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Why Pet Owners May Need a Life Insurance Policy – The Motley Fool

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by Christy Bieber | Published on Jan. 8, 2023
Image source: Getty Images
Don't leave pets unprotected when buying life insurance coverage.
Check out our picks for best life insurance companies
Pet owners know that caring for an animal can be very expensive. This is why those who own a pet may want to consider buying a life insurance policy even if they do not have other dependents counting on their income. 
While this life insurance policy doesn’t necessarily have to be huge, it can ensure money is available to pay for a pet’s needs after an owner’s untimely death. 
Pet owners should consider buying life insurance for the same reason anyone else buys coverage. If they die, they don’t want to leave their pet’s without the funds needed to provide for them. 


A life insurance death benefit can pay for an animal for the rest of its life so the pet does not become a financial burden on the new caregiver. The pet owner can buy a life insurance policy that provides enough money to pay for food, toys, services like doggy daycare, and any veterinary care that may be required. 
By making sure there are no financial obstacles for a new caregiver, the pet owner can help ensure their beloved animal companion receives the same standard of care they would have gotten had the original owner lived. The pet owner can also make sure their animal never has to be surrendered to a shelter for financial reasons or has to go without veterinary care due to a lack of available funds.
Someone buying life insurance to make sure their pet is provided for is going to need to choose the right process to name a beneficiary. 

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A pet cannot be a direct beneficiary on a life insurance policy because the animal would lack things like a bank account, a Social Security number, and the ability to make a claim. However, the pet owner could create a trust to provide for the care of the animal and the trust could be named as the beneficiary of the life insurance proceeds. The pet owner could also name the pet’s chosen guardian as the beneficiary, providing instructions for how the money is to be used.
A trust can be more complex to set up and there could be tax consequences when the life insurance death benefit is paid to a trust rather than to an individual. However, a trust can provide a pet owner with more control over when and how the money is used to provide for a pet after death. 
Those who are considering the best way to ensure that life insurance is able to provide for a surviving pet should consider talking with an estate planning lawyer. They can help determine the best way to ensure the money is used for the animal’s needs. 
The important thing, though, is to have these conversations — and look into purchasing a life insurance policy — well before a death occurs. This way, a life insurance policy can be obtained and the right beneficiary named in plenty of time to provide the protection that animal companions deserve. 

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.
Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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