The American Dental Association was founded in 1859 and includes over 157,000 members, working on behalf of dentists nationwide to improve practices and the profession. Disability insurance is extremely important for any dentist to own as it insures their (generally) high income level in the event of an accident or sickness.
The ADA offers its own disability insurance coverage to members, currently through Great West Life. However, the ADA coverage has some major limitations compared to a comprehensive individual disability policy, and other factors that should be considered by dentists signing up for the plan:
- Premiums automatically increase every 5 years based on age bands. Individual market policy premiums are guaranteed not to increase when they are stated to be “non-cancelable”
- ADA plan premiums are not guaranteed and can be increased for the entire association at any time
- Current ADA premiums reflect an approximate 40% discount off normal rates due to favorable claims experience by the insurance company – if claims increase, the 40% discount can be reduced or eliminated, increasing rates for members
- The insurance company can potentially terminate the ADA plan at any time, leaving the dentist in the hands of a new insurance company which may offer lesser benefits or charge higher premiums
- Dentists must maintain membership in the ADA to keep their coverage
- Waiver of premium requires the dentist to be on a disability claim for 6 months. The waiver also only begins on two specific dates, May 1st and November 1st. With this timeframe, it’s possible the dentist could continue paying for coverage almost 12 months after they become disabled.
- Waiver of the elimination period only applies to recurring disabilities within 90 days and must be the same sickness or injury. Most individual companies waive the elimination period for up to 12 months, and one carrier waives the elimination period for 5 years.
- No waiver of elimination period for presumptive disabilities (i.e. loss of both hands, both feet, one hand/one foot, hearing, or speech)
- Guaranteed future increase options are limited to $1,000 per year and a maximum of 5 option dates (e.g. a maximum increase of $5,000). Individual market policies generally allow for much higher option amounts and less restrictive timeframes
- No automatic annual increase in benefits to keep pace with inflation
- No presumptive disability benefit
- No additional benefits for a catastrophic disability
- Partial disability benefits require a loss of time and/or duties and a minimum 20% loss of income. Individual policies may not require a loss of time or duties, and/or only require 15% loss of income.
- Recovery benefits are only available for a maximum of 3 months as an optional extra cost. A good individual policy will include recovery benefits up to the maximum benefit period (such as age 67).
- Cost of living adjustments are tied to the change in the Consumer Price Index, not compounded at a guaranteed rate like some individual policies.
- Days of disability must be consecutive to satisfy the elimination period. If you return to work for even one day, the elimination period can start over again. Individual policies generally have an “accumulation period” that do not require consecutive days of disability to satisfy the EP.
- No coverage for retirement contributions. Many dentists earn high salaries and contribute thousands of dollars per year to their retirement accounts. An individual policy can cover these retirement contributions in the event of total disability, while the ADA plan does not.
- No lifetime coverage available for total disability with the ADA plan. Some companies on the individual market still offer lifetime coverage in the event of a total disability.
- Limit of 12 months or 24 months for claims due to alcohol or drug abuse and unintentional self-inflicted firearms injuries
If you would like a personalized quote for a disability policy or have questions about how the ADA plan benefits compares to what is available on the individual market, please complete the short form below. Due to the number of factors involved with creating disability quotes, instant online quoting is not available for this product. You can also give us a call at 1-800-571-2980 for immediate assistance or send us an e-mail at Info@terminsurancebrokers.com.