American Dental Association (ADA) Life Insurance Review

Written on October 27, 2016 by Kaizen Retirement Wealth

American Dental Association (ADA) Life Insurance Review

I think most dentists will agree with me when I say, “membership with the American Dental Association (ADA) has many benefits beyond Life Insurance.”  As it turns out, I have been asked to review and compare life insurance for a American Dental Association Member, a General Practitioner Dentist.  

In this review, here is what I am going to cover:

  • The Term options that are available to you as members
  • Medical Requirements
  • The insurance company and ratings
  • Why you should compare your insurance options and how to do it

What will not be covered in this review:

  • ADA Term Plus® Universal Life
  • The value of your overall membership

This review is for educational purposes and should not be viewed as a promotion for or against any one company.  

Here’s is the deal:

If you are a dentist just starting out, you are best start with a low cost Term Life insurance plan to protect your income, your business, and your family.  Unlike most things involving insurance, Term insurance is easy to understand.  This is a credit to the American Dental Association.  It simply works as long as you have enough and provides confidence.

Enough Life Insurance + Death  =  LOVE

Warning for New Dentists!

Avoid, at least for now, any cash value policy that claims to do great things and helps you plan for retirement.  There is reason to look into these types of policies, but not until you have fully maxed out all of your retirement accounts, Health Savings Accounts, and paid your student loans.  Don’t get bamboozled or fall for Jedi mind tricks.

Now:

The American Dental Life Insurance has two options for Term Insurance, Annual Renewable Term Life and Level Term Life.  Level Term life is more commonly purchased but both are useful tools for members.  While you are best to look beyond these two plans, you are not lost by purchasing either one of these policies if you qualify for Preferred rates.  Otherwise, It just might cost you more in the long run.

The Bottom Line:

If you must or insist on purchasing coverage through the American Dental Association, you will likely find that you can save money buy purchasing the Annual renewable term policy over the 10 year level term.  If you need more than 10 years, 20 year term is guaranteed but not cheaper.

Annual Renewable Term Life

Just as the name indicates, this is a one year term policy that is guaranteed to renew every year.  It will renew at a higher cost than the previous year.  It is by definition a Group Policy offered by Great West Financial.  The industry acronym is ART.  Prior to 01/01/2015, These benefits were unisex but are gender based today.  

Coverage to age 81

Coverage increase every year with the American Dental Association ART.  Yet, this type of policy can be owned and provide coverage to age 81.  Certainly not a long term solution for life insurance or business continuity planning.

Reason to buy

If you are looking at the absolute lowest cost solution today, Annual Renewable Term is likely your solution.  The American Dental Association actually provides a very competitive price for their healthiest rates.  What we found, the level term was almost always more expensive than the cost for Annual renewable term.  While we ran various scenarios, please let us know if you come up with anything different.

Level Term Insurance

The American Dental Association (ADA) Member is offered two term periods.  These are a 10 year term and a 20 year term.  Unfortunately, there is no 30 year term policy.  

While you might save more money with Annual renewable term, you are giving up peace of mind after 10 years.  As indicated in the policy, you will likely need to re-qualify to keep the Preferred Status.  You may place yourself at risk of your rating increasing or being denied coverage altogether.  

If you have more than a 10 year need, you might want to consider the 20 year level term policy.  This will guarantee your premiums will be level regardless of health issues or insurability.  Again, peace of mind.

American Dental AssociationWhat Happens after the Term?

At the end of your level term period, you can choose to continue coverage using Annual Renewable Term Rates.  While they are renewable to age 81, it is not clear if you must redo the qualification process for the coverage.

The benefit is knowing that your coverage will not skyrocket after the specific term ends.  While this is a benefit, looking for insurance outside of membership can provide better long term solutions.  Most Term Life Insurance policies offer a convertibility to Annual Renewable term and several other options.  The type of conversion options are company specific and vary greatly.

