All Content Copyright 2010 PetHealthInsurance.us How It Works Pet health insurance is very similar to human health insurance in terms of application. The payee chooses a plan or set of options that cost a specific price per month. With payment, the insurer guarantees that certain services will be covered or partially-covered to a certain percentage. Payment options can be arranged in a number of timing schemes. The regular costs can be distributed either on a yearly basis, quarterly, or a monthly basis. They can include deductibles to reduce cost to the customer or they can be fully comprehensive at a much higher expense. Further, the plans will range in cost due to the same criteria as human plans, pre- existing conditions. Similar to human plans, pet health insurance plans are gamble on risk for insurers. The plans are designed to make a profit over the long-term with a wide enough pool of customers. Granted the cost needs to be low enough to be affordable, but it also needs to be high enough to offset costs for those few who do incur medical needs. The ideal situation for the insurer is that the majority of customers don’t have any medical needs over the long-term. This maximizes the profit margin. The worst situation is that the majority all have expensive needs, and the insurer has to pay on all the policies owned. Just like human health insurers, pet health insurers use screening methods to avoid the higher-cost consumers and to bring in the low-cost customers. Pre- existing conditions, age, locale, type of animal and breed, and other criteria are all used with actuarial tables to estimate the potential expense of a new customer. Cost versus Care The most obvious choice many owners will be familiar with in pet health insurance is the deductible option. Typical deductions start around $100. Sometimes it can be per incident in the form of a co-pay. In other plans it can be an aggregate minimum amount for an annual or set time period. The second set of alternatives for customers will be plan types. Well-directed insurers will offer a menu of plans. These choices can range from basic, catastrophic care that is only practical when the pet suffer a major injury, to full-service plans that provide regular preventative care and checkups. Plans can include physicals, vaccines, medications, and anti-breeding procedures. Insurers even take advantage of multiple-pet discount offerings to bring in more business from the same owners. Next - Other options Previous - Home