How Can You Do Without High Limit Disability Income Insurance?

I’ve been working with an oral surgeon recently on his life insurance and he asked about disability income also. He makes nearly $1 million a year, obviously very good at what he does. He’s part of a large dental group with 300 or so offices nationwide so I asked him if they offered group coverage for disability income for someone making that much.

I’ve talked in the past about how traditional disability income insurance is usually capped at 65% of $300,000 and that is with group and personal combined. Kind of like health insurance they don’t want you stacking policies. So I found out that Aspen Dental does have a group disability plan with a maximum benefit of $15,000 a month. Now if it were me that would be OK, but we’re talking about dentists, orthodontists and oral surgeons that are making between $400,000 and $1 million a year. $15,000 equates to $180,000 a year. That is the equivalent of about $230,000 before taxes.

So with Aspen Dental’s current disability income group plan, almost the best case is that if you became disabled you would get about half of what you are currently making. It’s true that you’ll be saving commuting money, but with disability very often other costs go up. No one is saying that a person ought to better off if they become disabled, but if you are living on $400,000 to $1 million a year, it’s going to be major lifestyle change to have to get by on the equivalent of $230,000. So what’s a tooth doctor to do?

There is a new product on the market that is offered through a non traditional company that can supplement disability benefits up to $250,000 a month. Because it isn’t offered by a traditional disability company it can be used to supplement group or personal coverage that falls short as is the case with the several hundred employees of Aspen Dental. Just to be clear, Aspen Dental has group coverage and I am not in any way saying it’s not a good deal. What I am saying is, for most, it isn’t enough of a good deal. The Aspen Dental benefits are inadequate in that area. Aspen Dental’s group disability would be a train wreck for nearly all of their highly paid employees. To be sure those employees could supplement the Aspen Dental benefit through a traditional company, but only up to a maximum combined benefit of about $17,000 a month, still far short of what most of their employees need.

I reached out to Aspen Dental and asked if I could provide this information to their employees and was told no because that would be stepping on the toes of their group benefit carrier. I reached out to their group benefit provider to see if I could offer it through them and have not been able to get any calls returned.

Bottom line. Offering group coverage at all in this day and age is to be commended and for that I applaud Aspen Dental. Not allowing access to their employees to find out about a supplement that could mean the difference between maintaining or losing the lifestyle that Aspen Dental has helped them grow accustomed to is shameful. If you have any questions or would like more information on high limit disability income insurance, call or email me directly. Let’s talk.