An insurance news article published Aug. 11, 2014 reports on a survey conducted by Securian Financial Group. According to the May 2014 survey (“Pet heirs: Financial planning with pets in mind”), 44 percent of the 903 respondents have made formal or informal plans for their pets’ future care.
The article cites some interesting statistics on today's pet industry, which American Pet Products Association reported has more than tripled in 20 years from $17 billion in 1994 to an estimated $59 billion in 2014. When asked how much they would spend to save a pet’s life:
- 16 percent say they would spend $10,000 or more.
- 29 percent would spend $2,000 to $5,000.
On the topic of ongoing maintenance and veterinary costs, respondents in the Securian survey answered as follows:
- Nearly 60 percent spend up to $1,000 a year on food, grooming, toys, etc.
- Three-fourths spend up to $1,000 a year on veterinary bills.
- 18 percent say their largest single pet related expense was $2,000 or more.
“If the owner suddenly dies or becomes disabled, the person who inherits the pet may not be financially prepared for the added expense of ongoing care or life-saving procedures,” said Michelle Hall, manager, Market Research, Securian Financial Group. “Our survey shows a significant percentage of pet owners make financial plans to ensure their pets will always be well cared for.”
The nearly one-fifth of survey respondents who have made financial plans for their pets’ future care reported the following:
- 38 percent said they added the pet’s future caregiver as a beneficiary to a life insurance policy.
- 35 percent added more coverage to their life policies.
- 13 percent purchased annuities naming the pet’s caregiver as the beneficiary.
According to the article, The American Society for the Prevention of Cruelty to Animals urges owners to financially plan for their pets’ care. Many tools are available: Forty-six states have passed “pet trust” laws. Pet protection agreements, wills, powers of attorneys and letters of instruction are also be available.
“Pets may provide opportunities for financial advisors whose clients consider their pets members of the family and spend large sums on their care,” said Hall. “They can work with their advisors to modify their financial plans to include line items for pets.”