Dentistry is different than most professions. Many conditions that wouldn’t stop other professionals from practicing could stop a dentist in their tracks and destroy their income and practice. I know two legally blind attorneys and a paralyzed psychiatrist. I have never heard of a blind or paralyzed practicing dentist.
Dental practice puts tremendous strain on your body; I know, I blew out two discs in my neck before age 45. Even after surgery, I have been permanently disabled from dentistry for decades. Benefits from excellent disability insurance policies kept food on my family’s table and allowed me to transition to a new career that I love. Unfortunately, I know a few dentists with serious medical conditions who should be considered disabled but are still practicing because they must. They are suffering because they didn’t purchase adequate disability insurance, and although they are miserable, they would be nearly destitute if they didn’t work.

The Odds of Disability Exceed That of Dying

The odds of experiencing a disability are much higher than most people think. The average person in their 20s has a 25% chance of becoming disabled, at least temporarily, before they reach retirement1 . This probability of disability is far greater than the probability of dying before retirement. Of my dental school classmates, nearly 5% are permanently disabled from practice while less than half that percentage died before retirement.

The disability numbers are higher because of the wide variety of potential injuries and impairments that could prevent you from being able to perform in your profession. The definition of a disability varies widely, and it does not have to be a life-threatening illness. Something as common as a ruptured disc or vision impairment can render you unable to do your job for a long period of time, or even permanently.

With a disability, you may be out of work, but you still must pay practice loans, mortgage, and other living expenses. Health insurance will cover most medical bills related to an injury, but medical insurance does not supplement your income if you cannot work. Income replacement is a dilemma that is particularly problematic for higher earners who work in highly specialized roles like dentistry.

Social Security Disability Insurance (SSDI) benefits may help, but most people unable to practice dentistry are also unable to qualify for SSDI. Social Security’s definition of disability is very strict2 and it is difficult to meet the requirements to qualify. But even if you do qualify, the most you can receive in 2021 is $3,148 per month3, or $37,776 per year — not much if you are a dentist.

A disability has the potential to unwind years of sound financial planning, which is why we at Modera suggest building a financial plan that addresses your disability insurance needs. We recommend you do this as early in your career as possible.

What to Look for in a Disability Insurance Policy

Here are some key considerations when examining your options in a disability insurance policy:

  • “Own-Specialty” Definition of Disability: This coverage contains a preferred definition of disability called “own-specialty.” This means you are eligible to receive full benefits if you are unable to perform the duties of your own dental specialty, even if you are able to work in another field of dentistry or profession.

  • Future Increase Option (FIO): This option allows you to increase your coverage without medical underwriting as your income increases during your career. This is especially attractive when buying a policy early in your career.

  • Noncancellable and Guaranteed Renewable: This means the insurance company can’t raise your premium, change the terms, or cancel the policy as long as you pay your premiums.

  • Residual Disability Benefit Rider: This can be a helpful option if you are injured but still able to work on a part-time basis. For example, in a situation where you lose 50% of your income from a disability, a residual disability benefit rider may pay up to 50% of your total available disability benefit.

Another nice potential benefit is that disability insurance proceeds are not taxable if you paid for the policy premiums yourself. If you are part of a group disability insurance plan, then the proceeds may be taxable to the extent that your practice group or employer paid the policy premiums. Since taxable benefits replace a smaller portion of your net earnings, you may be able to add another disability policy to supplement your group plan.

Modera Can Assist You with Planning for Potential Disability

As a fee-only advisor, Modera Wealth Management does not sell insurance or earn any commissions on products. This allows us to assess your disability insurance needs as a practicing dentist objectively and determine how it fits into your overall financial picture.

We offer you a coordinated team of financial planning professionals, such as Barry Kaplan, DDS, EA, CFP® and Bradley Hilton, MBA, CFP® who work with dentists and dental specialists like you to assist with disability and income protection planning. To learn more about what Modera can do for you, please get in touch.

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