In his Wealth Matters column for the New York Times, Paul Sullivan published an interesting article titled "Thinking Ahead for Pets, Including Insurance and Trusts". Sullivan wrote about the high costs of pet care and cautiioned about pet insurance policies; he said, "pet insurance was... [an] issue that [his] readers were upset about. In many cases, pet owners do not understand what is covered by a policy and end up frustrated." He pointed out that the leading pet insurers charge low premiums, but usually do not cover the most common pet ailments; also, these policies usually contribute a fixed amount to covered procedures that often fall short of the full price of procedure.
He also noted that other pet insurance models are available; for example, PurinaCare "prorates its premiums based on the cost of care where the pet lives." Premiums for this plan are higher, but the policy covers 60-80% of the cost of a procedure.
Sullivan concluded with an analysis of pet trusts. Many people want to leave their pets an inheritance to ensure that they are cared for; Sullivan stated that, as with trusts for human heirs, "what matters is "donor intent" -- that the wishes of the person setting up the trust are clearly described and carried out. The difficult part can be enforcing those wishes." He recommended that families include "a provision whereby a veterinarian needs to certify periodically that that animal is still healthy and alive."
Posted by Joshua Hock, Associate Editor, Wealth Strategies Journal
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