About two years ago, I had to put down my dog, Sydney. And even though it was clearly time for her, and there was nothing we could have done for her condition medically, it was not an easy thing to do. At the moment of truth, I got the feeling she understood what was happening, and she accepted it. Maybe I’m projecting. If so, I’ll cop to it. You’ve got to have a heart of stone to kill a dog, even for the best reasons, and not feel bad about it.
It’s this wrenching need to care for our pets that created a pet insurance market shortly after World War II. I don’t know a whole heck of a lot about the market, except that traditionally, it has done well in the United Kingdom, where people joke that it is the one place where people can be counted on to like their pets more than other people. (It’s done alright in this country too, though, and I can only imagine that when the economy recovers, all of those people who carry toy dogs with them in purses and such will be in the market for buying Spritzy and Mr. Bigglesworth a health plan that exceeds their own.)
According to comparethemarket.com, a price quote comparison website, over a three-month period earlier this year, people requested three times as many quotes for pet insurance than they did for life insurance. Now, the details on this are sketchy, as the website doesn’t get into its own numbers. So for all we know they had nine pet insurance quote requests and only three for life insurance. But let us assume for the moment that there is a statistically significant sample of data being looked at here. This would be an incredible sign indeed of just how far down the ladder of financial awareness life insurance has fallen.
After all, you can euthanize a pet rather than insure it. And as most pet owners know, over the lifetime of their pet, they probably have at least one really big vet bill ahead of them from when Rover swallows a lugnut or when Misty developes feline leukemia. But given that most people really don’t want to face the awful calculus of determining when it’s cost-effective to cure their pet and when it makes more sense to simply dispose of it, the value of pet insurance becomes apparent.
So much so, it would seem, that it is even an easier sell then insuring one’s own life (or to put it another way, to insure the future of one’s family in case he or she is suddenly removed from this world unexpectedly). This, despite the fact that in the UK, anyway, the pet insurance market seems to be in a spot of trouble. Presumably because of rising costs in veterinary care (see, the cost of healthcare going up doesn’t affect only humans) and claims of excessive use of vet care coupled with arguments over outright fraud, pet insurance rates in the UK took a jump up in the beginning of the year. This dovetailed with ongoing rate increases that purportedly raised the cost of pet insurance by nearly 30% over the last two years, prompting large numbers of people to decline pet insurance altogether, and even two carriers to exit the market.
Unsurprisingly, this went hand in hand with an increased willingness to put pets down rather than pay for costly surgeries. The pure math on that call is easy to make. $2,000 for treating Shep’s rare liver condition or $500 for a new dog altogether? The emotional math, of course, is much, much more difficult. And even still, folks are doing the math anyway.
And even with all of this in the background, pet insurance still is a better draw than life insurance. How is this even possible? I suppose it’s possible when you have chronic under-awareness of how much life insurance people really need, a widespread sense that the group policies people get from work are in some way sufficient financial protection (they never are), and when you have an industry that, quite frankly, seems altogether more interested in selling annuities than it is in selling widows and orphans coverage (I am curious to see if fresh year-end stats from the III will reflect a change in this from last year, but I fairly doubt it.)
This would not bother me so much if I was not so concerned that the industry’s annuities sales efforts are not sustainable in the long run. But despite gains this year, individual life insurance sales remain in a deep trough, and something must be done to make this a product people don’t feel like they have to buy, but a product people actually want to buy. The industry hasn’t done that yet, and as a result, you get a situation where it’s easier to sell insurance for your iguana than it is for your kid’s college education. This puts me in “I laugh because I must not cry” territory, and so I am reminded of that iconic 1973 National Lampoon cover in which a worried pooch sits with a gun to its head in what might be the hardest sell yet to the newsstand audience. I know I have already sounded off on unconventional promotions for this industry in the past week, but what if we took a page from Lampoon and got our pets to sell life insurance to us? Somewhere out there is a crazy cat lady with policies on her pride of tabbies, and not on herself. If this industry cannot convince a person like that to get at least nominal coverage on oneself, then really, what chance does it have selling to anybody else?
Or what if the industry took current insurance-buying habits and turned them on their head? After all, a public more willing to insure its pets over its own breadwinners has got its priorities seriously out of whack. There is no shame in taking people to task for that, even if tut-tutting people into buying your products is distasteful. Putting a pistol to a dog’s head isn’t exactly proper manners, but it still captured the national imagination to great success. Maybe the life and health industry needs to do likewise to wake people up to the value of something they clearly are not taking advantage of. Nothing else appears to be working.