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 on life insurance, we provided an overall summary of life insurance and why it is an important part of any financial plan. 

 covered the basic types of life insurance. 

 outlined the kinds of policies that might be right for you, and some key considerations for arriving at that decision.

Now, let’s wrap it up with a summary, some precautions, and a few best practices that can help you find the right policy for you.

We write often on this site about the value of working with a professional, but we also point out many financial matters that can be ably handled without help. For most, life insurance is one of those areas of financial planning that should be probably be handled alongside a professional who specializes in these products. Why? Three key reasons:

Any life insurance is better than none, but the right life insurance for you is truly essential. Unlike other aspects of financial planning, by the time you really need the life insurance policy, it is, indeed, too late for a do-over.

While we’ve made this 4-part series as simple as possible, the simple truth is that the variety and complexity of some life insurance plans can make choosing on your own a difficult proposition. A close friend of mine, who has sold life insurance for more than two decades, explains the difficulty of the sales process this way: “I’ll go over the different types of policies, and then we’ll work together to choose the one that best fits the customer. But, often, the person will think the policy he or she ultimately chose had all the features we discussed, as opposed to the trade-offs that are part of any investment or insurance vehicle.”

Permanent life insurance vehicles that serve as an investment offer growth opportunities, but those opportunities come with a cost: the possibility of losing value. This is, of course, true of most types of investments vehicles. So why does it often come as a surprise to policyholders? Because many don’t think of life insurance as an investment the same way they see buying stocks or setting up an individual retirement account. Term life insurance is flat protection, for a flat (although not necessarily fixed) fee. But permanent life doubles as a savings and investment vehicle. And many annuities, which we covered separately 

 Complexity, an over-abundance of choice, and the consideration of working with an outside advisor combine for a dangerous mix that lead many to prioritize other needs over obtaining life insurance. Yet, even those three factors aren’t the top reason people put it off. That reason is cost. A 2015 

 found that 80% of consumers misjudge the price for term life insurance—often guessing that it will cost them two to three times more than it would actually cost. Other studies have shown that even dentists, with practice succession plans a needed part of the mix, often forego life insurance.

Many top insurers have easy-to-use life insurance calculators that can help you determine your level of coverage and how much that coverage would likely cost. A life insurance professional can help you better understand the costs for the kind of protection you want. Look for a professional you trust, interview as many as it takes to find that person, and get started.

Life insurance isn’t easy, and while it may not cost as much as you fear, it isn’t always cheap. Should something that offers protection for your family and establishes your legacy be cheap and easy?

We wrap up our series on life insurance with a summary, some precautions, and a few best practices that can help you find the right policy for you.

No One Ever Said Life (Insurance) Was Easy

Building wealth is important, and saving for retirement should always be top of mind when developing a saving and investing plan. But many people—dentists included—don’t pay enough attention to a step that should take place before you even begin an investing strategy: making sure you are insured against life’s curveballs.

Estimates show that 1 in 10 dentists is likely to face some sort of liability claim over the course of their career. Finding the right insurer and the right policy for you isn’t always easy. Make sure that dental malpractice is a core component of the insurer’s offerings, and not a side business the company got into because they thought there might be a great deal of intellectual overlap. While there is some overlap in malpractice law, there’s enough differentiation that you’ll feel more comfortable with a firm that knows our specific profession

No one expects to face poor health or a medical disability, but to twist a famous line from 

 into a double negative, we can’t all NOT face poor health and a medical disability. The health insurance you provide for you and your practice’s employees may cover disability for certain conditions, but not for others, and it won’t cover anything at all once you’ve sold your practice and proceeded to retirement. A health savings account, long-term care insurance, and additional disability insurance can provide monthly income in the event that you fall unexpectedly ill or are unable to work due to a sickness or injury. Look carefully at the plan information to make sure you know what is considered a disability and if there are limitations on the income you can expect.

Good home and auto insurance is essential (and, in many cases, required by law). But so is business insurance. Your policy should cover your practice against not just theft, vandalism, other possible damage, but also general liability coverage. If one of your employees is in a car accident while on a business errand, you are potentially responsible for medical bills and litigation that may result. If during periods of vacation you have another dentist to help fill in, be sure your insurance carrier is notified, so that a provision extends the benefits of your policy to the replacement dentist for a temporary period of time. Look into the workers’ compensation insurance carried by any independent contractors you employ.

