Is individual dental insurance a better value than a dental discount plan?
Is personal or family dental insurance a better value than a dental discount plan?
Dental insurance contracts are often a good value when acquired through group insurance contracts but not so on individual stand alone dental plans. For this reason, the long waiting periods often found on individual dental plans and the high cost of standalone dental insurance, discount dental plans are often more advantageous for those who cannot acquire their dental insurance through an employer.
There is a big difference between standalone dental insurance plans and dental insurance that is bought as a package with an individual health insurance policy. Insurance companies usually have better loss ratios when dental insurance is packaged with individual or personal health care insurance policies. This fact often makes this an affordable way to make dental care affordable.
Getting a group discount is not the only thing that makes employer-sponsored dental insurance a better deal than standalone individual or personal dental insurance. Usually people think that the buying power is the big reason for the difference in cost, the main reason is based on something called adverse selection. When an insurance company insures a large group of people at one company they tend to get a their fair share of of insured people who will never use the policy at all. When policies are sold to individuals, they will disproportionately get policyholders who will use the insurance in a significant way.
Since so many people fail to shop around, the insurance companies continue to offer these plans even though they are usually over-priced and offer little value. Consumers are getting more sophisticated. We are doing a lot or research online and may stop buying these plans at some point in the future.
Another reason that individual dental insurance plans usually are a bad value when stacked up against discount dental plans is that there is quite frequently a lengthy wait before you may use your policy fully. You may need to wait two or three years before something expensive like a root canal is covered with an individual or personal dental insurance policy.
Even worse than the elimination period itself is the policyholders’ lack of knowledge of the waiting period. Since this information is hidden in the fine print, many consumers are unaware of the elimination period until they submit a claim.
Quite frequently a dental discount plan will offer its discounts right away or nearly right away so. You may need to wait until the beginning of the following month, but no more. This offers you a big advantage over most standalone individual dental insurance contracts.
Although dental insurance may offer more benefits than a discount dental plan, you will probably overpay for those additional benefits if you purchase an standalone policy. A dental discount plan is very inexpensive. The yearly cost is often equal to two monthly premiums for a dental insurance policy.
It pays to shop around and be aware of all your alternatives when it comes to dental insurance and dental discount plans. Although group dental and dental insurance bought as a rider on a health care insurance policy can be a good value, discount dental plans will have major advantages over individually bought standalone dental insurance.
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