, type of animal and where you live.

It’s also common for pet insurance plans to come with deductibles, so pet owners could easily still face hefty medical bills even with insurance.

With the increase in how much Americans spend on their pets — from $60.28 billion in 2015 to $66.75 billion in 2016 to an expected $69.36 billion in 2017 — as well as insurers offering coverage, it’s important to determine if insurance is a smart financial option for your furry friends.

What Pet Insurance Covers — and What It Doesn’t

Depending on the insurer and how much you’re willing to pay, you can get several different tiers of coverage for a pet.

The most basic plans offer one or the other: wellness visits or accident-only coverage (similar to a catastrophic health care plan for us humans). At a more comprehensive level, plans can cover illnesses and wellness visits as well as routine checkups. Prices also vary based on what type of pet you have.

For example, Nationwide offers a comprehensive dog insurance plan that covers wellness exams and visits, accidents, hereditary conditions, chronic conditions, and pay back up to 90 percent on some veterinary bills. The price starts at $65 per month or $780 per year. You can pay less and get less coverage.

Their so-called “major medical plan” covers accidents and illnesses but doesn’t offer coverage for wellness exams. The plan starts at $35 per month.

And at the bottom rung of coverage is a wellness plan starting at $18 per month and offering basic coverage for things like flea and heartworm prevention and vaccinations.

It make take time, but it’s important to comparison shop between different pet insurers before you decide on a plan. Sites like petinsurancequotes.com offer ways to compare insurers and plans.

What pet insurance doesn’t cover

While pet insurance can cover many emergencies, the type of plan you purchase will determine if the insurance pays for medical care beyond accidents. Wellness visits and vaccines are not covered by Trupanion, for example, which insures only cats and dogs. Grooming and nail trimming are not included in Nationwide’s wellness package.

While it’s now law that insurers can’t deny humans insurance based on pre-existing conditions, the same perk isn’t enjoyed by pets. Pet insurers such as Trupanion and Nationwide do not cover pre-existing conditions that the pet had before coverage began. Nationwide limits coverage for hereditary disorders by breed — such as cardiac arrhythmia in Boxers — in some plans, but offers full coverage for those conditions in its comprehensive Whole Pet with Wellness plan.

For this reason, the best time to purchase pet insurance is when the pet is young because there is little chance of pre-existing conditions. The average age of insured cats and dogs was 4.86 years in 2016, according to NAPHIA.

When Pet Insurance Makes Sense

In 2016, Americans spent $66.75 billion on pets, according to data from the American Pet Products Association. Of that, Americans spent $14.71 billion on pet supplies and over-the-counter medicine and $15.95 billion on vet care alone.

“Now people are demanding more for their pets,” says Dr. Simon Platt, a veterinary neurologist and professor at the University of Georgia College of Veterinary Medicine.

Insurance appeals to pet owners who prefer to pay a monthly cost for future health expenses instead of doling out hundreds, or even thousands, of dollars when care is needed.

When Destin Miller’s mixed border collie, Ozil, had gastric problems, her pet insurance from Trupanion covered $320 of the $350 bill for medication, fluids, blood work, and 24 cans of special dog food. The $30 that Trupanion did not cover were the dog’s two exams.

“They were all approved … extremely quickly,” says Miller, 23, a graduate student at the University of Georgia in Athens, Ga.

Miller says it is easier for her and her fiancé to pay about $80 per month in pet insurance because she knows it could help cover greater expenses when her dogs are sick.

“It’s a nice safety net,” she says.

In 2016, the average claim amount paid for accident and illness plans was $263 in the United States, according to the NAPHIA 2017 report.

When deciding whether or not to purchase pet insurance for your animal, there are several factors to consider other than cost:

  • Breed:Know the risks and medical conditions associated with your breed, such as if your dog is likely to have diabetes, to determine if it will be covered or if the level of coverage will be enough for your pet’s care now or in the future. Also, if you have a purebred or pedigree dog or cat, it may have inherited medical conditions that could be considered high risk and too expensive to treat.
  • Age: Typically, your pet needs to be at least eight weeks old to be covered, according to NAPHIA. But you also don’t want to wait too long to get coverage because your pet may be too old for a company to insure because of the potential for high costs of care with age.
  • Waiting period: For most policies, you will need to wait 10 to 30 days for the insurance to kick in, according to NAPHIA.
  • Number of pets: Some insurers may limit the number of pets you can insure, particularly if they are considered “high risk,” according to the American Veterinary Medical Association (AVMA). But others may give you a discount if you are insuring more than one pet.

How much should I pay for pet insurance?

Insurance companies provide a variety of plans. Pet insurance can vary due to different factors such as species, geographic location, age and gender.

