Hopefully, as a practicing dentist, you have disability insurance in place as a part of a comprehensive financial plan. These policies can give you peace of mind, because when set up properly, you can receive a tax-free income until retirement age if you become too sick or injured to work.
The question is, do you have enough coverage? Most individual policies limit coverage to between 60-65% of your income. Insurance companies put in this restriction to encourage insureds that become disabled to return to work, if possible. Many people would struggle getting by on 60% of their income, even if they’re receiving tax-free benefits. For a dentist, the longer you practice and the more savings and equity you’ve built in your practice, the less this might be a burden.
Insurance companies also limit the coverage so that their potential claims exposure might be reduced. If someone has no financial incentive to go back to work, he or she often does not. Most dentists make much more working than not, so are motivated to return to their practices. However, this isn’t an insignificant concern for the insurance company, because for every policy it writes, it must set aside significant claim reserves to fund potential future claims.
In our low-interest environment, this represents dead money that’s earning very little interest. This is why fewer companies offer individual disability coverage; and the policies tend to be very similar on coverages and limitations. (A recent study shows 16 companies represent almost 94% of the individual non-cancellable disability policies available.) You may need to consider group disability coverage, as well.
Using a combination of individual and group disability coverage can maximize coverage at a lower overall cost. There are differences between group and individual coverage, so you need to be aware of the pluses and minuses of each. Considering using both types of coverage can help with making sure your coverage is sufficient in the event of a disability.
Starting July 2017, group long term disability and group term life insurance will be offered to eligible TDA members through TDA Financial Services Insurance Program.
A special open enrollment period will launch the programs, and be held July 17–August 31, 2017. During this period, TDA members can enroll—no medical questions asked.
Learn more about what these plans offer through educational webinars held during open enrollment on August 15 and 22; 12:30 pm–1 pm CST. Register at tdagroupbenefits.com
If you’d like more information or to discuss the insurance options available, please contact TDA Financial Services Insurance Program at 800-677-8644 or visit tdamemberinsure.com