This is a much bigger topic, and one that we’ll cover in depth in several upcoming features. The reasons to get life insurance are pretty clear, and most people recognize that it’s an essential piece of the financial puzzle. But there are many different kinds of life insurance and many types of policies. Many of them, including annuities, have a direct connection to your retirement savings as well. We’ll cover the two basic types of insurance—term and permanent—in an upcoming multi-part article.

As your life and business change, review your policies to make sure your insurance needs have changed as well. This may include staffing changes, personal life changes, and financial changes, among others. 

Building wealth is important, and saving for retirement should always be top of mind when developing a saving and investing plan. But many people-dentists included-don't pay enough attention to a step that should take place before you even begin an investing strategy: making sure you are insured against life's curveballs.

Insure Before You Invest

Running your own dental practice brings undeniable rewards, an often-joyous sense of autonomy, and the sometimes-needed boost that can come from calling all the shots yourself. But it can bring stress, too. Many dentists in solo practices find that scheduling vacations is difficult, and taking a sick day, while often a better option than potentially spreading infection, can lead to disrupted and unhappy patients.

Chances are, you have at some point considered adding a partner or several partners to your practice. Or, you have considered buying into a practice with already established dentists. Here are some things to consider before making such a monumental decision.

Being in a partnership means letting go of the reins and sharing in key decisions for your practice. It may mean an adjustment in your schedule, your patient load, your physical location, your office staff, and even, ultimately, the services you offer. A partnership by definition means that key decisions will no longer be made by you alone. That thought may be a relief to some, while it may seem daunting for others. 

Finding potential partners of like mind and like business goals, and then thoroughly vetting those potential partners, is an obvious crucial step in this process, but it isn’t the first step. The first step should be a period of thorough self-reflection. Are your reasons for considering a partnership the right reasons? Are they realistic? Are they sustainable? Before reaching out to anyone about the possibility of partnership, reach in and make sure you’re ready to make a commitment that will mean less autonomy for you. 

If you’re considering buying into a practice, look into every nook and cranny of the financial documents of the practice. Consider local economic factors and trends, patient demographics and possibilities for growth, competition in the area, the personnel history of the practice, and any liens on the practice and its principals. Consider speaking with a consultant, accountant, or tax advisor about the implications of buying in and key questions that must be answered.

But, mirroring the sentiment above, are the established dentists in the practice ready to add you? Do a deep dive into the reasons for adding another dentist to the practice, and make sure what they’re looking for lines up with your strengths and interests. Many people forget when conducting interviews that it’s a two-way process. You’re not just selling yourself and your skills. You’re also making sure you ultimately want to make the commitment to them. 

Once the relationship parameters are sorted out and the negotiating phase begins, secure an attorney, an accountant, or both for outside help in determining how the buy-in should be structured, what the decision-making structure will be going forward, who is responsible for paying creditors in the unfortunate event of practice insolvency, options for dissolving the agreement if necessary, and the dozens of additional legal and logistical considerations. 

Both taking on a partner or joining an existing partnership involve many important decisions that should not be taken lightly—and probably shouldn’t be taken on at all without some form of legal representation.   

Howdy, Partner?

If you’re in the early phases of your career as a dentist, chances are you probably have some lingering student loans. Data from the American Dental Education Association paints a sobering picture of debt: 4 out of every 5 dental school graduates in the class of 2014 had student debt of more than $100,000. Average debt for all indebted dental school graduates in the Class of 2014 was $247,227. And more than 30% of indebted dental school graduates in the Class of 2014 reported debt in excess of $300,000.

If you’re among the recent graduates with substantial debt, it may be a significant impediment to future planning—including saving for your retirement years. How can you even think about planning for your nest egg when your career has just begun, and you have a ton of loans to repay? Let’s take a look at some strategies that may help you pay that debt down more quickly.

Depending on where you start your career, you are probably looking at a starting dental salary around $125,000. You may have a mortgage obligation, car payments, and many other demands on that salary. But paying off your loans sooner rather than later will pay big dividends down the road. Consider putting off other big purchases, such as a home, until you’ve made substantial progress on paying back your loan, or until your salary begins to escalate.

 Once you’ve established and are making those high early payments, ramp it up even more by adding at least two more payments per year. This helps in two ways: you’ll make 26 payments a year instead of 24, and you’ll pay less interest over the course of your loan. This may not sound like much, but depending on the terms of your student loan, it can add up to tens of thousands of dollars in savings.

 Same principle: getting to the principal faster. Again, even tightening the belt a little bit on current spending to save over the long-term, say, in an extra increment of $50 or $100 each payment, can pay off in big savings.

