Is Dental Insurance Worth the Money?
Purchasing dental insurance isn’t always a clear-cut decision. Sometimes it’s better to go uninsured.
Insurance is tricky. If you think about it, you know that companies don’t offer insurance unless they make money selling it. That said, not having insurance can possibly bankrupt you. One bad car accident or illness could easily result in tens of thousands of dollars in bills. So we buy insurance. I buy auto and health insurance because I don’t want to go bankrupt.
However, when it comes to other types of insurance, you should take a deep dive into the numbers to see whether or not you really need the coverage. Dental insurance is one of those types for which you should run the numbers to see if it’s worth the money.
How Most People Purchase Dental Insurance
Many people who have dental insurance purchase it through their employee benefits at work. Some employers offer such insurance to help attract and retain employees. Since dental insurance isn’t outrageously expensive, some companies will pay for it in full, while others will pay just a portion. If you will be partially responsible for the cost of this insurance, your payment will be deducted from your paycheck each pay period.
Not everyone has access to dental insurance as an employee benefit. As a result, people may buy dental insurance on their own. If you go this route, expect to pay more because the cost of the plan isn’t subsidized.
As a freelancer, I could purchase dental insurance through my wife’s employee benefits package or on the open market. Here’s how I made my decision as to whether or not I should buy dental insurance:
How Much Will Dental Insurance Cost Me?
The first thing I did was determine how much dental insurance would cost through my wife’s employer and how much it would cost on the open market.
My wife’s employer has an unusual dental insurance offering: Basic services such as routine cleanings, x-rays, and exams are free for her only. But if you want additional insurance to cover fillings and other dental work or to cover other family members, there is a fee for her, as well as one for the other family members. The additional dental insurance for her would cost $322 per year. If she wants to add me, there will be an additional cost of $368 per year. That brings the total cost to $690. Plus, there’s an annual maximum benefit of $2,000 per person.
Dental insurance purchased independently for just me would cost about $366 per year for reasonable coverage, based on quotes from the eHealth website. Unfortunately, the policy has an annual maximum benefit of $1,000 per person.
Is Dental Insurance Worth the Money?
After examining my options, I looked back at my previous dental costs. Last year, I went to the dentist twice — once for an annual exam, a cleaning, and x-rays, which cost $163, and a second time for another cleaning, which ran $77. My total dental costs for the year were $240.
For dental insurance to be worth the money for me, I would need to get a fair amount of work done.
Fortunately, I’ve had only two cavities in my life so far. At that rate, it would be cheaper to pay for one filling every decade rather than footing the bill for insurance.
I decided against purchasing dental insurance and am saving at least $120 a year. In a bad year, I might have to get a filling. In that case, I may spend more than I would on dental insurance. But over time, I believe that I’ll save money by not carrying dental insurance.
If I ever get to a point in my life where my dental health is suffering, I can simply buy a plan. Unfortunately, the annual maximum benefits on most plans could still have you paying a hefty out-of-pocket sum if you need a significant amount of work done.
Should You Get Dental Insurance?
While my current analysis says that I shouldn’t carry dental insurance, I didn’t always run the numbers. I’m ashamed to admit that I had a plan for three years at my last company and used the insurance just once. I probably paid hundreds of dollars of premiums for an at-most $200 service. People like the old me are the ones who help dental insurance companies make money. If you’re not going to go to the dentist that often, don’t bother buying the insurance.
Dental insurance can be a good thing. You just need to run the numbers to see if you’ll come out ahead more years than not. If you will, go ahead and purchase insurance. If you won’t, pay for dental expenses out-of-pocket and save the difference.