It is important to plan ahead and be practical when running your dental practice. Purchasing disability insurance is a practical and smart decision. But when deciding to make the purchase, there are several things you need to look out for.
Choosing the right disability insurance policy requires a considerable amount of knowledge and research. You need the knowledge of agents and insurance companies to point you in the right direction, but you should also conduct your own research to best ensure you receive appropriate advice.
With all the available companies, font types, and optional features, it’s hard to know where to start. Here are five areas dentists should research and understand before purchasing disability insurance.
1. Know reputable insurance companies to help narrow your search.
It is important for dentists to know which reputable companies offer occupational disability insurance Strategies. Guardian, Mass Mutual, The Standard, Principal, Ameritas and Ohio National are all recognized in the industry for having strong disability insurance policies. These are established insurers with strong financial ratings that offer the key elements of adequate disability cover for healthcare professionals. However, you will want to check which ones offer disability insurance in your state. Some companies do not sell their policies in all 50 states.
2. When comparing companies and features, it’s not always apples to apples.
Dentists need to do more than just compare costs. Companies are different in how they structure the features of their policies. For example, some companies include self-occupancy in the base contract and others require the purchase of an additional endorsement to design the policy as self-occupancy.
Another example is the future increase option, which offers the possibility of increasing your coverage if your income increases. But the availability and process of increasing can differ depending on the insurer – some offer it on an annual basis until age 55, others annually until age 60 and some only every three years. For more information on the differences between the policies, see the Ultimate Guide to Disability Insurance for Dentists.
3. Know how your agent is paid and how they are incentivized.
Insurance agents, including those who sell disability insurance, almost always receive a commission. The total commission is a percentage of the premium payment for policies sold to clients, which can vary from 50% to 70%. The more insurance premium you pay, the more commission your insurance agent earns.
This is important to know because some disability insurance agents may attempt to supplement your policy with additional features that you may not need to increase their commission. These features can take the form of optional riders that do little to improve your coverage, but increase your costs and their compensation.
Sometimes insurers want to increase sales of a specific product by offering a commission bonus for all policies sold in a month or quarter. Agents can also benefit from incentives such as trips for their total sales in a year. In short, make sure you find an agent you trust to give you unbiased advice.
4. Know which features are absolutely essential and which ones you can do without.
Since agents may be incentivized to sell you more than you need, it’s essential to know which aspects of your disability coverage are essential to your situation and which are not. All dentists in the disability insurance market will want the following features included in their policies:
Not cancellable—This means that the insurer cannot change any part of the policy, including the premium amount, and cannot cancel the policy for any reason.
Personal occupation—This provision states that the policy will pay benefits if an injury prevents you from working in your medical specialty, even if you are able to earn income in another occupation.
Guaranteed benefits to age 65—This will allow you to receive benefits until age 65, whether you become disabled at age 35, 45 or 55.
90-day elimination period—Disability policies include a waiting period, sometimes called a waiting period, which is the period of time between when disability occurs and when benefits are paid. You should opt for a policy that starts paying at least 90 days after the onset of disability.
Another feature to consider is a residual disability benefit. This allows you to receive benefits if you are not totally disabled, but suffer a loss of income due to disability. Most companies require a loss of at least 15% to 20% before benefits are paid.
5. Know which states are more expensive than others if you move.
This often comes as a surprise to many dentists, but the cost of disability insurance can vary widely from state to state. This is due to several factors, including the cost of living, claims history in each state, the regulatory environment, and overall competition among insurers. If you are a dentist-in-training in an expensive state, such as California, and could move to a more affordable state to establish your practice, you may want to wait until after you move to purchase disability insurance. Knowing the cost difference between locations can help you save up to 30% on your premiums.