Doggy Finance 101: How Investing In Pet Insurance Outperformed the Stock Market

We did it because we were superstitious.  Our last dog was diagnosed with Addison’s Disease shortly before her second birthday.    We were fortunate enough to be able to afford the medications that she needed for the following 8 years, but when our next puppy came on the scene we had a decision to make – purchase health insurance for the dog (and likely never need it), or not purchase it (virtually guaranteeing that a piano would fall from the sky landing squarely on our dog).   We didn’t want to take the risk, so we opted for the insurance.

It was a silver lining to the trauma we suffered over the past 20 months.   In a split second, our one year old dog ran out into the street and was hit by a car.   It was a complicated, drawn out affair, that without pet insurance would have set us back more than $15K.   As it stands, that initial $240 investment, over the past three calendar years, has had an average annual return of 1098% (and that’s after you factor in a $200 annual deductible, a $240 annual premium, and a 20% co-pay).   Compare that to the Dow Jones Industrial Average (DJIA) – in 2011, the total return was 8.3%; over the past 5 years, 2.3%;  since end-of-year 1932 (i.e., after the crash), 11.1%.   There is no doubt, if your dog is going to get smashed by a piano, you won’t regret your decision to purchase pet health insurance.

And as a well deserved plug, we having nothing but great things to say about the insurance company we picked.   Through a 3-day stint in an emergency animal hospital, and six (count ‘em) surgeries to follow, Petplan pet insurance never flinched.   They were polite, prompt and they didn’t raise our rates.  What seemed like a difficult decision 3 years ago now is a no brainer.   Pet insurance is an investment that belongs in everyone’s portfolio.

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