Don’t simply purchase the plan with the cheapest premium. Look at the deductible as well, because that’s how much you’ll have to pay out of pocket before your insurance kicks in. You should also consider how much you are paying for your pet’s care today and how much care you anticipate your pet will need in the future. Paying for a more expensive plan may be worth the money if you make several visits to the vet each year.

Trupanion allows its customers to choose their own deductible from $0 to $1,000, which allows pet owners to choose a premium that works with their budget, says Emily Coté, director of customer marketing for Trupanion, a Seattle-based pet insurer.

For example, Nationwide offers these examples: Coverage for a small mixed-breed puppy, under the age of one and located in San Diego, Calif., could cost $17.75 a month for a Wellness Basic plan from Nationwide or $49.94 per month with Nationwide’s Whole Pet with Wellness plan. Nationwide, after an annual $250 deductible, will pay up to 90 percent of all accidents.

For a kitten under the age of one, the Wellness Basic plan would cost $12 a month, and Nationwide’s Whole Pet with Wellness plan would be $35.25.

“People want that peace of mind,” Coté says. “It’s easier to budget that monthly amount and not have to make medical decisions due to finances.”

Where to shop for pet insurance

While pet insurance has been in the United States for about 35 years, the awareness and interest is much smaller than their European — most specifically British — counterparts, say insurers and veterinarians.

Platt says when he worked in the United Kingdom, he would fill out three to four insurance claim forms a day. Platt says he has filled out only three to four claims while living and working in the United States the past 11 years.

“I now see some major household insurance names offering it,” he says.

Shop around and compare rates. More than a dozen companies offer pet insurance, with some under brands and entities with names like Pet Protect and Nuzzle, based on a list of NAPHIA members and a list of companies compiled by the AVMA. Providers include major home, auto and life insurers, such as Nationwide and Geico, while some companies, such as Trupanion, PetFirst, and Healthy Paws, specialize in insuring animals. It’s important to get quotes from insurers and compare coverage yourself to make sure you’re getting the best rate.

Free trials from pet shelters. Pet shelters also sign up owners for insurance, typically by offering a free trial for the first 30 days. However, after the trial, you could be charged unless you cancel the policy. Discount membership clubs, such as Sam’s Club with PetFirst Pet Insurance, also offer pet insurance.

Your employer. Some companies, such as Deloitte, Microsoft, and Chipotle Mexican Grill offer pet insurance as an employee benefit. See if your employer offers a policy.

 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Marena Galluccio
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Marena Galluccio is a writer at MagnifyMoney. You can email Marena here

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Featured, Health

5 Ways to Keep Medical Debt From Ruining Your Credit

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Your physical well-being isn’t the only thing at stake when you go to the hospital. So, too, is your financial health.

According to the Consumer Financial Protection Bureau, more than half of all collection notices on consumer credit reports stem from outstanding medical debt, and roughly 43 million consumers – nearly 20% of all those in the nationwide credit reporting system – have at least one medical collection on their credit report.

Now, you might be inclined to think that, because you’re young or have both a job and health insurance, medical debt poses you no risk. Think again. According to a report from the Kaiser Family Foundation, roughly one-third of non-elderly adults report difficulty paying medical bills. Moreover, roughly 70% of people with medical debt are insured, mostly through employer-sponsored plans.

Not concerned yet? Consider that a medical collection notice on your credit report, even for a small bill, can lower your credit score 100 points or more. You can’t pay your way out of the mess after the fact, either. Medical debt notifications stay on your credit report for seven years after you’ve paid off the bill.

The good news is that you can often prevent medical debt from ruining your credit simply by being attentive and proactive. Here’s how.

Pay close attention to your bills

Certainly, a considerable portion of unpaid medical debt exists on account of bills so large and overwhelming that patients don’t have the ability to cover them. But many unpaid medical debts catch patients completely by surprise, according to Deanna Hathaway, a consumer and small business bankruptcy lawyer in Richmond, Va.

“Most people don’t routinely check their credit reports, assume everything is fine, and then a mark on their credit shows up when they go to buy a car or home,” Hathaway said.

The confusion often traces back to one of two common occurrences, according to Ron Sykstus, a consumer bankruptcy attorney in Birmingham, Ala.

“People usually get caught off guard either because they thought their insurance was supposed to pick something up and it didn’t, or because they paid the bill but it got miscoded and applied to the wrong account,” Sykstus said. “It’s a hassle, but track your payments and make sure they get where they are supposed to get.”

Stay in your network

One of the major ways insured patients wind up with unmanageable medical bills is through services rendered – often not known to the patient – by out-of-network providers, according to Kevin Haney, president of A.S.K. Benefit Solutions.

“You check into an in-network hospital and think you’re covered, but while you’re there, you’re treated by an out-of-network specialist such as an anesthesiologist, and then your coverage isn’t nearly as good,” Haney said. “The medical industry does a poor job of explaining this, and it’s where many people get hurt.”

