The first part of a good financial plan is to insure against financial catastrophe. Having an Insurance plan as a dentist or other high income is an absolute must. And before I begin I want to remind you that everything I have learned is from the blogs, books, and courses found in my “Financial Education Resources” tab up above. If I can learn this, so can you.
Once you are a dentist or physician you need Professional Liability (malpractice) insurance. I don’t need to go into detail of why as you already know. You can’t even get credentialed with insurances without it. So make sure before you practice for even one second that you have it in place. Getting sued without this is a financial catastrophe.
You also need Health insurance for you and your family. This also goes without saying. Having health problems without health insurance would defineitly cause a financial catastrphe.
Make sure you pick the correct policy for you and your family first. Discuss with a professional your family size, medical need, and other information. Decide together what policy is best for you and your family. Once you have decided on that, get an HSA if it is a High Dedictible Health Plan. If not, don’t worry. Picking the right health plan for you and your family is more important that having as HSA.
Life insurance is also necessary if someone is relying on your income. So if you have a spouse/and or kids then usually you will need Life Insurance unless you are already financially independent or maybe if your spouse makes a lot of money. Your death can be a financial catastrophe to your family. I recommend Term life insurance only. For most people, whole life is not needed and even not recommended.
Disability Insurance is also usually needed. Just like with Life Insurance, unless you are financially independent or your spouse makes enough money for your family to be taken care off if you are disable, Disability Insurance is a must. Make sure it has a true own occupation rider or is a true own occupation policy. Mine is with Guardian and is great.
Personal Liability Insurance
Personal Liability Insurance: This protects you against lawsuits for liability that is not from practicing dentistry. This is also very important. There is already personal liability coverage in your home and auto policies. But as a dentist, the minimums aren’t enough. Increase your liability amounts in both of those policies. Also get an umbrella policy that goes above and beyond those. Personal liability coverage is cheap and is totally worth it.
Most other insurances are probably unnecessary. I don’t insure my phone or my appliances, trips or anything else. These aren’t financial catastrophes. The moral of the story is to insure against financial catastrophe and insure well. But don’t insure against non financial catastrophes, you are likely to lose money on the deal (You are likely to lose money on insuring against financial catastrophes as well but is worth it and necessary).
If you need more information about anything in this blog post there are great resources over at the White Coat Investor. I highly recommend you check it out. You can also contact me with any questions.
-Debt Free DDS
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*Nothing on my website is professional or legal advice. I am only sharing information that I have learned and it may or may not be accurate. I am not liable for any problems you may have by following this advice. Please do further research and get professional and/or legal advice about any of these topics. This post likely contains affiliate links. This site could be paid for clicks or purchases made through these links.