Preferred Rates For Exceptionally Health Dentists

While this is a low cost option today you must qualify for the Preferred Rates.  Your coverage may be modified or declined if you do not meet their Preferred Rates Requirements which include:

  • Height, Weight, and personal and family health history.  If you have a family history of cancer, heart issues, or the like, you are be best seek guidance from an insurance agent familiar with navigating these issues.  There are companies that tolerates these types of issues.
  • Your lifestyle must be non-hazardous and travel outside of the US may be frowned upon.
  • If you qualify for Preferred Rates, you may be required to re-qualify after 10 years.  
  • The Annual Renewable Term policy is not guaranteed renewable, specifically after 10 years.

Minimum Medical Requirements for most policies require a Medical Exam and APS.  Some policies require a EKG after age 36.  You can expect a fully underwritten medical exam to include a medical questionnaire, Blood Draw, urinalysis, paramedical exam, Physicians report also known as an APS (Attending Physician’s Statement).  You are best to fast 8 to 12 hours prior to the exam.

What if I do not qualify for Preferred Rates

If you are not “exceptionally healthy” or have a family history of Cancer, you are likely to be given a modified offer for insurance at a standard or substandard rating.  You may be denied coverage altogether.

Adventure Seekers need not apply!

This holds true if you if you are adventurous and do not have a low risk lifestyle.  If you enjoy fun activities like rock climbing, mountain biking, sky diving, scuba diving, travel to foreign countries… Basically if you are not boring… you might not get Preferred Rates.  

Don’t go it alone

We are here to help.  If you are not 100% sure that you are “exceptionally healthy” and have the best family history, you are best to wait till you seek guidance.  If you get denied insurance, this will remain on your record indefinitely and cause you bigger challenges for other types of insurance like Disability Insurance.

Other Benefits with American Dental Association

The ADA Annually Renewable Term Life Insurance plan also offers Waiver of Premium, Accidental Death benefit, and a Child Rider.  We did not compare them in this review to allow us to keep the information easy to understand and compare accurately.

Preferred rates are for a minimum of 10 years.  After 10 years, Great-West Financial may ask you to qualify for another 10 years.  If you choose not to re-qualify, your rate my drop down to substandard rate classes.

You can also add a Child Rider of $10,000 for just $5.81.  This is not the lowest cost Child Rider on the market, but it is a benefit.

A terminal Illness Rider was not promoted as a benefit.  Most companies offer a Free Terminal illness Benefit.  While it would not surprise me if it was part of the policy.  

Financial Ratings With Great West Financial

Great-West Financial has a fantastic history and Superior rating with A.M. Best.  They are equally strong with S&P, Fitch and Moody’s investor service.  At the end of the day, you can expect them to be around and in good financial condition.

Comparing your Options

As a dentist you do not have a lot of time to review and find the best coverage available to you.  Like most busy professionals you want a solution that you can feel good about.  While Insurance through your American Dental Association membership is a quick solution, you are best to seek guidance from a life insurance agent that can quickly guide you through the pitfalls of the industry.  

If you are looking for the best coverage, you are likely to find it outside of any one company.  It may take a few insurance companies to best tailor your solution.  

Writing Disclosure

If there is something odd or really off base in this post, please call me out on it.  Our Family is currently adjusting to our new normal.  While the Life insurance industry goes through digital disruption, our family is going through newborn twin disruption.

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Do you wonder what is the best life insurance solution for you or your loved ones? We are here to help and easy to contact.  Start Here on our first post if you are wanting to research best life insurance options for children or jump to our most popular post on life insurance for new parents.

Send us a message

Feel welcome to reach out and ask us about solutions for Life Insurance for couples. We do our best to respond to questions via email within 24 hours, and while I can’t guarantee we’ll be able to help everyone, we do our best to at least get you the answers you need so you don’t make a long-term commitment to a complicated financial product you might later regret. Simply reach out to us or leave us a comment at http://lifeinsurancetoolkit.com/contact/

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When you need to ask specific questions or need some one-on-one guidance (for free and with no pressure, of course), feel welcome to reach out by clicking here and accessing our calendar.  We’d love to hear from you.

Happy planning!

Jose, Hoser, Joe from the Show

About Kaizen Retirement Wealth
About Kaizen Retirement Wealth

We work with individuals across the nation to secure the best life insurance rates.

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