25 May More Disability Insurance Information

What’s the Best Type of Disability Insurance for Dentists?

Choosing dentistry as a profession can be a costly decision. The estimated student debt for a dental school graduate was approximately $285,000. That is a significant investment in your dental career. Dental disability insurance will help you safeguard your financial investment. 

One out of every four people in their twenties will be disabled before the age they decide to retire. Some might believe that practicing dentistry isn’t a “risky” profession. However, the leading cause of disabilities is illness, not injuries. 

Insurance, in general, is designed to safeguard your assets. One of the greatest assets as a dentist is their ability to earn a substantial income. As a dentist, if you were to become involved in an accident or become ill unexpectedly, disability income insurance will be able to assist you and your family as you recover. 

Benefits of Disability Insurance

If you have disability income insurance and are in an accident, a percentage of your income will be paid to you when you are recovering from the accident and unable to function. Disability insurance will help you get through a difficult time if you are diagnosed with an illness, such as cancer or have a heart attack. 

When determining whether or not you qualify for disability income benefits, insurance companies look at three factors: 

1. Your well-being: If you have any pre-existing medical conditions; if you have a weight problem; smoker or non-smoker. 
2. Your age: If you are young, you are more likely to be eligible for coverage. This is due to the fact that the younger you are, the less health problems you are likely to have.
3. Your earnings: The amount of disability insurance you can buy is determined by your annual salary. You will be able to purchase more coverage as your income increases. 

Given these three factors, buying disability income insurance while you are young is generally seen as a good idea. When you first begin training, your age benefits you. If you are not just beginning your career, it is always a good idea to buy disability income insurance as soon as possible. 

Individual Insurance Policies

When you have finished dental school and graduated, you will be eligible to enter a practice where you will have access to a group policy for disability insurance benefits. These policies can be appealing, but you should consider supplementing them with an individual policy. Remember that the younger and healthier you are, the more likely it is that you’ll be getting the best deal. This is especially true on an individual policy. So, it’s safe to say that it is recommended not to wait until later in your career.  

Individual policies can be customized to meet your unique requirements. To make your disability insurance plan more comprehensive, you can add enhancements. Riders are upgrades that will help you increase the benefits for the premiums you pay. Typically, as you advance in your career, your earnings increase. Further, the cost of living will increase. With this in mind, you may want to consider gradually increasing your coverage. 

In more cases, if you have had coverage, it will last until you are 65 as long as you continue to pay your premiums. Your coverage will be canceled if you do not pay your premiums. Your individual disability income insurance will follow you if you change careers or start your own practice. 

How is Your Premium Determined?

You must decide whether you want a level or graded premium before the insurance provider calculates the premium. 

Level Premiums. Regardless of the age at which you buy coverage, level premiums remain unchanged. The lower the level rate, the younger you are when you buy disability income insurance. Premiums are fixed before you hit the age of 65. Of course, if you raise your coverage in the future as your income rises, the cost of the new coverage will be added to the original level premium. 

Graded Premium. This form of premium can begin low and gradually increase over time. When receiving coverage as a dental student or resident, this technique is often used. A graded premium will save you a lot of money when you are first starting out in dentistry. At this point, it can be converted to a level premium after you have made enough money to pay the level premium. 

Variables that Impact Cost of Premium

When calculating the premium, the insurance provider considers a number of different variables. Learning about the various categories into which you fall will help you estimate how much your disability income insurance premium would be. 

Income. In general, the more money you make, the more insurance you can buy. As your career progresses, you will most likely need more coverage. 

Waiting Period. The waiting period is the amount of time you must be inactive before you can receive benefits. The waiting period is also known as the elimination period at times. The duration of the waiting period will range from 30 to 365 days. In many cases, you must wait 90 days from the date of your accident or illness for your coverage to begin. The longer you wait, the less expensive your insurance premiums will be. If you want to keep your policy affordable, keep in mind that your premium will usually be higher if you choose a shorter waiting time. 

Benefit Length. The “benefit period” refers to the overall amount of time that disability insurance premiums will be paid. Benefits are typically available until the age of 65, 67, or 70. The higher the rate, the longer the maximum benefit period. 

Add-ons and Riders. For every rider you decided to add to your policy, such as “own occupation,” the cost of your premium will increase. If you are unable to perform the material duties of your profession, the insurance provider will pay you a benefit. The advantage is not diminished if you want to work in a different profession because of your new salary. 

Most Common Riders

Riders are optional features that can be added to the disability income insurance policy. Adding riders to your policy comes at an extra cost. However, these benefits can be worth it for the added peace of mind. 

