Our view or opinions of an outcome often retroactively determine the merits of the decisions we make. Deftly diving out of the way of a speeding car would logically seem to be a smart decision. Landing in the way of another oncoming car, in retrospect, takes smart out of the equation.
Both outcomes resulted from the exact same choice; to dive out of the way of certain death. But in evaluating the results, the first scenario seems to be the product of a smart decision while the second outcome resulted from what seems to be a decidedly bad choice. But does that mean that random fate determines the merits of our decisions in life? Couldn’t one say the decision was smart regardless and the outcome simply unfortunate in the latter case?
A conversation with my father helped shed some light on the matter for me. He suggested that the merits of a decision are set at inception regardless the outcome and that fate was simply a random variable. Seeing I didn’t fully understand his point, he explained further.
He asked if I would be enticed by an offer that could earn me $50,000.00 in ten years for a meager upfront investment of only $5,000.00. The odds, he explained were only about 50% that I would hit that target and improved if I would be willing to accept a lesser return. I’d have much better odds of realizing $40K, for example. But regardless, the odds of my losing my initial investment were very small. Though I’d have to wait 10 years, I’d be virtually assured of getting at least my initial investment back. Was I interested? I was, but only if I had no other interests in mind for that $5K. My response wasn’t enthusiastic.
“OK,” he continued, “now what if I told you I might be able to make you $5 million dollars and all you’d have to invest is $5 for the purchase of a lottery ticket?” Well that, I thought, was a no-brainer. I’d hand over the $5 with hardly a thought.
In response, he smiled, shook his head and told me I’d just made the same bad decision thousands of lottery ticket purchasers make every day. In failing to consider odds of return on their investment, they make a bad decision simply for being impressed by the potential return on investment relative to the cost of buying in.
In considering the purchase of health insurance for your pet, you face a similar decision but the lines aren’t quite as clear. That, of course, means that making the smart choice can be far more confusing. It requires research and sensible thinking.
As with the example of an investment vs. a lottery ticket, we struggle to make a smart decision when it comes to pet health insurance because we’re considering an investment in an unknown potential outcome. How will we feel spending hundreds of dollars each year if our pet never requires a costly medical procedure and, instead, dies peacefully of old age? Won’t we have made a bad decision and wasted our money?
Alternatively, we apply emotions to the choice. If we don’t get health coverage for our pet, does that mean we don’t love it? Are we wrong for assigning a dollar value to the health of our animal?
In both cases these are the wrong approaches and will not lead to a smart decision. Basing the choice on what-ifs is wholly unproductive. No matter how healthy your particular breed may be in general, you can’t predict accidents such as poisons or car accidents.
The emotional approach is no better and, in fact, can blind you to important realities. All the love in the world won’t change your financial position if you can’t afford the monthly expense for pet insurance. I’d dearly love to buy controlling interest in Microsoft. That passion doesn’t translate to the financial ability to do so. Nor does the lack of finances mean you love your pet any less.
The decision of whether or not to purchase pet health insurance requires a rational approach. Examine the facts. If your pet should require an unexpected and expensive procedure, could you cover the costs out of pocket? Keep in mind this could cost you thousands of dollars. If you earn a good living or have a particularly robust savings account (and are good at not dipping into it) the there may be no point in getting insurance.
Also consider your pet’s age and general health. If it is young and healthy, non-problematic breed then perhaps the choice to purchase pet insurance can be delayed until later in your pet’s life. Just remember the warning that emergencies can and do happen.
Take the time to do the research and math. It may make sound financial sense to pay a monthly fee just in case. For many the peace of mind of knowing their pet is covered in the event of an emergency makes the monthly expense of insuring a pet is preferable to taking an unexpected hit to their savings. Job stability, how much you have in savings and how comfortable you are unpredictability should be the factors that influence your decision.
At the end of the day you should take the time to honestly analyze the relevant facts with no emotional bias. Do your research, consider your financial position and make the choice based on what makes sense rather than your fears and emotions. Leave it to the guys in Vegas to have fun riding emotional roller coasters while you content yourself in a rational decision honestly made.
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