Dental Residency Disability Insurance: The One Key Benefit You Can’t Miss

If you’re in the midst of a general practice residency (GPR), Advanced Education in General Dentistry (AEGD), or dental specialist residency program, you’ve probably heard talks about the importance of disability insurance for dentists. But like most, it’s hard to think about the “what ifs” of becoming disabled, especially when you have limited income.

That said, why buy disability insurance during dental residency versus waiting until later in your career? It comes down to future purchase options (FPOs) and the large discounts that dental residents can sometimes qualify for.

What does disability insurance for dentists cover?

Before getting into the nitty-gritty of FPOs, let’s briefly go over the two main types of disability insurance for context: short-term disability and long-term disability coverage. 

Short-term disability policies are usually provided through an employer-sponsored plan that covers injuries and illnesses that last for three to six months. Long-term disability insurance (LTD) provides a more substantial form of coverage by replacing your income for a few years or up to retirement, depending on the policy benefit period.

Your employer might offer LTD as part of your benefits package, or you might seek coverage from a professional association, such as the American Dental Association (ADA). Additionally, you might opt for an individual policy that provides more comprehensive coverage to supplement your existing disability insurance plan.

Regardless of where you get coverage, long-term disability insurance policies have many variations — making it a complex financial product.

Definition of disability: Own-occupation vs. any-occupation 

Disability policies have many nuances. But one of the key policy details that can dramatically change your coverage is the definition of disability.

A standard disability policy has an any-occupation definition of disability that only provides payout if your injury or illness prevents you from working altogether. This is a strict definition that makes it challenging to file a disability claim because you must prove that you can’t work in any job due to a total disability — even that means taking a lower paying desk job.

Dental residents have spent hundreds of thousands of dollars to pursue dentistry, and have a high salary on the horizon. Having an any-occupation definition simply isn’t enough for your profession. Instead, dental professionals need an own-occupation definition of disability that pays disability benefits if you can’t work in your dental specialty. With a true own-occupation policy, you can choose to continue working in another capacity while still receiving disability income.

One key benefit to getting disability insurance as a dental resident

Fewer disability insurance companies are offering dental resident discounts, although some do still exist. That’s why taking advantage of current offers to secure a policy with lower costs is so important. But the top reason to buy disability insurance during dental residency is to lock in the future purchase option (FPO).

Buying disability insurance can be an invasive experience as you’re generally required to complete a medical exam and submit extensive personal and family health histories. As you get older, you’re more likely to have pre-existing health conditions that can limit coverage, increase costs or result in policy exclusions. It’s best to get disability insurance when you’re at the youngest and healthiest stage of your career.

But you wouldn’t want to buy a policy that only covers your existing dental residency income long-term. Instead, you should include a future purchase option that allows you to increase coverage as your income grows without additional medical underwriting.

Each disability insurance carrier offers varying FPO riders, some of which allow you to increase coverage annually, periodically (e.g., every three years) or due to certain events (e.g., having a child or losing employer group coverage).

Dental residents shouldn’t view disability insurance as an immediate benefit, but rather as a long-term investment that allows you to increase coverage to align with each stage of your career.

Discounts available for dental residents buying disability insurance

Historically, a few select agencies retained the best discounts for dental residents buying disability insurance.

However, more agencies now have access to the fewer discounts that remain.

Any agent you use to get a dental resident disability insurance discount quote needs to be willing to refer your business elsewhere if they don't have the best price.

At SLP Insurance, that's what we strive to do for anyone who fills out our quote form on the page below.

Just note that the best discount you might get might not be related to your dental residency specifically. It could be because you're moving states for example.

Special considerations for dental specialist disability insurance

If you're doing a dental specialist residency in something like Orthodontics, Endodontics, Periodontics, etc., your need for a future purchase option is more extreme than for most general dentists because your future income is much higher.

You also might need to look into special supplemental policies that cover more than the maximum benefit traditional companies will underwrite. This is particularly true for any dental specialist earning more than $400,000 a year with a large mortgage payment.

Why dentists and dental specialists need disability insurance

As a dental resident, your primary asset is your ability to work as a dentist for years to come. With six-figure dental school debt and financial goals, like buying a home or opening a dental practice, your livelihood depends on being able to physically and mentally perform your job duties.

Here are a few reasons to consider buying disability insurance during dental residency:

• The odds of becoming disabled aren’t in your favor. According to the Council for Disability Awareness, about 25% of today’s 20-year-olds will become disabled before they retire. That’s based on a strict definition of disability, not one that takes into account the many injuries and illnesses that could affect your ability to work in your dental field.
• Your age helps determine your premiums. The younger you are, the cheaper your premiums will be. Even with a limited income, there are policies and discounts that can provide sufficient coverage during residency with options to increase coverage at a later date.
• Individual disability insurance is portable. If you solely rely on an employer-sponsored group policy, you’ll lose coverage any time you change jobs. But an individual policy will follow you throughout your career. Keep in mind that you’ll be responsible for coverage as a practice owner, which will be significantly more expensive if you wait until you’re older to apply for an individual policy.
• Larger benefit-to-income ratio. When buying disability insurance, you can generally expect to buy a policy for up to 60% of your gross income. But as a dental resident, you can get up to a $5,000 monthly benefit amount, which is probably closer to 100% of your income (give or take).

The great thing about buying an individual policy is that you can customize coverage by adding policy riders that make sense for your situation and budget. For example, you can explore options for partial disability benefits, cost-of-living adjustments and catastrophic disability benefits. Even if you can’t afford much coverage at the moment, it still makes financial sense to buy a policy with a future purchase option now while it’s cheaper.

Get custom disability coverage for your individual needs

As a dental resident, you aren’t necessarily buying disability insurance for the immediate benefit. You’re really buying it to take advantage of the future increase option that pays off when your income increases after residency and beyond.

Not sure what level of coverage you need? SLP Insurance helps dental residents understand policy options that’ll serve them well into the future. Fill out the form below, and our team will reach out to discuss coverage preferences and available discounts to find the best policy for your needs.