Keep good track of all your debt…and your interest rates.

 If you have multiple loans from multiple sources with different interest rates, keep good records and make sure your extra payments are going to the highest interest rate loan first. While paying off student loans early can be a great idea, it doesn’t make any sense if you’re doing it by paying the minimum payments on a credit card or other higher-interest loans. Always know what your rates are and prioritize your payments to tackle the ones with the highest rates first.

Keep a solid budget, and make adjustments as necessary.

 The budget is a great all-purpose tool. Knowing where your money goes each month can help you determine whether you can make those extra payments or pay extra amounts each month.

Is there anything cooler than found money? We’re not just talking about that random, freshly-laundered sawbuck you unexpectedly discovered in your jeans pocket. Any unexpected income can be found money, such as a bonus, a side job with Uber, or even an unexpected tax refund. As always, little amounts over time can add up, so putting aside that “found money,” or using it to add to your loan payments, can make small amounts much larger.

Even if you can’t pay off your loans early, make sure you stay current. Missing payments is bad on three levels. First, it can negatively impact your credit, which can ultimately lead to higher interest rates. Second, it has the opposite effect of paying off your loans early; it will make the long-term cost of your loan higher. Third, paying even a couple of days late can lead to late fees and other penalties.

An albatross is a big bird. Shed it a little bit at a time. Sometimes, just knowing you’re making progress can make the long road seem shorter.

If you're in the early phases of your career as a dentist, chances are you probably have some lingering student loans. So what's the best way to pare down a pile of debt? 

Tackling the Albatross of Dental Student Loans

, we provided an overall summary of life insurance and why it is an important part of any financial plan. 

 covered the basic types of life insurance. Now, it’s time to help you figure out what kind of policy might be right for you.

Most of the questions that will factor into your choice of life insurance will be pretty obvious to most:

Family situation, including your partner’s income and health, number of children, etc. 

You were with me until that last bullet, right? What is “saving and investing strategy” doing in that list? Bear with me, and it will start to make sense.

Looking back at the types of life insurance we covered in part 1, you can draw some general conclusions about how the bullet points in the section above can point to a type of insurance that is right for you. One important note, however: because there are so many variables to consider, these generalities won’t work for everyone. For example, the structure of term life might suggest that it isn’t ideal for those nearing middle age. But if your priority as a policyholder is some coverage but at the absolute lowest cost possible, then term might be right for you. This is another reason you should consult a trusted expert to help you sort through all of the options available to you.

With that caveat in mind, generally, speaking, you might consider 

 if you’re looking for protection during a specific time period (usually between five and 30 years) at a reasonable price. Death benefits are paid only if death occurs during the period covered by the policy, and coverage ceases when premiums are not paid. Some term policies are renewable, which means you can extend coverage without going through another medical exam, though your premiums are likely to increase as you age. Some are also convertible into universal life policies.

 if you want protection for as long as you live. The death benefit is guaranteed, and the cash value of the policy can grow—tax deferred. Premiums are designed to be level and generally do not increase as you age. Permanent life insurance is flexible and adaptable. It helps you keep more of your money by minimizing your taxes but with no contribution limits, no early withdrawal penalties, and no income taxes on any money you pass along. It also has cash value that can 

Much of the complexity that surrounds life insurance has to do with the variations among permanent life insurance plans. That’s because permanent policies come in many forms to appeal to many different kinds of investors—including those who would like to have some growth potential alongside their family protection. By design, permanent policies are not just a death benefit, so they have varying degrees of risk and potential reward. 

Don’t let the variety of the types of plans keep you from pursuing life insurance. Find a professional at a company you trust, and then work through your options. You may find after you’ve waded into the waters and grown accustomed to them that securing protection for your family was easier than you envisioned.

In Part 4, we’ll look at how to strike the balance between an affordable policy and the right level of protection for you. 

In Part 3 of our series on life insurance, we look at how to choose from the various options.

What Life Insurance Policy is Right for You?

Thinking about retirement can bring a high level of uncertainty for anyone, but dentists face particular challenges and issues that can make this a time filled with anxiety. You’ll be thinking about a host of questions. Some are relatively mundane, such as, “How much golf or bingo can I actually play without going out of my mind?” Others are much more substantial: “Will I be in good health when I retire?” “Will I be able to sell my practice for a good price to a good person—someone I’ll feel good about recommending to my current patients?”

No question is bigger than this one: Will your retirement income last and allow you to live in something approximating your current lifestyle? As people are living longer, this is an increasingly important question, and the answer can be difficult to predict, because estimating what your daily, weekly, and annual costs will be takes some legwork and can be unpredictable. Here are some things to consider.

