In August, Roshan Kanesan opted to buy medical insurance with a RM3,500 limit for his one-year-old puppy, Berkshire. The sweet pooch is named after Berkshire Hathaway, “because I’m that kind of nerd”, Roshan told MyPF.
So why did he finally decide to do it? He attributed it to something his girlfriend had said earlier this year: “Yes, you can afford to cover RM3,500 on your own, but what if the vet bill ends up being more than that?”
It was a rhetorical question, but it helped nudge Roshan towards making his decision. Still, he continued to have his doubts, asking: “Do I really need pet insurance? What are the odds he will need medical cover?
“And even if Berkshire ever does need medical attention, I can cover it with my emergency fund, right?”
The answer to the latter question would be “yes” – but Roshan eventually realised that having pet insurance would help his emergency fund remain intact. He could now budget his pet’s potential costs as part of his regular expenses, notably in the form of a monthly or annual premium payment.
By doing so, he would be offsetting the risk of a sudden big-ticket expense jeopardising his precious reserves. “After all, if you are able to anticipate an event and plan for it in advance, then it shouldn’t be something you dip into your emergency fund for,” he said.
And as much as any pet owner would hope their furkid never winds up at the vet, realistically, it is bound to happen at some point. As Roshan put it: “Puppies, like children, do stupid things sometimes.”
Meow-naging cash-flow expectations
“That’s all well and good,” you might say, “but what if you don’t end up utilising the insurance? Aren’t you just throwing money away?”
“Well, yes and no” is Roshan’s response. “As long as it is within my cash flow – meaning I can still cover my other commitments and expenses, and continue to save – I find the ability to manage risk like this to be very valuable.
“Berkshire’s pet insurance, along with other (human) types of policies, helps make my cash flow more predictable, which in turn helps me plan better financially.”
He acknowledged there was a chance the policy might not cover the entire medical bill, but it would nevertheless reduce the overall cash-output shock. As for the remaining amount? That’s where the emergency fund comes in.
“All I have to do is make sure I’m saving up the relevant amount on a monthly basis to pay for the annual premium,” Roshan added.
This story was originally written by Roshan Kanesan for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.