March 7, 2008, Newsletter Issue #4: Disability Insurance for Dentists Could Be More Expensive than Life Insurance

Tip of the Week

“Why does it appear that disability insurance for dentists is more expensive than life insurance?” This question is often asked as people look at the sometimes large lump sum payouts for life insurance versus a modest monthly disability benefit. The answer is actually quite simple. The odds are higher that, during your professional career, you are more likely to suffer an injury or illness and become disabled than you are to die. Also, the total benefit paid from the time of disability to age 65 could total in the millions of dollars. A $10,000 per month disability claim paid from age 45 to age 65 would pay $2,400,000.

The insurance industry, as you probably know, establishes cost and premium structures based on statistics. The more covered claims filed and amount of benefit payouts often translate to higher premiums, while fewer claims and less dollars paid out often result in lower premiums for the same coverage.

Your goal of low cost insurance can still be realized. However, you should give serious consideration to your dentist disability insurance package of protection, making sure that it is adequate for your needs. Unlike life insurance, which is a more “black-and-white” situation, disability insurance for dentists resides in a much “grayer” area of coverage versus benefit.

If, through injury or illness, you become disabled for a period of time and unable to practice your specialty, leaving your monthly income stream unprotected or under-protected could generate a financial crisis. With recent statistics projecting that one of seven people will suffer a disability before the age of 65, dentists reside in this statistical universe. When managing your dentist cost issues, give serious consideration to protecting an even more important category -- your monthly income stream.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

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