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How Insurance Fits into Your Family’s Financial Plan

You can help provide financial stability for your family
How Insurance Fits into Your Family's Financial Plan banner image

A comprehensive financial plan is more than just a series of calculations. It represents your family’s future security. Financial planning can help you afford expenses related to raising a family, your children’s education, a comfortable retirement and a future dream home or vacation. But any plan is incomplete without adequate protection.

The loss of a primary wage earner can devastate families not just emotionally but financially, too. Studies show that almost half of households would face financial adversity within six months of losing their primary breadwinner1.  Insurance is an important component of any financial plan. Here are some things to keep in mind.

The impact of lost income

If your family relies primarily on your salary, contemplate how they would manage basic living expenses — along with bigger items such as debt and savings goals — without your income:

  • Debt: Many dentists juggle multiple expenses such as car payments, a home mortgage, and personal and practice loans. And more specifically, newly graduating dentists have the added burden of student debt. On average, a 2018 graduate left dental school owing nearly $300,0002.
  • Family and caregiver expenses: The average cost to raise a child through age 17 is estimated to be $233,6103. Caregiving can add another financial strain to families — the average out-of-pocket cost to provide for an aging parent or relative is now estimated to be $138,0004.
  • Savings goals: Saving for your children’s education while also pursuing your long-term retirement savings goals becomes a greater challenge when there is only one household income.

Meaningful coverage

Life insurance can help provide the peace of mind and financial security your family may need to help cover these and other expenses in the event of your premature death. But the first step is determining the proper limit of insurance for your needs. The Great-West Financial coverage calculator for the ADA Members Insurance Plans offers a good place to start. This quick and easy online tool helps you assess debt, financial goals and insurance coverage needs to better protect your family against financial hardships in the immediate and distant future.

ADA members can apply for up to $3 million in life insurance, plus up to $1 million in additional coverage with the Accidental Death option. What’s more, adding this protection at strongly competitive ADA group plan rates provides members cost savings advantages. For example, $1 million of coverage for a 35-year-old female dentist member would cost only $14 a month* under the ADA members Term Life plan, which is group experience rated and offers coverage volume discounts.

Additional limits of coverage for spouses and children

Life insurance for your spouse and dependent children adds another layer of protection to your overall financial plan, and it’s incredibly affordable under the ADA insurance plans. Apply for term life coverage limits in increments of $50,000 up to $1 million on the life of your spouse and $15,000 per dependent child — and take advantage of the group rate savings for ADA members.

Protecting your loved ones and your livelihood

The ADA life insurance plans are richly designed to include a benefit lock-in feature and additional options for accidental death benefits, disability waiver of premium and future convertibility (without underwriting), which further enhances the cost value to ADA plan participants.

We hope you’ll take a moment to consider these important benefits and cost advantages of ADA membership as you develop — or update — your estate and financial plans. Visit insurance.ADA.org for more information.

Mr. Kacirek, FSA (fellow of the Society of Actuaries), MAAA (member of the American Academy of Actuaries) is vice president, Specialty Insurance Markets for Great-West Financial, which administers the ADA Members Insurance Plans.

*Monthly premium payment for the Preferred rate class is rounded to the nearest dollar, includes a 2% service charge, and is only available through Autopay. ADA Term Life premiums increase annually based on age, are effective as of 1/1/19 and include a 48% Premium Credit discount that shares favorable financial results with Plan participants. The Premium Credit discount is not guaranteed, but reevaluated periodically. Preferred rates are available to the healthiest individuals who have low-risk health and lifestyle characteristics. Your eligibility will be determined through medical underwriting. RO773496-0319

References

  1. LIMRA, 2018 Insurance Barometer. Available at: https://www.limra.com/research/abstracts_public/2018/2018_insurance_barometer.aspx. Accessed March 21, 2019.
  2. American Dental Education Association. Educational Debt. Available at: https://www.adea.org/GoDental/Money_Matters/Educational_Debt.aspx. Accessed March 21, 2019.
  3. U.S. Department of Agriculture. The Cost of Raising a Child. Available at: https://www.usda.gov/media/blog/2017/01/13/cost-raising-child. Accessed March 21, 2019.
  4. Favreault M, Dey J. Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief—Revised February 2016. Available at: https://aspe.hhs.gov/basic-report/long-term-services-and-supports-older-americans-risks-and-financing-research-brief. Accessed March 21, 2019.
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