The truth about coverage: Is pet insurance worth paying for?
Pepper the beagle was four when her family insured her as she has liver issues and they anticipated her healthcare expenses to rise. PHOTO: COURTESY OF FELICIA LIM
SINGAPORE – When the Lim family's pet beagle, Pepper, was four, they decided to insure her as she has liver issues.
'We knew it would be challenging or expensive if we got her insured after her condition worsened, so we had to be quick about it,' said administrative executive Felicia Lim, 57.
'There were limited policies provided by the insurance company, so I just went with what the agent recommended, which was the basic plan.'
Today, at eight years old, Pepper makes frequent and costly visits to the vet, undergoing regular blood tests and long-term medication.
When Mrs Lim bought insurance for Pepper, there was only one company – Liberty Insurance – that offered to insure pet dogs. On the advice of her insurance agent, she chose the most basic plan, which provides partial coverage of medical expenses such as surgical and non-surgical treatments, for an annual premium of almost $400.
'We were not able to predict if her condition will worsen as she ages, so having her insured may help alleviate some financial pressure with future medical care ,' Mrs Lim said, adding that the family is worried the insurance coverage might not be enough.
Under the Liberty Pet Care plan, the claim limit for veterinary expenses is $700 for non-surgical treatment and $2,500 for surgical treatment, according to the insurer's website.
With more people treating their pets like family members, animal medical treatment expenses can soar, just like healthcare for humans. Expensive diagnostic scans, surgery and cancer treatments are routinely offered – and accepted – escalating costs.
In one case, a couple emptied their savings and sold their Housing Board flat in 2023 to clear the credit card loans they took for their dog's medical bills, but the French bulldog did not survive.
To mitigate the burden of unexpected veterinary expenses, pet owners are turning to insurance.
Today, there are six insurers – including Income and AIA – offering coverage for dogs and cats.
Most help cover fees for veterinary services such as consultations, medications, surgeries, and hospitalisations. One or two policies offer only lump-sum critical illness coverage, treatment after accidents, and cremation or burial expenses if the animal dies due to an accident.
A few plans only cover accidental injury and third-party liability, which applies when the pet causes injury to someone or damage to someone else's property.
Silversky Protect, underwritten by MSIG, was the latest to join the furry fray in December 2024.
Like the other pet insurance plans, Silversky Protect offers pet owners essential coverage that typically includes hospitalisation, surgery, vet visits, and prescription medication for medical conditions arising from accidents and illnesses. It also provides coverage for post-surgery treatment and third-party liability, according to the MSIG website.
For instance, policyholders can choose their preferred vet clinic for treatment, and coverage for hospitalisation and surgery goes up to $13,000. No clinical examination is required to qualify for coverage, and a no-claim discount of up to 15 per cent is available, based on the website.
One of the highest surgical payout is from Tiq by Etiqa, which offers up to $15,000 for surgical expenses under its premier-tier plan. Although other insurers may offer optional coverage such as chemotherapy or pet boarding, their base surgical coverage might not be as high as Tiq's.
When buying pet insurance, there is no one-size-fits-all policy, said Assistant Professor Wei Pengyu from the Division of Banking and Finance at NTU's Nanyang Business School.
'Each insurer offers a different mix of coverage and premiums. Some offer better protection, such as lifetime coverage, low deductibles, and high annual limits, but may fall short on affordability,' he said.
'A good policy should strike a balance between coverage and affordability, and have clear terms and a smooth claims process. What's `better' depends on the pet's care needs and the owner's budget and expectations.'
Pet owners should consider what they want from the policy, and how much they can afford to pay to have the coverage.
For instance, most policies in Singapore will cover pets up to nine years of age, but there are some that continue coverage beyond this age – sometimes with revised terms or additional premiums.
Lifelong coverage may seem attractive, 'especially as healthcare costs typically spike in a pet's later years when chronic conditions emerge', noted Prof Wei.
But plans with lifetime renewal are more expensive and may impose increasing deductibles or co-payments as the pet ages. They may also impose more exclusions and lower claim limits as the pet gets older, he said.
The real value of a pet insurance plan lies in its coverage during a pet's younger and middle years, said Dr Lee Yen Teik, a senior lecturer in the Department of Finance at the NUS Business School.
This is primarily because premiums tend to be lower during those years and pre-existing conditions are less likely to be excluded. As pets age, their risk of developing health issues increases, leading to higher insurance costs and potentially limited coverage options, much like what is seen in human health insurance.
Pet owners should also look at what the policy excludes.
For instance, congenital conditions, which may surface only after the pet has been adopted, can incur large, unexpected bills. Some policies will cover congenital conditions, while others will not.
'However, inclusion of congenital cover usually comes at a higher premium or with required vet assessments. While it is a plus, it's not necessarily the right choice for everyone. It is the trade-off between coverage and affordability,' Dr Wei said.
Agreeing, Dr Lee said the catch here is that the policies 'may require a 12-month waiting period or a vet check-up before coverage for conditions like cherry eye or hip dysplasia actually starts'.
The waiting period ensures that a condition does not already exist at the time of enrolment, which will help insurers mitigate the risk of covering pre-existing illnesses.
Cherry eye is a condition in which a dog's tear gland in the third eyelid slips out of place, appearing as a red, swollen lump in the corner of the eye. Hip dysplasia, which is more common in larger breeds such as Labradors, occurs when the hip joint is loose or malformed, leading to pain, inflammation, and arthritis over time.
'If your pet develops the issue during that wait, it likely would not be covered. So, if you have a breed prone to such issues, enrolling them very young is absolutely key to getting that protection,' he said.
Dr Wei advised pet owners to enrol early, as many plans stop accepting new applicants once pets reach nine years old. He also urged owners to read the terms carefully to ensure that the policy coverage matches their pet's potential vet care needs. If the budget allows, they should choose lifetime and congenital cover which provides more robust protection.
Dr Lee advised pet owners not to be swayed by high payouts alone.
'A $15,000 overall limit means little if the specific conditions your pet's breed is prone to, such as hip dysplasia in Labradors, are excluded, have tiny sub-limits, or long waiting periods,' he said. 'The best policy is one that actually covers your pet's most likely expensive health risks, not just the one with the biggest headline figure.'
'Don't just grab the cheapest or most advertised plan. Think of choosing pet insurance like careful matchmaking for your pet's specific needs,' Dr Lee added.
Sometimes, a policy with a lower premium that covers only critical illnesses or accidents may be the best option for a pet owner.
'The hard truth is that major vet bills in Singapore for things like cancer treatment or complex surgery can easily hit thousands, or much more. Unlike your own health, there's no MediSave or government subsidy for your pet.
'A modest annual premium can be the difference between getting the best care and facing a devastating financial decision. It's for the big, unexpected disasters, not the routine check-up,' he said.
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