The riders mentioned below are the most popular ones that can be applied to disability income insurance. 

The Own-Occupation Rider

It is important to think about how disability is described when choosing a dental disability insurance policy. You are only deemed disabled under an any-occupation policy if you can’t work at any job. An own-occupation policy, on the other hand, is distinct. As long as your condition prohibits you from serving as a dentist, you will be eligible for benefits. 

The majority agree that one of the most significant provisions a dentist can add in his or her disability income insurance policy is the own occupation rider. You will also claim the full disability insurance if you are unable to perform the material and significant duties of your career due to a disability. Benefits will not be reduced if you return to work in a new profession if you have this rider.

For example, if you are injured in a car accident and are unable to practice dentistry, but you can return to work in a different profession, your disability insurance benefits will not be reduced. 

The Partial Disability Rider

Not every impairment necessitates a full career change. Instead, you could have an impairment that restricts your ability to function. The partial disability benefit rider is also known as a residual disability benefit rider. This is a potentially important alternative that you should have in your disability policy.  A partial or residual disability is one in which you are still able to work but have lost income as a result of the disability. 

For instance, if you have a back injury but are still able to practice on a limited basis, you will most likely lose money. You may be liable for partial or residual disability payments as a result of the loss of income. Another example may be someone who has been diagnosed with cancer and has reduced their work hours to part-time while undergoing treatment. 

To qualify for partial or residual disability insurance, most companies set a minimum level of income loss. This level of loss is generally between 15% and 20%. Furthermore, whether you are partly or permanently impaired and have a loss of income of 75% or more, several employers will pay 100% of your monthly benefit. 

Many claim scenarios include periods of complete and partial impairment, as well as residual disability. For example, if you are involved in an automobile accident and are unable to work for six months, it is possible that you will return to your practice on a limited basis at first, resulting in a loss of income. 

When it comes to a degenerative disease or a progressive illness, the disability can begin as a partial or residual disability and progress to total disability. Under either of the above scenarios, a partial or residual disability rider could be useful in helping to offset lost income. 

Future Insurability Rider

It’s important to have the first disability policy when you’re young and in good health. Your disability insurance requirements can change as your dental career progresses. After a few years, your earnings will skyrocket. Your current coverage can become insufficient at some stage. 

That is why many dental disability insurance plans have potential raise options. You will lock in your policy at a young age with a potential purchase opportunity. At the same time, you will have the option to expand your coverage in the future. 

The Future Insurability Rider may be beneficial to your policy. The Future Insurability Rider helps you to buy more coverage in the future as your salary rises, without having to show that you are in good health. Regardless of any changes in your well-being, coverage must be sold at normal rates with no exclusions. 

Cost of Living Rider

You are probably aware that the value of a dollar depreciates over time due to inflation. It is important that the budget includes a cost-of-living adjustment rider in the event of a long-term disability. This rider allows you to receive annual post-disability changes to your monthly benefit, which will help you maintain your purchasing power. 

Your benefits usually rise as your get older, based on the amount of inflation changed by this rider, which varies depending on the policy. For example, assuming a 3% annual inflation rate, $10,000 today will cost more than $18,000 in twenty years. 

Student Loan Rider

This rider will help ensure you don’t fall behind on your student loans. This is in addition to the disability income compensation that will be available to you if you become too sick or disable to function. If you are unable to function, this will help to protect your credit. 

Interest and fees can add up quickly if you fall behind on your student loan payments. This rider is usually a good choice for dentists who are just starting out. Student loan riders normally repay all or a portion of your student loan payments in order to keep you from getting behind on your payments and negatively impacting your credit score. 

Catastrophic Disability Rider

In the case that you are seriously impaired, this rider offers disability compensation in addition to the normal monthly allowance for complete disability. A serious disability may undoubtedly affect your ability to function. However, it can also have an effect on your freedom. The catastrophic disability rider’s extra monthly income will help cover the added expenses associated with a serious disability, such as paying a caregiver. 

Takeaway

The best disability insurance policy for you will be determined by your requirements. Consider how much coverage you need, how long you want it to last, and whether or not you need more coverage for your student loans. If you have determined what you want from a dental disability insurance policy, get quotes from a few different companies. You can find the best coverage for the best price by shopping around. 

Be sure to shop the market, ask questions, and work with a licensed professional. Doing so can help you make an informed decision on  the best kind of coverage options for you. This can also help you learn what you need to know about the best kind of disability insurance for your profession.