If pet owners consider their pets as part of the family, as many do, why would they not want the same health care financial tool insurance for pets that they do for the humans in their family?
Thats the logic and sales argument for pet insurance. While the strategy is not without flaws, the industry has been growing at double-digit rates, including when sold as a voluntary benefit in the workplace.
The industrys pitch to benefit brokers is that having pet insurance in their menu of voluntary product offerings demonstrates their creativity and breadth of the solutions they can provide. It is unclear how many brokers offer the product, but probable that the number is growing in rough proportion to the overall growth in pet insurance sales volume.
Pet insurance carriers, while withholding specific numbers, assert that their sales in general, and through voluntary programs in particular, are growing at a rapid clip. Voluntary pet insurance is a growing trend, says Christine Lynch of NAPHIA, a trade group for pet insurance carriers.
The industry market share leader, Veterinary Pet Insurance, has experienced double-digit growth over the last five years, according to Deana Single, Director of Group Accounts for industry leader VPI.
The company, founded in 1982, has more than 3,800 organizations on its roll of voluntary conduits.
The benefit to employees who buy coverage via employers is discounted premiums, typically 5%. Discounts may increase when multiple pets are covered.
Recent growth in voluntary pet insurance sales volume is attributed in part to the Affordable Care Act. If the ACA is turning health benefits into more of a standardized (and increasingly costly) benefit for employees, offering pet insurance, even on a voluntary basis, can make a company more competitive in labor markets, suggests Donna Cejalvo, Director of Partnership Programs for Pets Best Insurance.
The cost can range from $10 a month for the most bare-bones policy with high deductibles and limited covered services, to $100 or more. Average premiums are in the $25-$35 range, according to VPI.
Policyholders pay for veterinary services up front then file claims with the carrier. Some carriers, such as VPI, reimburse based on a set schedule for particular services and procedures. Others, including Pets Best, pay a flat percentage of the charges.
But whatever the formulas, pet insurance is not a big moneymaker for brokers. Nobody is going to retire on this, concedes VPIs Single. Thats because the cost of coverage is relatively low, as is the percentage of employees who actually buy the product.
I dont think we received a commission for a year, says Connee Dolin, executive VP of Benefits Planning Corp. in Melville, N.Y. Then we got one, but didnt even notice it because it was so small, she adds.
An employers interest in pet insurance is sometimes generated by employee requests, and other times, by a pet-owning HR manager of executive who believes in the product.
Some brokers are prepared to offer pet insurance when requested, but dont push it due to its lack of profitability. Others make a point of bringing it up in client meetings. I just like to offer a robust package to my clients and keep them up to date on whats out there, says Niko Washington, a broker with Johnson & Dugan in Daly City, Calif.
Stolz is a freelance writer based in Rockville, Md.
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