The Growing Value of Pet Health Insurance

The pet insurance industry is expected to grow 33% in 2015 according to the APPA

by Chris L. Middleton

There are several reasons why brokers should consider offering one of the fastest-growing voluntary benefits in the market – pet insurance.  The pet insurance industry is expected to grow 33% in 2015, according to the American Pet Products Association (APPA). The industry is estimated to reach $650 million this year and over $870 million in 2015.

Pet insurance, once deemed a luxury for wealthy pet owners, is now essential to providing financial protection from escalating pet-care costs. Pets are living longer thanks to medical innovations that rival treatments for their human counterparts. But many pet owners can’t afford expensive care. Pet health insurance can bridge the gap between the rising cost of pet care and the ever-tightening family budget.

Pet Insurance Is a Popular Benefit

Pet insurance is becoming a natural extension of employee health care as more and more employees view their pets as family members. Ninety-one percent of pet owners consider pets to be family members, according to 2012 Harris Poll. According to a survey by Pets Best Insurance Services, a majority of the agency’s policyholders have no children living in the home. Many pet owners now view their pets as their children.

How Pet Insurance Works

Pet insurance is a low-cost, direct benefit than employers can to offer pet families. Pet insurance is a strange animal since it acts as health insurance for accidents and illnesses, but it is actually a property and casualty product. Plans vary in deductible, co-insurance, and annual or per-incident limits, but almost all pet insurance companies exclude pre-existing conditions. A number of insurers offer riders for coverage of routine care. Typically, pet owners pay veterinarians directly for treatment, and then submit claims for reimbursement. Several factors determine the total premium, such as species, age, breed, and location. Some advertised group benefits are discount or preventative care programs, which are often confused with comprehensive medical plans for pets.

Pet Insurance and Health Insurance are Great Companions 

Pet health insurance is a great complement to human health insurance. Employers benefit when they can promote healthy lifestyles by keeping employees engaged with their pets. Pets not only provide love and companionship, but they also reduce stress and increase healthy activity for their owners. Pet owners are typically more active. A Pets Best customer survey reveals that 73% of the agency’s policyholders walk their pets every day.

Lower stress offers a variety of health benefits, such as lower blood pressure, better cholesterol levels, and improved mental health, according to the Centers for Disease Control and Prevention. And we all know that healthy employees take fewer sick days. The presence of a pet can have a positive effect on people who are hospitalized or recovering from an illness. Pets are used in therapy for trauma victims and soldiers returning from combat.

New Products  

Offering pet insurance is a terrific way for brokers to differentiate the menu of voluntary products they offer to their corporate clients. Employers are looking for creative ways to retain talented staff while brokers are seeking creative products to bolster retention. Employers are noticing this trend on the direct-to-consumer side. More than 1 million pets are insured in North America, according to the Pet Insurance Assn. Selling pet insurance directly to consumers is not a significant revenue stream for brokers, but offering it as an employee benefit has its advantages. Group coverage offers collective pet insurance discounts without the administrative headaches or expense. Employees typically enroll online, with no open enrollment period or minimum participation levels. Credit and debit cards are the favored payment methods over payroll deduction. The pet insurance provider handles premium collection and renewals. Once claims are submitted, review and reimbursement can take as little as two to five days. Clients can have access to powerful online tools to enroll and select coverage. Brokers can use the same technology to offer an enticing benefit to thousands of potential customers with minimal effort.

How to Offer Pet Insurance to Your Clients

Because pet insurance is an individual insurance product, it’s very easy for employers to offer pet insurance as a voluntary benefit. If employees choose a direct-pay option, they can enroll at any time, and there are no minimum participation requirements. q

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Chris L. Middleton is president of Pets Best Insurance Services, LLC. Pets Best, one of the largest U.S. pet insurers, has been offering pet insurance to dogs and cats since 2005. The agency offers a free and turn-key setup to add pet insurance as an employee benefit. Employees can enroll at any time and pay Pets Best directly with a credit card, direct debit or through payroll deduction. For more information about Pets Best, please visit www.petsbest.com.