According to Haney, if you were unknowingly treated by an out-of-network provider, it’s would not be unreasonable for you to contact the provider and ask them to bill you at their in-network rate.

“You can push back on lack of disclosure and negotiate,” Haney said. “They’re accepting much lower amounts for the same service with their in-network patients.”

Work it out with your provider BEFORE your bills are sent to collections

Even if you’re insured and are diligent about staying in-network, medical bills can still become untenable. Whether on account of a high deductible or an even higher out-of-pocket maximum, patients both insured and uninsured encounter medical bills they simply can’t afford to pay.

If you find yourself in this situation, it’s critical to understand that most health care providers turn unpaid debt over to a collection agency, and it’s the agency that in turn reports the debt to the credit bureaus should it remain unpaid.

The key then is to be proactive about working out an arrangement with your health care provider before the debt is ever sent to a collection agency. And make no mistake – most providers are more than happy to work with you, according to Howard Dvorkin, CPA and chairman of Debt.com.

“The health care providers you owe know very well how crushing medical debt is,” he said. “They want to work with you, but they also need to get paid.”

If you receive a bill you can’t afford to pay in its entirety, you should immediately call your provider and negotiate.

“Most providers, if the bill is large, will recognize there’s a good chance you don’t have the money to pay it off all at once, and most of the time, they’ll work with you,” Dvorkin said. “But you have to be proactive about it. Don’t just hope it will go away. Call them immediately, explain your situation and ask for a payment plan.”

If the bill you’re struggling with is from a hospital, you may also have the option to apply for financial aid, according to Thomas Nitzsche, a financial educator with Clearpoint Credit Counseling Solutions, a personal finance counseling firm.

“Most hospitals are required to offer financial aid,” Nitzsche said. “They’ll look at your financials to determine your need, and even if you’re denied, just the act of applying usually extends the window within which you have to pay that bill.”

Negotiate with the collection agency

In the event that your debt is passed along to a collection agency, all is not immediately lost, Sykstus said.

“You can usually negotiate with the collection agency the same as you would with the provider,” he said. “Tell them you’ll work out a payment plan and that, in return, you’re asking them to not report it.”

Most collection agencies, according to Haney, actually have little interest in reporting debt to the credit bureaus.

“The best leverage they have to get you to pay is to threaten to report the bill to the credit agencies,” he said. “That means as soon as they report it, they’ve lost their leverage. So, they’re going to want to talk to you long before they ever report it to the bureau.

“Don’t duck their calls,” he added. “Talk to them and offer to work something out.”

Take out a personal loan

Refinancing your medical debt into a personal loan is another move you can consider making, particularly if you can get a lower interest rate than you could with a credit card, and you aren’t able to secure a 0% credit card deal. Peer-to-peer lender LendingClub has an APR starting at 6.95% and Prosper starts with an APR as low as 6.95%, and LendingClub‘s origination fee is 1.00% - 6.00%.

Even better, SoFi offers personal loans at a APR as low as 5.99% and has no origination fee (although you do need a relatively high minimum credit score to get a loan, at 680).

MagnifyMoney’s parent company, LendingTree, features a handy personal loan tool* where you can shop for the best loan for you.

*You may or may not be matched with any lender mentioned in this article. Based on your creditworthiness, you may be matched with up to five different lenders in our partner network.

Bottom line

Dealing with medical debt can be particularly stressful, as you have to worry about money matters along with managing health issues. However, having medical debt does not have to spell disaster. If you follow one or more of the steps above, you should be able to keep your finances healthy.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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How Weight Loss Helped This Couple Pay Down $22,000 of Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Photo courtesy of Brian LeBlanc

Brian LeBlanc was fed up. The 30-year-old policy analyst from Alberta, Canada, had struggled with his weight for years. At the time, he weighed 240 pounds and had trouble finding clothes that fit. He decided it was time to change his lifestyle for good.

LeBlanc started running and cutting back on fast food and soft drinks. He ordered smaller portions at restaurants and avoided convenience-store foods. About a year into his weight-loss mission, his wife Erin, 31, joined him in his efforts.

“The biggest change we made was buying a kitchen food scale and measuring everything we eat,” Brian says. “Creating that habit was really powerful.”

Over two years, the couple shed a total of 170 pounds.

But losing weight, they soon realized, came with an unexpected fringe benefit — saving thousands of dollars per year. Often, people complain that it’s expensive to be healthy — gym memberships and fresh produce don’t come cheap, after all. But the LeBlancs found the opposite to be true.

Erin, who is a payroll specialist, also managed their household budget. She began noticing a difference in how little money they were wasting on fast food and unused grocery items.

