"That'll never happen to me." (And some estate-planning tips for when it does.)

We’ve all thought it or maybe even said it out loud. We hear about a colleague who suffered a stroke at a young age or died unexpectedly. We wonder about those they left behind, and hope they’re taken care of financially. Then we reassure ourselves, “That’ll never happen to me.” But what if it does happen to you?

In the last year, I’ve had two close calls that have forced me to look hard at what I’d leave behind if I were to no longer be able to practice dentistry, or if I were to pass away. I turned 50 a while back, and finally got around to the dreaded colonoscopy. They removed seven polyps with five containing cancerous cells at various stages. My gastrointestinal (GI) surgeon flooded me with information about my high risk for colon cancer and the need for yearly scope procedures. He explained in some detail what I’d be in for if those cancerous cells hadn’t been caught in time and were allowed to spread. Let me just say that drinking the nasty prep cocktail and all that entails is far easier than what could have been in store for me and my family.

The second event happened this summer while I was having the time of my life fishing in Alaska. While everyone else took a break, I went back to the mouth of the river to try my hand at catching a wily salmon on a fly rod. In full waders and cold weather gear, I slipped and was quickly carried by the current out into deep waters. As my waders filled with water, I frantically tried and failed to swim. I was able to make enough noise yelling for help to get the attention of my friends. Thankfully, with only seconds to spare, they were able to get me into a boat.

I only tell these two deeply private events as real-life examples to my colleagues that it can happen to any one of us. It behooves each of us to have financial plans in place, should a long-term disability or death occur. Are you financially prepared to be out of work for six months to a year if cancer invades your body? Will your practice survive? Will you be forced to tap into your retirement savings? If you were to be killed in a tragic accident, will your spouse and children be financially sound? Would your practice quickly dry up and be worth a fraction of its original value when you’re gone, leaving your family with big bills and little assets?

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It’s vital that we revisit these financial risks and how we can manage them every few years with our financial planners, insurance agents, accountants, and attorneys. While there are many possible issues to dive into, below are a few topics I’d suggest you discuss with them.

Life insurance

There are many options for life insurance policies, depending on an individual’s goals. “Term” policies provide coverage at a fixed rate of premiums for a limited period of time. Term-life policies are typically the least expensive way to purchase a large death benefit, but are less flexible and have no cash value to the policyholder. “Whole life” policies stay in place at a fixed rate for the insured’s lifetime as long as premiums are paid. Those premiums are generally higher than those for term-life policies, but have the added benefit in many cases of accruing cash value to the holder over time.

So, how much do you need? Ideally you need enough benefit to pay off all debts and mortgages and provide a stipend to the beneficiary. An often-quoted rule of thumb is to have a benefit equal to 10 times your yearly gross personal income.

Disability insurance

Be sure to look into both individual disability coverage and business overhead expense disability coverage. Business overhead expense coverage is often included in your general business coverage along with theft loss, fire, flood damage, etc. Ask your insurance agent to be sure that yours does. For individual disability coverage, the premiums vary greatly depending on the benefits. It’s vital that you understand benefits when comparing policy costs. How long must you be out of work until the initial payout? Are benefits terminated if you are able to work in another profession besides dentistry? How long are benefits paid?

Again, how much do you need? It’s expected that if you are disabled, you’ll have fewer monthly expenditures (not covered by health insurance). In general, most policies will cover 60%–70% of verified gross income. You can choose to purchase less coverage.

Will and testament

How do you want your property to be distributed after your death, and who is to manage that distribution? While very simple in theory, your will gets more complicated nearly every year as you add a spouse, children, grandchildren, and assets. Too often we have a will drawn up and then forget about it. In the meantime, we’ve added property, had another child, started another business, gone through a divorce, on and on. It’s wise to revisit your will with your attorney every four to five years or if you have any major lifestyle changes.

Mutual aid groups

This is a concept I hold dear. Twenty-five years ago, I purchased my practice from the estate of a dentist who passed away unexpectedly. The office was in a different state than where I was currently practicing, and I needed to obtain a state license before taking over. Fortunately for me, the local dentists had set up a mutual aid group to provide coverage for any local colleague who became disabled or died until such time that a new provider could take over. Ten dentists took turns keeping my office open for three months from the time the previous doctor passed on until I was able to obtain my license and start work. Had they not done so, I’d have been starting from near scratch.

I highly encourage you to speak to local dentists and set up a formal agreement to aid one another, should tragedy strike. It will be a tremendous help to the family whose business you help keep viable, and it will give you peace of mind should you be the one in need.

My recent wake-up calls had me checking with my business insurance agent, making minor changes to my will after meeting with my attorney, and reading up again on my disability policy coverage. My life insurance benefits are still at the appropriate level and paid up, but that will be changing in the next few years as I get closer to retirement and have less business debt. As I often tell patients, “Expect the best outcome, but prepare for the worst.” The worst could happen to any of us, so please do your loved ones the favor of being prepared.

Editor's note: This article appeared in the November 2021 print edition of Dental Economics.

Craig Harder, DDS, is a native of Spokane, Washington, and a 1995 graduate of Creighton University School of Dentistry. He practices in Moses Lake, Washington. Dr. Harder previously served as the Grant County Health Department’s dental liaison and the Access to Baby and Child Dentistry champion.