Is Dental Insurance, Insurance?

| November 6, 2008

I guess that depends on your definition of insurance but when you compare dental insurance to the other insurances that you carry on your home, car, life, and medical it seems like more of a dental maintenance plan rather than insurance.

Dental Insurance … it’s not really insurance at all

Insurance is defined as a third party taking the risk of a catastrophic loss.  The annual limit of most dental plans is a maximum reimbursement of $1200.

Now, you may not have $1200 in your wallet and it is a lot of money, but there is nothing catastrophic about $1200.  It lacks the catastrophe that insurance was designed to protect us against.  If you lost your home to a fire, totaled your car, or had a major medical surgery that required a long hospital stay, that would be catastrophic.

If your other insurances worked this way, there would be rebellion!

Say for example that you totaled your new car the insurance man offered $1,200 total settlement.   You would call the state insurance agency, your lawyer, the Better Business Bureau, 6 on Your Side and complain.  We have expectations of coverage for losses that would be significantly unmet.  However, this is exactly how most dental “insurance” works.

So, lets call dental coverage what it really is… a maintenance plan

If your car insurance only covered oil changes twice per year, annual tire rotation and wiper blades, and a tune-up every three years, it would be useful to have, but you wouldn’t consider it insurance.

A dental benefits plan helps us keep our mouths in good health but if something major should happen that requires a crown, root canal, dental implant, etc, our dental “insurance” isn’t going to cover the entire cost.  And if we have hit our annual maximum, it will be all out of pocket.

The $1200 annual maximum hasn’t kept up with inflation

When dental insurance was first introduced in the late 60s the annual maximum was about $1000.  If you use a 3% inflation rate, dental insurance today should cover over $5000 per year.

Is a dental benefits plan useful to have?

Absolutely!  If you keep in mind that it is designed for the maintenance of your teeth not to cover everything.

Most dental benefit plans cover the majority of the fees for cleanings, x rays, and doctor exam.  These procedures are essential to maintaining your teeth.  When problems do arise, your dental benefits will go a lot farther if you catch the decay when it is small and easy to fix with a small filling.

Decay left untreated doesn’t disappear.  It just gets bigger and costs more to fix and you will have more out of pocket costs to cover.