Guide to disability insurance for dentists

According to the American Dental Association (ADA), approximately one in four dental professionals will collect disability benefits at some point before retirement.¹ Why? While most people don't view dentistry as a "high-risk" profession, the physical demands of the job – including static posture, use of hand tools and repetitive motion – can take a toll. In fact, as many as 81% of dentists experience back, neck, shoulder or arm pain.¹ Further, the need for steady hands and precise movements can turn an injury or illness that wouldn’t be an issue for other professionals into a serious career threat. That’s why so many dentists make it a point to have disability insurance. Read on to learn more about:

• The benefits of disability coverage for dentists

• Key components of a disability insurance policy

• What you can expect to pay, and how to get coverage

Why do dentists need disability insurance?

Few professions are as hands-on or require the manual dexterity and skills of dentistry. Professionals with DDS or DMD after their names are highly respected and, for the most part, highly compensated for what they can do. But it all takes years of costly training.

According to recent surveys, dentists earn an average of $193,000 per year,² and the average dental school graduate has over $290,000 in student debt.³ That makes the prospect of losing earning power due to illness or injury especially daunting. Social Security Disability Insurance (SSDI) is not enough for these high earners: the average benefit is just $1,537 per month in 2024.⁴

The key benefit of disability insurance for dentists

If an illness or injury compromised your ability to practice, how would you meet all your financial obligations? Disability insurance may be the only viable way to help replace the income you need to maintain your lifestyle if you haven’t already amassed significant savings and assets.

Short-term disability insurance (or STD) can be an important way to help replace income for a temporary health issue, but it won’t provide the years of income needed to maintain your lifestyle in the event of a more serious problem. Long term disability insurance (LTD) is designed to do precisely that: it replaces 60%-80% of your after-tax income if you are totally disabled should you be unable to work due to a lasting illness or injury – work-related or not. It's a valuable tool that can help ensure covering living expenses and that other financial obligations are covered for as long as your ability to practice dentistry is compromised.

Generally, individually-owned long-term disability insurance will pay you between 60-80% of your gross income for the length of your benefit period.^5,6 This period can be as short as two years, or it can go all the way to retirement (or until you recover from being disabled), depending on the policy.⁶ Coverage can also be customized with optional "riders" to help increase your benefits. Depending on the specific insurance company and policy, these can even include a student loan rider – which entitles you to additional benefits to help cover student loan payments - and a retirement protection rider, which pays additional benefits to help cover retirement plan contributions.

What type of disability insurance policy is best for dentists?

Many disability insurance professionals would advise dentists to limit their search to long-term policies that include an own-occupation definition of disability. This provision states that the policy will provide benefits should an illness or injury prevent you from practicing your own occupation in this case, dentistry (or your specific dental specialty), even if the illness or injury doesn't prevent you from doing another type of work. For high-earning, highly-trained professionals like dentists (as well as physicians and attorneys) own-occupation coverage provides a much more comprehensive level of financial protection compared to any-occupation plans, which may not pay benefits if you can do any kind of work, even if it is outside of your specialty.⁷ And while own-occupation policies are understandably more expensive, insurance companies offer different forms of coverage to tailor benefits more cost-effectively to your needs. For example, Guardian offers:⁸

• True Own-Occupation: If you can’t work in your regular occupation but are willing and able to work in some other capacity, this definition means you can get your full benefit payment even while holding another kind of job. If a practicing dentist had disability insurance for dentists with this definition, they could take a teaching or consulting job and still receive replacement income for the entire benefit period.

• Modified Own-Occupation: This definition pays a full benefit if you can't work in your regular occupation and you are not gainfully employed in another capacity. Accordingly, a dentist would receive benefits as long as they weren't earning income. But if they decided to start teaching in a dental school, income benefits would stop.

• Hybrid 1: Two-Year True Own-Occupation: This definition of disability offers a two-year period of True Own-Occupation. If you’re still disabled after two years, your coverage converts to a Modified Own-Occupation definition for the remainder of your benefit period.

• Hybrid 2: Two-Year Modified Own-Occupation: Another option is to simply have a Modified Own-Occupation definition for the first two years. If you're still disabled after two years, your coverage converts to an Any-Occupation definition, meaning that due to sickness or injury, you're unable to work in any occupation. .

Key components to look at in a disability policy

Disability policies share certain key features that can be tailored in a variety of ways to fit your needs and budget. Before you speak to a financial professional about getting coverage, it helps to understand these basic features and think about what might work best for you:

• The waiting period: Every policy has a waiting or “elimination” period – the amount of time you must wait after you are disabled before the benefits begin to accrue. It can be longer or shorter depending on the specific carrier and policy contract: a longer waiting period will tend to lower your premiums, and a shorter period will raise them. If you have short term disability coverage, your LTD waiting period should coincide with the end of STD benefits to avoid a lapse of income.

• The benefit amount: Most LTD policies will typically replace about 60%-80% of your after-tax income. Any less, and you could struggle to make ends meet; any more, and the policy could be hard to afford, and you might let coverage lapse. In any case, insurance companies will not typically let you “over-insure” with a benefit higher than your current earnings.

• The benefit period: This is the maximum length of time that you can receive benefits. In an LTD policy, the benefit period could be as little as 2 or 5 years – or it could go all the way to retirement age (or until you recover from being disabled). Of course, the longer the period, the more expensive the policy.

