Key Areas to Make Sure You and Your Family Are Covered
Key Takeaways
- A reasonable baseline for a professional with a spouse and dependents is $2 million.
- Choosing the right amount of life insurance goes hand-in-hand with choosing the right type.
- Disability insurance is designed to replace income lost to an illness or injury.
One of the most common questions people ask when thinking about life insurance is simple on the surface, but complex in reality:
How much life insurance do I really need?
Buy too little, and your family could be left financially exposed. Buy too much, and you may be spending more than you need to for the same peace of mind.
While every situation is unique, Tara Cain from CWA Risk Solutions finds that $2 million in coverage is a good estimate for professionals and business owners like dentists.
Does $2 million sound too high? Tara unpacks this number and looks at other types of life insurance every dentist should understand to protect their family, practice, partners, and legacy.
WHY $2 MILLION IS A PRACTICAL RULE OF THUMB
“It might sound like a lot of money, but $2 million is really a good baseline for a professional with a spouse and dependents,” says Tara. “Life is expensive, and you want to give your family time to grieve, adapt, and plan without immediate financial pressure.”
For most earners, $2 million isn’t about extravagance. It’s about providing options and stability, including:
- 10–15 years of income replacement
- Helping to eliminate major debts like a mortgage
- Allowing flexibility for education costs and lifestyle preservation
- Creating breathing room so survivors don’t have to make rushed financial decisions
“That said, $2 million is not a universal answer,” adds Tara. “Younger dental practice owners or high-income earners may need significantly more.”
Choosing the right amount of life insurance goes hand-in-hand with choosing the right type.
TYPES OF PERSONAL LIFE INSURANCE FOR DENTISTS
Term Life Insurance
Term life insurance provides coverage for a specific period (typically 10, 20, or 30 years) and is often the most affordable way to reach a coverage target. It’s generally best for income replacement, young families, and debt protection.
Permanent Life Insurance
This is a broad category that includes Whole Life, Universal Life, Indexed Universal Life, and more. These policies generally combine longer or permanent coverage periods with some level of cash value growth potential.
There are many variations and riders that can be used to customize a life insurance policy. Tara typically recommends term insurance to help protect families, and in the right situations, she may also recommend permanent options like universal life insurance for clients who value both protection and the ability to build accessible cash value over time.
Regardless of the types of personal life policies you choose, Tara says working with a trusted financial advisor or CPA is key to mapping out a solution designed to meet your personal and professional goals—especially if you’re a dental practice owner.
INSURANCE FOR DENTAL PRACTICE OWNERS
Most dentists understand the need for personal life insurance to replace income. But for practice owners, the true exposure is often larger than expected. If the owner passes away unexpectedly, the business doesn’t instantly convert into cash. It still has commitments like payroll obligations, lease payments, and loans.
“Without the right life insurance coverage, surviving family members may be forced into rushed decisions,” says Tara. “That could include selling assets, taking on debt, or even exiting the practice at a discount.”
For practices with one or more owning doctors, Tara says buy-sell life insurance is essential.
Often structured as part of a buy-sell agreement, this type of coverage ensures that if one partner dies, the surviving partner or partners have the funds to buy out the deceased partner’s interest. This allows ownership to transition smoothly without disputes or financial strain. Coverage amounts will vary, but Tara recommends each owner have at a minimum enough business insurance to cover any remaining business debt in addition to their personal life insurance.
For solo practice owners, where buy-sell is not necessary, carrying enough life insurance to cover your practice debts is also recommended.
“A buy-sell agreement is still a standard insurance policy,” says Tara. “The key difference is that the partner, not the insured, controls the policy and is responsible for paying the premiums.”
In addition to owner and partner coverage, Tara says some practices benefit from key-person life insurance, especially if the practice employs a high-producing associate or a specialist critical to revenue.
“Key-person coverage helps offset revenue disruption and provides capital to stabilize the practice if a key contributor is lost,” adds Tara.
DISABLITY INCOME INSURANCE
Another type of coverage that dental practice owners often overlook is disability insurance.
“Dental practice owners are acutely aware of the importance of protecting their equipment, facilities, and staff,” says Tara. “Yet one of the most valuable assets in the practice often goes underinsured: the dentist themselves.”
A dentist’s hands, vision, and physical ability are directly tied to income. If an illness or injury prevents them from practicing, even temporarily, the financial impact can be significant. Disability insurance is designed to protect against that risk, covering up to 60% of income ($30,000 monthly max) should illness or injury arise.
“The great thing about our policies is that we can add a rider that allows someone to keep receiving benefits even if they return to work in a different capacity, like going from practicing dentist to professor,” adds Tara.
LIFE INSURANCE AS PART OF A LARGER STRATEGY
For dentists, business owners and professionals, life insurance is not just a safety net. When structured correctly, it supports business continuity, succession planning, estate planning, and provides long-term financial confidence.
“Life insurance is critically important, but it’s only a part of the overall financial picture,” says Tara. “What’s unique about CWA Risk Solutions is we have a team of financial planners in-house to make sure your protection folds into your financial plan.”
For more information on selecting the right life insurance for your needs, including commercial insurance for your business, contact Tara and her team at CWA Risk Solutions. For questions related to your business or personal financial goals, contact CWA today.