If you own part or all of your dental practice, hopefully you haven’t eschewed saving for retirement, assuming that your practice will be worth enough to carry you through your retirement years. If you are doing that…stop. Make sure you have a more viable saving and investment strategy. Yes, you may have a very profitable practice that will bring a large sum on the market. But many factors will be at play when the time comes for that sale, including the supply of dentists in your area, the success of those practices, local demographic changes such as the departure of a previously big employer or industry in the area, overall property values, local property and business taxes, and many more. Many if not all of these factors are beyond your immediate control.

So what can you do? First and foremost, have some savings and investment alternatives that won’t change in value if your practice does. Next, keep a close eye on the local news, the overall financial health of your state and municipality, economic or political climate changes that may change the value of your practice or your asking price, and the overall market for practices and other similar businesses in your area.

If your practice appreciates in value over time, fantastic. That will translate into a bigger nest egg when the time comes to sell. But if values are going in the wrong direction, you’ll have an opportunity to increase your other savings and investments. Even if the general trend in value is going up, don’t necessarily assume it will continue in that direction. The economy is cyclical, and movement in the markets can have significant downstream impacts on property values and the selling prices of business enterprises. Don’t panic; just be prepared, and always have a Plan B.

Expenses like food, housing, taxes, utilities, insurance, and transportation won’t go anywhere when you retire. In some cases, these basic expenses might go down, such as auto maintenance you won’t need as regularly if you aren’t making that hour-a-day commute back and forth to the office. But other expenses might go up. With more free time on your hands, you may pursue expensive hobbies or eat out more often. Consider how you envision your retirement lifestyle changing when you estimate your basic expenses, and plan accordingly. Don’t forget to consider changes that may impact your lifestyle, such as the arrival of grandchildren.

With more free time on your hands, you may get the sudden urge to take that African safari or that Caribbean cruise. Maybe the tennis membership you’ve always avoided because you were never free to play suddenly becomes more attractive. If you’re finally going to start that lucrative antiquing side business you’ve always dreamed of, that could become costly as well. Talk through with your spouse and kids what your expectations (and theirs) are for your retirement.

Healthcare should be considered in this category as well, particularly as you get later in retirement. Your expenses may shift from travel and hobbies early on, to more healthcare expenses later. Health savings accounts and other savings vehicles can help you prepare for this shift. Talk to a trusted financial advisor as you near retirement, and join a community of other retired persons to learn what challenges they faced and how to overcome them.

Figuring out how much income you will need in retirement may give you peace of mind, but it could do the opposite also—creating stress as you realize that you may need more than you think. Better to open that closet now and address it as soon as you can. Your future self is depending on you.

Thinking about retirement can bring a high level of uncertainty for anyone, but dentists face particular challenges and issues that can make this a time filled with anxiety.

Three Considerations for Dentists Approaching Retirement

If two industry experts get their way, the 401(k) plan would go the way of the dodo bird. In its place would be a plan that requires all workers and their employers to contribute at least 3% of the employees’ salary each year toward an account that would be converted into an annuity when the time for retirement comes.

, is worth read, both for its historical perspective on how the 401(k) became an “accidental” phenomenon and why it should be tossed aside. The researchers—one a labor economist and noted retirement policy expert, the other the Chief Operating Officer of the prominent private equity firm Blackstone Group—make a compelling case that, “If nothing changes, by 2050, 25 million American retirees will be either in poverty or very close to it.”

The researchers don’t stop at decrying the current system—which serves as the default for many investors. Instead, they propose the daring new plan to develop a national retirement system called the Retirement Savings Plan (RSP). Under the RSP, both full- and part-time workers would have fully portable, individual savings account made up half of individual contributions and half of employer matches. Accumulated savings would become available at retirement and would combine with Social Security to create a lifelong income stream. Social Security even has a role in distributing the benefits at retirement, which, according to the researchers, would streamline the effort because it uses existing infrastructure.

The RSP idea comes on the heels of state legislated efforts in Illinois, Connecticut, and California, among others, and national calls for retirement plan reform. Perhaps best of all, the plan would be virtually cost-neutral for low-income workers, who would receive a federal tax credit for contributing to the plan. For employers, the mandatory 1.5% contribution would be offset, to a large degree, by the decreased administrative costs associated with securing and maintaining retirement plan providers for their employees.