Customizing your disability insurance policy with optional riders

A disability policy is a contract that contains certain fixed terms and provisions, but there can also be optional provisions, called riders, that can help enhance your protection at an incremental cost. Some important riders⁹ to consider include:

• Student loan protection rider: Early-career dentists often have substantial student debt – and it doesn’t go away if you become disabled. This optional benefit provides extra money to ensure student loans are paid during the benefit period.

• Basic or enhanced partial disability benefit rider: These options protect you by paying a partial benefit if you suffer an injury or illness that limits your ability to perform certain duties but doesn’t cause you to be totally disabled.

• Future Increase Option: This provides the opportunity to increase the benefit amount without going through the medical underwriting process again. The option is offered typically, once a year, to account for inflation or increased earnings.¹⁰

• Cost-of-living adjustment (COLA):¹¹ A rider that states the insurance company, will increase your benefit while you are receiving benefits, to account for inflation

• Waiver of premium: This means that premiums are waived while you are disabled and receiving benefits. Guardian goes a step further by offering a plan that waives premiums an extra six months after you recover and benefits end.

• Non-cancelable provision: This states that the insurer cannot raise your premiums as long as you keep paying them. Typically goes with a guaranteed renewability provision.

• Guaranteed renewability: A provision which states that the insurance company will not cancel your policy or change the terms and features as long as you continue paying your premiums – but they can raise your premiums (unless the policy is also non-cancelable).

• Presumptive disability benefit: Waves your waiting period if you suffer a catastrophic disability, such as losing the use of your hands, feet, or ability to speak.¹²

• Retirement protection: Contributes towards your retirement funds while you are disabled and unable to work.¹³

A disability insurance policy is a significant investment in your financial future. Make sure to go through all the provisions to understand the conditions of your contract and the circumstances under which you will be paid a benefit.

How can you get disability coverage, and what will it cost?

There are two basic ways to get a disability insurance policy:

Group disability insurance through your work or an association

While group practices and healthcare networks more commonly offer short-term disability coverage, many also offer the option for long-term disability coverage, especially when a group practice or network employs several high-earning practitioners. If you’re self-employed or a sole practitioner, you may be able to get group disability insurance through a professional association.

Either way, group coverage can be an excellent choice: Because the company or association is buying for a large group of people, the premium is typically lower than for an individual policy. In addition, your HR department (or the association’s management) will likely have more expertise and leverage than an individual would to negotiate favorable terms, and they will act on your behalf to ensure the financial stability of the insurance company. An added benefit to getting a policy through your employer is that they may also subsidize a portion of the premiums, further lowering your cost.

Along with these benefits, there can also be a few drawbacks. Because these policies are effectively bought "in bulk," disability insurance companies typically offer fewer options to tailor the policies to individual needs. If some or all of the premiums are paid with pre-tax dollars, then at least a portion of the benefit you get down the road may be taxed. Finally, if you leave the practice, network or association, in most cases, you'll also lose your coverage.

Individual disability insurance

This is a policy you purchase for yourself, so you can tailor it more finely to your specific needs. Since it is paid for with after-tax dollars, the replacement income it provides is also tax-free. It’s typically bought through a financial professional; if you don’t have one, or if that person doesn’t have a lot of experience with disability insurance, a Guardian financial professional can give you a disability insurance quote. Why not a regular insurance agent? Because these insurance policies are meant to replace income – it's a key part of your overall financial strategy. When you discuss disability insurance with your advisor, be prepared to share as much as you can about your financial situation and goals, so that they can help tailor your disability policy to your needs.

Cost considerations

Disability insurance is one of the most individualized types of insurance you can get, because every person’s situation is unique. Expect the cost of disability insurance to range between 1% to 3% of your annual income. Depending on your specialty, you can expect to pay $84 to $173 per month or more.[xiv] Your actual premium amount will depend on several factors:

Once you apply for a specific policy, there will be an underwriting process (similar to that for life insurance) in which the company assesses your age, lifestyle, and health – and you'll be asked to take a medical exam. It may seem like a lot to think about, but with the help of a good financial professional, you can come up with a disability plan tailored to your needs at a cost you can afford. A final piece of advice: don't put it off – the younger and healthier you are, the more affordable it may be.

Why Guardian was ranked among “The 5 Best Disability Insurance Policies for Dentists in 2023".¹⁵

Leveragerx.com ranked Guardian Provider Choice #2 in its list of the “5 Best Disability Policies for Dentists in 2023.” Why? “Their total disability policy is unmatched. If you become totally disabled and have a true own occupation definition of disability, you can still claim your maximum benefit, even if you’re working another job. This company also provides student loan protection and the ability to increase your benefit amount every three years.” And unlike some other providers, ”Guardian has no limitation on disability due to mental illness”*.

In addition, Investopedia named Guardian the Best Overall Disability Insurance Company for 2023, with a wide range of plans and options to meet the needs of individuals and businesses.¹¹ The fact is, we have more experience than most: Guardian has been helping families protect their financial well-being for over 160 years. With high scores for financial soundness from independent rating agencies, our 12 million customers can trust us to be there when they need us most.¹⁶

Guardian can help

If you want to know more about getting a long-term disability insurance (or physician disability insurance), speak to a Guardian financial professional. Here’s how to find someone near you: