Regardless of how your professional and personal life unfolds, you will have to manage risk throughout your career. For periodontists, those risks, and the insurance needed to address them, can change significantly as you move from training, to practice ownership and eventually to retirement.

Here is a brief risk-management journey through the different stages of a periodontist’s career.

Right from the start: protect your most valuable asset

Insurance should be familiar to you, even as a periodontal resident. To begin with, you should have health insurance for yourself and your dependents, and that will remain a constant throughout your career.

Your ability to generate income is one of your greatest assets and is based on your health. If something were to happen to you, it could have a significant impact on your cash flow. Whether you’re just starting your training or you’re already in practice, one of the first things you need to consider is protecting your ability to earn an income.

While health insurance can help pay medical expenses associated with an illness or injury, an entirely different type of insurance is designed to replace a portion of the income you may lose while you are unable to work. This insurance is called disability income insurance, or “DI” for short.

For periodontists, whose livelihood depends heavily on the ability to perform highly skilled clinical and surgical procedures, understanding how a disability policy defines disability (and specifically how it applies to your occupation) is particularly important.

Protect the ones you love

It is possible that during your residency you will have dependents, a spouse, children, and financial obligations, such as student debt. Should this be the case for you, you may want to provide for your loved ones in the event of your death.

You can address this need is through the purchase of life insurance. There are many different types of life insurance, but generally they fall into one of two categories – permanent, or term. Term life insurance provides coverage for a specific duration, or “term,” after which it expires. Term life insurance is a good option for periodontal residents because it provides substantial protection at a relatively low cost during the low to no income residency years.

Protect yourself from lawsuits

Professional liability insurance, frequently called malpractice insurance in the medical and dental professions, is an important consideration from the moment you start practicing. Having the appropriate type and amount of professional liability coverage in place can help protect you and your assets in the event of a malpractice claim.

The time to understand your malpractice insurance coverage is not during a lawsuit, when it’s too late to make changes. Research your options and understand your policy, including its coverage limits and whether it is a claims-made or occurrence policy. For periodontists, it is particularly important to make sure your coverage reflects the procedures you perform and the scope of your practice.

While most practitioners understand the need for professional liability insurance, it is also important to review the liability limits on your auto and homeowners’ coverage and consider whether a personal umbrella policy is appropriate. A lawsuit can occur in many ways, so both professional and personal liability exposures should be considered.

Starting a periodontal practice? Protect your business

Today’s periodontist faces several challenges when sickness or injury results in a disability. Income may cease, while both personal and office expenses continue, creating an added drain on the resources of the periodontist and their family.

You may have purchased disability income insurance to replace a portion of lost income , but how will you cover ongoing practice expenses or practice loan payments? For this reason,

It is important to understand that business overhead expense insurance is not personal income replacement coverage. Business overhead expense is a separate type of coverage designed to help pay eligible office overhead expenses that continue when you are disabled. Business loan protection disability insurance can help address  practice loan payments in the event of a covered disability.

A (frequently abbreviated to “BOP”) is an insurance policy designed to protect your periodontal practice from a variety of property and liability risks. Bundled into a single package, a BOP typically provides property and general liability protection and may be supplemented with additional coverage based on the risks facing your practice.

EPLI, cyber liability and workers’ compensation

Periodontal practices also face risks associated with employees and the sensitive patient and business information they maintain.

Employment Practices Liability Insurance (EPLI) can provide coverage against certain claims made by employees alleging wrongful termination, harassment or discrimination.

Workers’ compensation is a separate form of insurance that provides benefits to employees who experience qualifying work-related injuries or illnesses. Requirements vary by state.

If you are going into practice with a partner…

Multi-owner periodontal practices should consider having a buy-sell agreement that addresses both death and disability.

Buy-sell agreements are contracts between business owners for the purchase and sale of a practice interest in the event of specified circumstances such as death, disability or retirement. The agreement can establish how the practice interest will be valued and how ownership will be transferred. In the event of death or disability, buy-sell obligations may be funded with insurance.

In a life insurance-funded buy-sell arrangement, life insurance may be owned by the business or by the individual owners, depending on how the agreement is structured. In the event of an owner’s death, insurance proceeds can help provide the funds necessary to help complete the purchase contemplated by the agreement.

A disability event can be more complicated because a buyout may not be triggered until an owner has been disabled for a specified period. During that time, the practice’s expenses continue—which is one reason business overhead expense coverage may be important.

Disability buy-out insurance can help provide funding for the purchase of a disabled owner’s interest in accordance with the terms of the buy-sell agreement.

Managing personal risk as your career evolves

In the early years of your periodontal practice, you are likely to have many expenses, whether from starting or purchasing a practice, or from changes in family and lifestyle: supporting a spouse or children, carrying a mortgage, or managing other financial obligations.

If cash flow is tight early on, sufficient term life insurance can be one way to help protect your family while these financial obligations are greatest.

Mid-career: the growth years

Once your cash flow stabilizes and shows an increasing positive trend, it is a good time to reassess your life insurance needs.

Depending on your circumstances and long-term goals, permanent life insurance may be one option to consider alongside the term life insurance you obtained earlier in your career.

Permanent life insurance is often designed to remain in force as long as applicable policy requirements are met and may accumulate cash value. Whether it is appropriate depends on your financial circumstances, objectives and broader financial plan.

Think about long-term care while you’re healthy

Planning for longevity is an important consideration as you move through your career. It is generally better to evaluate your options while you’re healthy, since age and health can affect both eligibility and the cost of long-term care insurance.

An unforeseen illness, injury or cognitive condition can create a need for long-term care and potentially significant expenses during retirement.  Determining the right long-term care strategy involves considering your age, health, assets, family circumstances, geographic location, and overall retirement objectives.

A financial professional can help you evaluate the available options and determine whether long-term care insurance or another planning strategy may be appropriate for you.

Transitioning to retirement? Reassess your exposure

As you plan for retirement, take the opportunity to reassess your risk exposure. This means adjusting your professional and personal coverage to meet your changing needs.

For a periodontist, retirement may involve selling or transitioning a practice, changing professional liability needs and reevaluating business coverage. Personal insurance needs may change as well.

Insurance can also be an important component of estate planning and may be used to provide for loved ones or causes you care about after you are gone.

Frequently Asked Questions About Insurance for Periodontists

What types of insurance should a periodontist consider?
Depending on career stage and circumstances, a periodontist may need disability income, professional liability, life and personal liability insurance. Practice owners may also need business overhead expense, business owner’s, cyber liability, EPLI, workers’ compensation and insurance to help fund a buy-sell agreement.

Why is disability insurance important for periodontists?
Periodontists rely on their ability to perform highly skilled clinical and surgical procedures to earn an income. Disability income insurance can replace a portion of income following a covered disability, while business overhead expense insurance can help practice owners pay eligible ongoing business expenses.

What insurance should a periodontist review when buying or owning a practice?
Periodontal practice owners should consider professional liability, property and general liability, business overhead expense, cyber liability, EPLI and workers’ compensation coverage, among others. Those with partners or practice loans may also need insurance designed to address buy-sell obligations or  business loan payments.

Insurance needs change throughout a periodontist’s career

There are many decision points and circumstances to consider, and there is no “one size fits all” strategy.

From periodontal residency through practice ownership and retirement, your insurance should evolve along with your career. Working with an experienced insurance professional who understands both dentistry and the needs of periodontists can help you identify potential gaps and evaluate appropriate solutions as those needs change.

Treloar & Heisel has worked with dental professionals for decades and has a longstanding relationship with the American Academy of Periodontology. A periodic insurance review can help determine whether the coverage you have today still reflects where you are in your career.

About Treloar & Heisel

Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.