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Is Dental Insurance Really Insurance?

Do you have homeowner’s insurance? Do you pay the same premiums as your friends? Do you have auto insurance? Are your premiums the same as your neighbor’s? We all know that the premiums are different because of factors such as our age, location of home and car, and what we choose to insure. How about life insurance? That one only pays after our death and you need to have a physical before you can even purchase life insurance! What about dental? Did you have a dental exam before your employer obtained your dental “insurance”? No?

Dental “insurance” is really a defined benefit plan, not insurance. It reimburses you for certain procedures that have been defined by the contract established by your employer. The greater the amount paid monthly for benefits, the broader the range of services and amount paid in benefits. It’s like going to the grocery store and having $1000 in food benefits, but the benefits don’t cover all food and when the $1000 has been used, you pay as you normally would.  You don’t stop eating.

Here is something interesting! Dental “insurance” first began in the late 1960’s and provided $1000/year in benefits. That was great because the most expensive crown in the US was in Beverly Hill, CA and was $90. Even if they reimbursed at 100%, which they didn’t, you could have had 10 crowns done each year. With inflation, you may be able to do 1 ½ crowns today. But we often see the dental plans reimbursing the same $1000/year. I wonder if the monthly premiums are the same as in 1968?

Since dental “insurance” is not meant to cover major occurrences in our lives such as our homeowners or auto policy, and you have a defined yearly amount of benefits, the question is, have you decided what level of care is appropriate for you? Your defined dental benefit plan can help you attain that level, but it will not cover everything. You get to decide who determines the level of care that you want – you or the insurance company.