Disability Insurance for Dentists
High Income - High Debt - Unique Protection Needs
Dentists, and those with dental specialties, have a unique need for disability insurance. While all professional occupations need to protect their income, dentist are especially vulnerable to accidents or illnesses that could affect their income.
Payscale.com indicates that the average base salary for a dentist is over $125,000. When you combine that with bonus, profit sharing, and production income, the total compensation for a dentist is over $220,000 in many areas of the country. It is not uncommon for dentists, orthodontists, and periodontists who own their own practice to have incomes in excess of $500,000.
Often times, with these higher income levels, also comes higher levels of student debt. The American Dental Education Association (ADEA) states that the average educational debt for all indebted dental school graduates in the Class of 2017 was $287,331, and that 30% of these graduates had student loan debt in excess of $300,000.
Having an occupation in dentistry requires a significant investment in time and money. This investment needs to be protected by a special kind of disability insurance.
The Special Type of Policy Dentists Need to Protect Their Income
Every dentist should have a policy that contains two major provisions:
- True own occupation definition of disability – This ensures that if you suffer an illness or accident and are disabled as a dentist, you will receive your total disability benefit, even if you are able to work in another capacity. This is a very popular feature for everyone in the medical community, but especially so for those in the dental occupations. This feature is important because it would allow you to collect 100% of your disability insurance benefit, plus your income in your new occupation, thus getting you back closer to your income pre-disability.
- Recovery benefit – This is perhaps the most important feature a dentist can have on their policy. Because many dentists receive income from their production of seeing patients and doing procedures, and not just salary, it’s important to have a recovery benefit. A dentist who is disabled for a period of time, recovers medically and returns to work, may still have a large drop in income until his or her patients return. If that dentist had built up a practice over many years, it will take some time for them to rebuild financially upon their return. Many disability policies stop paying once you return to work full time, even if you still have a loss of income. A recovery benefit ensures that you will receive disability benefits so long as you have a loss of income, even if you’re back at work full time again.
Other Important Things to Know
While it’s important to know that the high income/high debt of many dentists requires a specially designed policy with coverage specific to your own occupation and with a recovery benefit, there are a few other features many dentists chose.
- Student Loan rider – This optional benefit provides for the repayment of student loans in the event of disability. This can help ensure that while your income is being replaced, your student loans are also be paid down.
- Future Income Options – Many dentists’ income increases over time as patients increase and the business builds. A future income option rider allows you to increase your disability insurance without going back through medical underwriting.
- Non-cancellable and Guaranteed Renewable – These types of policies guaranteed the premiums and policy language won’t change over time. These are the most dependable types of disability policies.
Business Overhead Expense Coverage – If you own a practice, you have expenses related to running the business. This type of policy is frequently bought by dentists to provide for reimbursement of these expenses when disabled.
Business Reducing Term – Many dentists who buy an existing practice require a bank loan to fund the purchase. This type of disability insurance is what the bank requires to repay the loan in the event the dentist is disabled.