Disability insurance: Get some financial peace of mind

Here's a number that grabbed my attention recently:  $180,577. According to the Annual American Dental Education Association Survey of Dental School Seniors, that's the average educational debt for a dental school graduate in the class of 2011. Some recent graduates might be looking at an even larger bill for their dental education.

I didn't face such a large debt when I completed my dental education 25 years ago, but I still made a serious investment before I spent a single dime on my dental practice. Like many dentists, I don't like taking risks, especially when it comes to my profession and my family. That's why I have always made sure I have the right kinds of insurance and in the right amounts.

As a new dentist, many different types of insurance can make up your safety net -- two important types are life and disability insurance.

If you ever intend to own a practice, you need both life and disability insurance. Here's why: When you take out the loan to buy or build a practice, some lenders require you to show proof of life and disability insurance as collateral for the loan, in case you die or become disabled before the loan is paid off.

If you never intend to be a practice owner, you still need both life and disability insurance. If you became disabled tomorrow, could you keep up with your bills? Your student loan payments? Or what if the unspeakable happened and you lost your life; would your loved ones' financial future be secure?

It's smart to shop for insurance when you are young and healthy. That's because you have a much better chance of qualifying for the coverage you want at the best rates when you are young and healthy. Your health can change at any moment and possibly make you uninsurable or unable to qualify for the insurer's lowest rate.

When it comes to disability insurance, know what coverage features you need.  Disability policies vary quite a bit. Look for a policy with an own occupation definition of disability that pays full benefits if you choose to work in another occupation while totally disabled from dentistry.

There are other coverage features to consider as well. For instance, some disability policies permit you to collect partial benefits without being totally disabled. It's easy to see how this would be important, since not all disabilities are total or permanent and even a partial disability can dramatically affect your income.

Don't think you have to figure all this out by yourself. Dentists' needs aren't all the same and insurance policies aren't one-size-fits-all. When deciding how much coverage you need, an expert can help. When I have questions or concerns, I talk to my ADA Members Insurance Plans specialist, who is a licensed agent. I have a direct phone number and email address so I receive personalized service every time! It gives me a sense of security knowing that if I ever need to file an insurance claim, my specialist is always there for me.

Tom Paumier, DDS, is the chair of the ADA Council on Members Insurance and Retirement Programs, which oversees the ADA Members Insurance Plans, underwritten and administered by Great-West Financial. For more information, visit www.insurance.ada.org.