Insure Before You Invest

March 15, 2016
DMD Staff

Building wealth is important, and saving for retirement should always be top of mind when developing a saving and investing plan. But many people-dentists included-don't pay enough attention to a step that should take place before you even begin an investing strategy: making sure you are insured against life's curveballs.

Building wealth is important, and saving for retirement should always be top of mind when developing a saving and investing plan. But many people—dentists included—don’t pay enough attention to a step that should take place before you even begin an investing strategy: making sure you are insured against life’s curveballs.

Malpractice Insurance

Estimates show that 1 in 10 dentists is likely to face some sort of liability claim over the course of their career. Finding the right insurer and the right policy for you isn’t always easy. Make sure that dental malpractice is a core component of the insurer’s offerings, and not a side business the company got into because they thought there might be a great deal of intellectual overlap. While there is some overlap in malpractice law, there’s enough differentiation that you’ll feel more comfortable with a firm that knows our specific profession

Health and Disability Insurance

No one expects to face poor health or a medical disability, but to twist a famous line from When Harry Met Sally into a double negative, we can’t all NOT face poor health and a medical disability. The health insurance you provide for you and your practice’s employees may cover disability for certain conditions, but not for others, and it won’t cover anything at all once you’ve sold your practice and proceeded to retirement. A health savings account, long-term care insurance, and additional disability insurance can provide monthly income in the event that you fall unexpectedly ill or are unable to work due to a sickness or injury. Look carefully at the plan information to make sure you know what is considered a disability and if there are limitations on the income you can expect.

Home, Auto, and Business Insurance

Good home and auto insurance is essential (and, in many cases, required by law). But so is business insurance. Your policy should cover your practice against not just theft, vandalism, other possible damage, but also general liability coverage. If one of your employees is in a car accident while on a business errand, you are potentially responsible for medical bills and litigation that may result. If during periods of vacation you have another dentist to help fill in, be sure your insurance carrier is notified, so that a provision extends the benefits of your policy to the replacement dentist for a temporary period of time. Look into the workers’ compensation insurance carried by any independent contractors you employ.

Life Insurance

This is a much bigger topic, and one that we’ll cover in depth in several upcoming features. The reasons to get life insurance are pretty clear, and most people recognize that it’s an essential piece of the financial puzzle. But there are many different kinds of life insurance and many types of policies. Many of them, including annuities, have a direct connection to your retirement savings as well. We’ll cover the two basic types of insurance—term and permanent—in an upcoming multi-part article.

As your life and business change, review your policies to make sure your insurance needs have changed as well. This may include staffing changes, personal life changes, and financial changes, among others.