Pet Insurance Guide

Lesson 6:
Picking the Right Maximum Payout

(Not All Pet Insurance Plans Are Created Equal)

(Before proceeding, please make sure you understand
the basics of Maximum Payout)


Maximum Payout is the maximum amount of money the insurance company will give you.

As stated in Lesson 2 Pt. 1, there are currently 5 types of Maximum Payouts available in pet insurance:

  • Maximum Payout Per Incident
  • Maximum Payout Per Year
  • Maximum Lifetime Payout
  • Maximum Payout Per Body System
  • Maximum Payout Based on a Predetermined Benefit Schedule

Some companies will use more than one type of Maximum Payout in their plans.

Do not confuse Maximum Payout Per Incident with Per Incident Deductible. Payout is is what the insurance company will pay, while Deductible is what you must pay. Per Incident Deductible is described in Lesson 2 Pt. 1.



How do I pick the right type and amount of coverage for the Maximum Payout?...

As stated in Lesson 4, on the high end costs can hit $10,000 - $20,000 (depending on medical condition, geographic location and level of care)...rare but possible.

You want the plan you pick to cover these worst case scenario fees. Ask you veterinarian to help you determine your "Worst Case Scenario Cost".

Since we do not know what injury or illness will occur, we want to focus on plans that give us the most flexibility when it comes to Maximum Payouts. We want plans that let us use the money for whatever comes up.

Once you have your "Worst Case Scenario Cost", look for pet insurance plans that have one of the following three Maximum Payout Structures:


  1. A 'Maximum Annual Payout' that is at or higher than your "Worst Case Scenario Cost".

    If you use this structure, make sure there are no 'Maximum Per Incident Payout' structures associated with the plan. These 'Per Incident Maximum Payouts' will put a cap on how much of your Annual Maximum you can spend on any one illness, accident or injury.

    Since we do not know what incidents will happen and how much they will cost, having a Per Incident cap could limit your reimbursement, giving you back less than the actual incident cost.

    Pros - The 'Maximum Annual Payout' gets reset every year so you will have this amount available to you every year. Since we do not know if or when an major incident will happen, this type of structure allows you the flexibility to have the money available whenever it is needed.
  2. A 'Maximum Per Incident Payout' that is at or higher than your "Worst Case Scenarios Cost".

    Pros - You will have your "Worst Case Scenario Cost" available to you for every new incident.

    Cons - Once the cost of an accident, injury or illness goes over the 'Maximum Per Incident Payout' you will not receive any more reimbursement for that accident, injury or illness.
  3. A 'Lifetime Maximum Payout' that is at or higher than your "Worst Case Scenario Cost".

    If you use this structure, make sure there are no 'Maximum Per Incident Payouts' associated with the plan. These 'Per Incident Maximum Payouts' will put a cap on how much of your Lifetime Maximum you can spend on any one accident, illness or injury.

    Cons - Once you hit the 'Lifetime Maximum Payout' amount you will not receive any more reimbursement for any accident, injury or illness and your policy will more than likely be cancelled.


note    I do not recommend plans with Maximum Payout Per Body System or Benefit Schedules to my clients.


These types of maximums are restrictive, complex and confusing.


To get a full understanding of the amount of reimbursements you can expect with these structures:

  1. You will need to know, in advance, what medical conditions your pet will receive throughout his or her lifetime.

  2. A medical degree to determine if those diseases will receive adequate reimbursements.


I think pet insurance plans should be kept as simple as possible.

The more complex it is, the harder it is to know what you are really getting and the more wiggle room the pet insurance companies have to deny reimbursement.





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