December 16, 2005
Pet life insurance - is there such a thing and how does it work?
Unfortunately, most pet insurers do not cover life insurance. Why is that? That is because it's uncertain whether there is insurance interest involved. This means that it is not obvious that the person who benefits from the payout of a life insurance policy on a cat or dog must care more about keeping the pet alive than receiving the payout on death. It's a bit clearer to insurers that there is insurable interest between a parent and a child, although the amount of insurance you can get on a child is very low just for this same reason.
Unfortunately, with cats and dogs, insurable interest is hard to measure and that's why you can't get a stand-alone life insurance policy on your dog or cat's life. You can imagine all sorts of situations where unscrupulous people might adopt a dog or cat and oops, she suddenly dies in an accident a short while later. Or a stud dog who can't perform and is taking up space and food in the kennel, oops, suddenly ingests rat poison by mistake and dies. By the way, I'm not suggesting that any of you would do this. In fact, if you are reading this blog, you are most certainly not likely to do this but you can imagine others out there who think differently than us about our cats and dogs.
You can get some limited pet life insurance through a pet health insurance policy although, I believe that the PetCare program is the only one with an accidental death benefit up to the value of the purchase price of the dog; however, it is bundled in with the health insurance and is not a stand-alone benefit. It doesn't help you though if you have a breeding dog and want to insure him or her to protect against loss of earnings due to death. That product is a long way off, if it ever appears on the market.