Disability insurance is a type of policy that offers financial protection in case of a temporary or permanent disability.
In exchange for paying a monthly premium, you get coverage against any illness or injury that causes a disability for a short or prolonged period.
Should any of the disabilities that your policy covers happen while it’s active, you’ll receive a monthly income worth up to your policy limits.
The recurrent pay will keep you going while you’re unable to work or if you don’t get paid time off due to being self-employed.
As a dentist, a car accident, sustained vision problems, or other unexpected life issues can mean that you can no longer perform at your job.
Disability insurance for dentists will provide a financial lifeline when you’re recuperating and can’t earn an income. This article covers everything you need to know to get covered.
Key Takeaways
- Eligibility for disability insurance depends on factors like age, lifestyle, and health.
- Group policies offer convenience, but individual policies provide customization and portability.
- Key factors to consider include policy features, waiting periods, and benefit length.
- Useful policy riders include partial disability, student loan, and own occupation riders.
Table of Contents
Eligibility Criteria for Disability Income Insurance
Disability insurance companies typically base a decision to give you a policy on the following criteria:
- Your Age: It’s usually best for dental professionals to get disability income insurance when they’re young. Your young age makes you an attractive prospect to insurance companies for two reasons: you’re less likely to have poor health, and you’re primed for income increases as you advance in your career.
- Your Lifestyle: The way you conduct yourself in your personal life can impact your health and determine your eligibility for disability coverage. If you engage in drug use recreationally, drink, or smoke, it could count against your application.
- Your Health: A disability insurance company will be more willing to extend a policy if you’re in good health. The opposite tends to be true if you have pre-existing conditions (mental disorders, cardiovascular diseases linked to obesity, neurological issues, etc.).
Thus, being fresh out of dental school and saddled with student loan payments does not automatically make you ineligible for disability insurance coverage. Your youth and promising earning potential make you just as eligible as dentists who are decades into their dentistry careers.
Types of Dental Insurance Policies
Disability income insurance typically falls into the following two categories:
Group Policy
Group disability insurance policies offer coverage to a group of people. Private companies and government institutions are among the entities that can choose to take up a group policy for their employees.
The main advantage of group policies is that they’re automatic in many cases. Your employer pays the monthly premiums on your behalf (as part of your benefits package).
However, the cons associated with this policy type mean that it isn’t advisable to rely on a policy provided by your employer alone.
For one thing, you can’t customize these policies because your employer sets the terms from the onset. Since the policy is meant to give general coverage to all employees, it may not meet your unique needs.
Another disadvantage of obtaining disability insurance benefits through a group policy alone is that it doesn’t survive a change of employment. Once you leave the dental practice that offers a group disability policy, your coverage for the disability benefits under the policy ends.
Individual Policy
The major difference between group and individual policies is that you take out an individual policy personally.
This distinction also means that you can stack an individual policy on top of your group policy for extra coverage.
Since you’re personally taking out an individual policy, you get to customize it to your needs. As your income grows and your eligibility (that is, your age and health) changes over time, you can make adjustments as you go along.
Additionally, an individual policy survives a change in employer. You can transfer it from the first place you get your start practicing dentistry to all subsequent dental practices you find yourself in.
The main con associated with getting an individual policy is that it costs more money than group policies. You don’t have the benefit of an employer covering the cost of this policy for you. Considering that disability insurance companies classify dentistry as ranging between a three and four on a 1-5 risk scale, individual policies don’t come cheap.
Factors to Consider Before You Buy Disability Income Insurance
There are several factors to consider when choosing between disability insurance carriers. They include:
Features
Choose a carrier whose policies have features that aren’t overly detrimental to the policyholder. For example, you should prioritize policies that don’t let the insurer unilaterally cancel your policy even when you’ve been paying your monthly premiums. Ditto for the carrier making adjustments to your benefit amount or rates.
Waiting Period
All disability income policies include a waiting period before they begin income disbursements. The length of this period varies between 30 and 90 days, but you can shorten it for an additional fee. If you don’t believe you’ll have sufficient emergency funds to meet your living expenses before the three-month wait period elapses, choose a policy that lets you shorten the period.
Benefit Length
Insurance Policies specify how long the benefit period – that is, the time within which you’ll receive monthly payments – will last. There are short-term periods (a couple of months) as well as longer-term ones (two years, five years, a decade, or until retirement). The longer your benefit period, the higher your premiums will be.
Related: How Much Should I Have for Retirement?
Available Policy Riders
As already mentioned, individual policies offer flexibility in the way you can customize them to your needs. That includes giving you the option to choose the riders, or, extra provisions, that will be included in your policy.
Some riders worth looking into include –
Partial Disability Rider: Some policies restrict benefits payouts to cases of total disability alone. However, this rider entitles you to the payments even if you have a partial disability, i.e., one that lets you work but not at 100% (or as many hours as you would without the disability).
Student Loan Rider: The student loan rider helps you pay for your student loan as you make your monthly premium payments. This is an excellent rider to include if you plan to get physician mortgage loans, as it could free up some cash for loan payments.
Cost of Living Adjustment (COLA) Rider: COLA riders account for the rising cost of living that is inevitable when taking a long-term disability insurance policy. Your benefit amount increases in response to inflation.
Own Occupation Rider: This rider provides for a disability that prevents you from doing your own occupation (dentistry). Including this rider in your policy means you’ll qualify for disability income even if you can still work, but just not as a dentist.
Ensure that you consider all of the factors discussed above when choosing your policy. They’re designed to make your life easier if you end up needing disability insurance benefits.
Applying for a Disability Insurance Policy
Here’s an overview of the basic steps that your application for disability insurance would likely follow:
1. Initiation of the Underwriting Process
You approach an insurance provider, and they will help you fill out an application form. This action kickstarts the underwriting process, where an underwriter will review the documents you’re requested to provide to determine whether you qualify for a policy.
2, Medical Examination
Some insurers may require that you undergo a medical examination, which will include you providing blood and urine samples. The medical examiner may also ask you a series of questions about your medical history. The results of these tests, along with other documents like your tax returns, get passed along to the underwriter.
3. An Offer Is Made
If your tests go well, the insurance company will contact you and send you an offer with the policy terms. A company agent may go over the terms with you to ensure you understand what you’re signing up for.
4. Acceptance of the Offer
All that’s left is for you to confirm your acceptance of the offer and begin paying your monthly premiums. In the event of disability, you and your family members should be covered.
Final Thoughts
If you’re serious about protecting yourself financially during times of disability, it’s worth getting a disability insurance policy. Our experts can provide further clarification on how to kickstart the process and walk you through additional factors you’ll need to consider. Contact us to get expert advice and set up your policy application for success.