Photo courtesy of Brian LeBlanc

“Before, we always had the best intentions of going to the grocery store and buying all the healthy foods. But we never ate them,” she says. “We ended up throwing out a lot of healthy food, vegetables, and fruits.”

Before their lifestyle change, Brian and Erin would often eat out for dinner, spending as much as $80 per week, and they would often go out with friends, spending about $275 a month. Now, Brian says if they grab fast food, they choose a smaller portion. Now they might spend only $22 on fast food per month, instead of over $200.

What’s changed the most is how they shop for groceries, what they buy and how they cook. Brian likes to prep all his meals on Sunday so his lunches during the week are consistent and portion-controlled. They also buy only enough fresh produce to last them a couple of days to prevent wasting food.

Losing weight — and student loan debt

Photo courtesy of Brian LeBlanc

Two years after the start of their weight-loss journey, they took a look at their bank statements to see how their spending had changed. By giving up eating out and drinking alcohol frequently, they were spending $600 less a month than they used to, even though they’ve had to buy new wardrobes and gym memberships.

With their newfound savings, the LeBlancs managed to pay off Brian’s $22,000 in student loans 13 years early. Even with the $600 they were now saving, they had to cut back significantly on their budget to come up with the $900-$1,000 they aimed to put toward his loans each month. They stopped meeting friends for drinks after work, and Erin took on a part-time job to bring in extra cash. When they needed new wardrobes because their old clothing no longer fit, they frequented thrift shops instead of the mall.

When they made the final payment after two years, it was a relief to say the least.

Now the Canadian couple is saving for a vacation home in Phoenix, which they hope to buy in the next few years, and they’re planning to tackle Erin’s student loans next. They’re happy with their weight and lives in general, but don’t take their journey for granted.

“There were times we questioned our sanity, and we thought we cannot do this anymore,” says Erin. But they would always rally together in the end.

“There are things that are worth struggling for and worth putting in the effort,” Brian says. “Hands down, your health is one of those things.”

Other Ways Getting Healthy Can Help Financially

Spending less on food isn’t the only way your budget can improve alongside your health. Read below to see how a little weight loss can tip the scales when it comes to your finances.

  • Spend less on medical bills. Health care costs have skyrocketed over the past two decades, but they’ve impacted overweight and obese individuals more. A report on the “state of obesity” in America found that obese adults spend 42% more on healthcare per year than those of normal weight.
  • Buy cheaper clothes. Designers frequently charge more for plus-size clothing than smaller sizes. Some people claim retailers add a “fat tax” on clothes because there are fewer options for anyone over a size 12. It might not be fair, but it’s the way things are.
  • Save on life insurance. Your health is a huge factor for life insurance rates. Annual premiums for a healthy person can cost more than for someone who is overweight, because BMI (body mass index) may be a factor for determining pricing.

Getting Healthy for Cheap

Still worried that an active lifestyle will require you to spend more money? Here are some tips on keeping costs low while you improve your lifestyle.

  • Get a family membership. Gyms often provide a discount if you sign up for a family membership instead of an individual one. Most of these deals are only beneficial for households with children, but some might offer a lower price if you sign up with a spouse or partner. Always ask the gym about any special deductions they might have.
  • Skip the fancy gym. Many would-be exercisers skip the gym pass because they assume it will be expensive. Before you give up, call around and compare prices. Try your local YMCA, as they often have income-based membership.
  • Shop at thrift stores. Finding inexpensive workout clothes can be another barrier to exercising. Who wants to spend $75 on yoga pants? Don’t visit the mall for your new duds. Your local thrift shop or consignment store will have running shorts and tank tops for only a few dollars. Secondhand clothes also make more sense if you’re in the midst of losing a lot of weight and changing sizes frequently.
  • Go vegetarian. Meat is often the most expensive item in your grocery cart. If you’re trying to eat healthier and concerned about money, try vegetarian protein options like lentils, beans,and quinoa. You don’t have to fully adopt the vegetarian lifestyle, but just reducing your meat intake can have a significant impact on the grocery bill.
  • Buy frozen produce. Frozen produce is often as healthy as buying fresh, but it can be significantly less expensive. Frozen veggies and fruit also last longer, decreasing the risk of food waste. You can often find coupons, and the long shelf life makes it easy to stock up if there’s a sale on your favorite green beans.
  • Cut back on eating out. Ever wonder how restaurant-quality food can be so much better than what you make at home? You guessed it: more salt, more sugar, more butter and more fat. By limiting the meals you eat out, you’ll avoid all that — as well as those outrageous restaurant markups. If you do eat out, you can do your best to pick the healthy choice. You may also choose to take advantage of cashback credit cards that may reward you for your healthy dining out.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Zina Kumok
Zina Kumok |

Zina Kumok is a writer at MagnifyMoney. You can email Zina here