Disability Insurance for Dentists
People need dentists, and dentists need disability insurance. The number of dentists is growing, and this means that demand for disability insurance for dentists is also growing. The American Dental Association says there were 201,117 practicing dentists in 2020. That’s 61 dentists for every 100,000 people.
In the coming years, the number of dentists is expected to increase. The U.S. Bureau of Labor Statistics (BLS) says the number of jobs for dentists will rise by 6% between 2021 and 2031, compared to the average growth rate of 5% for all occupations. This is a big market, and it’s only getting bigger.
Dentists Have an Income Worth Protecting
BLS says the average median annual wage for dentists was $163,220 as of 2021. That works out to about $78.47 per hour. This is significantly higher than the median annual wage for all workers, which was only $45,760.
Dentists who pursue certain specialties can see even higher salaries. Indeed says that orthodontists may an average of $254,622 a year, and oral and maxillofacial surgeons make an average of $288,550 a year.
Dentists are top earners, but they don’t attain this income overnight. To meet state licensing requirements, dentists need to earn a Doctor of Dental Surgery, Doctor of Medicine in Dentistry or Doctor of Dental Medicine degree. They may also need to complete postdoctoral training.
To become a dentist, a person needs to invest both time and money. The American Dental Education Association says that only 17% of the people who graduated from dental school in 2021 did so without any student loan debt. This means that 83% of dental school graduates had debt, and the average student loan debt was $301,583.
Because dental school graduates look forward to high salaries, paying off this debt shouldn’t be a problem, and dental school is often a good investment – unless a disability prevents the graduate from realizing their income potential.
Dentists Are Vulnerable to Disability, Too
Disability can strike anyone, regardless of age or social class.
The Social Security Administration says that more than one in four of today’s 20-year-olds will become disabled before turning 67. An illness or injury can force people out of work, and when that happens, mortgage payments, student loan debt and other bills continue to mount.
This is especially true for dentists – who have invested a significant amount of time and money into building a career, and possibly opening a practice.
When dentists lose their ability to work, foreclosure and bankruptcy can result – but these risks can be greatly reduced by securing own occupation disability insurance.
Disability insurance coverage provides important income protection – helping dentists maintain their standard of living even if they’re unable to work due to disability.
Dentists who own their practices should have several types of income protection as highlighted below.
Many Dentists Own Their Own Practice – And That Creates More DI Needs
Many dentists own their own practice. The American Dental Association says that practice ownership has dropped. Nevertheless, it’s still very common, and in 2021, 73% of dentists in the private practice owned their own practice.
This means that the majority of dentists are also self-employed business owners. As a result, they have even greater disability insurance needs. A dentist who owns or co-owns a practice may need the following disability coverage types:
- Individual disability insurance – Some traditional employees have access to group long-term disability insurance through their employer. However, because dentists are often self-employed, this likely isn’t an option for them. To protect their income against the risk of disability, they can purchase individual disability insurance. This is a portable disability insurance policy that replaces a portion of the policyholder’s pre-disability income during a covered disability.
- Business overhead expense insurance – If a dentist is unable to work, it’s not just the dentist’s personal finances that can be put in jeopardy. A disability could also threaten the dental practice. Even if the dentist can’t see clients, some overhead expenses will continue. For example, the dentist will likely need to pay rent or a mortgage for the dental office. There will also be utilities, accounting fees, office equipment expenses and employee salaries. Business overhead expense insurance can cover these and certain other business expenses during a period of disability. Benefit periods usually last for 12 to 24 months.
- Bank loan disability insurance – Starting a dental practice can be expensive, and someone who just graduated from dental school might not have the cash needed. As a result, many dentists may need to take out bank loans to fund their new practice. Bank loan disability insurance can cover the required loan payments during a period of disability.
- Disability Buy-Sell Insurance – Some dentists operate solo practices, meaning they’re the only dentist at their practice. However, many dentists form partnerships with other dentists. This can be a smart business move, but it can lead to problems if one dentist needs to leave the partnership early because of an unexpected illness or injury. Many business partners create disability buy-sell agreements outlining how they will handle this possibility, and it’s common to fund this type of agreement with buy-sell disability insurance.
Other Dental Professionals Also Need Coverage
Whether or not a dentist is operating as a solo practice, there are going to be other employees at the office. These workers will typically include a receptionist or office manager and a dental hygienist.
These workers need disability income insurance, too.
BLS says that dental hygienists earned an average of $77,810 in 2021, making them excellent candidates for disability insurance. The salary for dental office managers varies, but some earn more than $50,000 a year.
When three or more people are insured, a multi-life disability insurance may be available. This can be a great option for dental practices with multiple people in need of coverage. Guaranteed standard issue disability insurance is also worth looking into. This is a multi-life disability insurance option with discounts and minimal underwriting. For people with pre-existing conditions, guaranteed standard issue disability insurance can be a great way to secure coverage.
Comparing Quotes from Top Disability Insurance Companies
As an insurance broker, you can help dentists obtain the disability insurance they need to protect their personal finances and their practice. Dentists may have special disability insurance needs, so it’s important to compare options from different disability insurance companies to make sure your dentist clients are getting must-have policy features.
When you compare disability insurance quotes, ask the following questions:
- What’s the maximum monthly benefit amount? Dentists have large salaries, so they need sufficient disability benefits.
- Can the policyholder increase the benefit amount in the future without additional underwriting? This option lets coverage keep up with salary increases.
- What’s the elimination period? This is how long the policyholder will have to wait before receiving benefits after a disability.
- What’s the benefit period? The benefit period for business disability insurance products like business overhead expense insurance may only be a year or two, but individual disability insurance can offer benefit periods that last until retirement age.
- What’s the definition of disability? The definition determines when benefits are available, so this is critical. An own-occupation rider provides coverage if the dentist can no longer perform the duties of their job.
- What other riders are available? Riders are a great way to customize coverage. Depending on the insurance company, you might be able to select a catastrophic disability rider, a student loan rider, or other riders that provide additional benefits.
- Is the policy portable? Dentists can take portable policies with them with they change jobs or open their own practice.
Do You Need Help with Disability Insurance for Dentists?
If you’re a dentist, a disability insurance agent can help you explore your options. Find an agent.
If you’re an insurance agent looking for great coverage options for the dentists you serve, DIS can help. Request a quote.