Mandated employee contributions would be offset by a “revenue-neutral federal tax credit” of $600 for every worker, “making it virtually costless” for lower-income families to contribute, the proposal says. The credits would be funded by phasing out the ability of individuals to defer taxes on their 401(k) contributions. The contribution cost for most employers would be offset by their no longer having to administer or contribute to other retirement plans.

“All that is missing—at least for now—is political will to solve this crisis while we still can,” the authors note. “Will we act now, while there is still time to solve this problem? Or will we wait for the next wave of chilling statistics that are surely up ahead? If we act now, we have time to build up savings gradually and the cost will be modest. If we wait, there will be a crisis down the road and the cost will be huge.”

For many workers, the 401(k) has become the default retirement plan (if they have any at all). Now, a new proposal is calling for the replacement of the 401(k) with a new national retirement system. Here are the details.

Go Away, 401(k)?

If you’re reading this site, chances are you’re a practicing dentist. You probably made the decision in dental school whether to become a general dentist or specialize in something like endodontics, periodontics, or radiology. But if you are a dental student, or if you really, really like school and are thinking of specializing, there are some factors you should consider.

Pursuing a specialty while you are a full-time dentist can be completely overwhelming, which is why many who chose not to specialize stick with that decision. Most education and training for those extra initials will take two to four years full-time, longer if you’re pursuing part-time certification and training, depending on the specialty chosen. If you’re early in your career, trying to build your practice, perhaps starting a family, that’s a lot on your plate. It can and has been done, and if you are really motivated to pursue a specialty, nothing should stop that pursuit. Just make sure you factor in all the demands on your time before you decide to seek additional training.

What are your interests and career goals?

Only you can know what’s most important to you, whether it’s establishing a long-term relationship with patients and their families, earning as much as you can as fast as you can, or any other career goal. If being a part of your local social fabric is most important to you, general dentistry is probably for you. If maximizing your earnings is most important, you may want to consider pursuing a specialty.

Although more recent statistics are hard to come by, the May 2011 Bureau of Labor Statistics shows that general dentists averaged $161,750 annually, although the highest salary topped out over $235,000 per year. Prosthodontists earned slightly less, on average, and orthodontists earned more, at $204,000 per year on average. Oral and maxillofacial surgeons reported the highest average annual salary, in the neighborhood of $217,000 per year.

Income isn’t everything, of course. I spend some time perusing dental discussion boards, and one of the more common laments I often hear from specialists is that they are now performing the same procedures, over and over again, with little variety. They also sometimes miss the long-term relationships with patients that many dentists find so rewarding. For others, however, focusing on an aspect of dentistry that the really love has made their careers significantly more rewarding.

If you’re thinking of pursuing a specialty but aren’t sure, join some discussion groups or reach out through your social networks to try and get a better sense of what life is like on the other side of the fence.

Like any other healthcare profession, the field of dentistry is always changing. New techniques, advanced consumer products, and other factors are changing—and will always change—the dental services patients actually need. You understand this in the context of general dentistry; fewer children with cavities than a generation ago, for example. But there are other changes affecting specialty dentists, too, such as teeth whitening and straightening products that actually work quite well and may ultimately significantly reduce demand for certain dental services.

Before pursuing additional training, make sure you understand current trends in dentistry and can project some future trends, as they may have a big impact on whether, and where, you choose to specialize.

If you're in dental school you face a question: Do I become a general dentist, or specialize? Here's a look at some key factors you should consider.

To Specialize or Not to Specialize?

, you probably know enough about diversification to be dangerous. It might be, though, that you know just enough to be dangerous to your own portfolio.

managing risk by using a wide variety of investments within a portfolio, thereby minimizing the risk of a shortfall in any given investment on your overall investment portfolio.

 It isn’t done to grow your investment, and it won’t guarantee against losses. But it will provide a layer of safety to your portfolio.

Where investors can get themselves into trouble is misunderstanding what is meant by “a wide variety of investments.” Put simply, many think they’re diversified simply by having different kinds of stocks or bonds, such as a growth stock, a blue-chip stock, and a “sin” stock, such as tobacco. That is one form of diversification, but it may not be enough for most portfolios.

• By type of instrument: for example, an equity investment or a debt investment

• By industry: healthcare, technology, durable goods, and real estate, among many others

• By companies within an industry: If, a decade ago, you had holdings in both Blockbuster and then-emerging Netflix, half of that investment has made it through pretty well!

• For bonds, by length of maturity and possibly by geography (Municipal bonds offer geographic diversification, but corporate bonds do not.)

A truly diverse portfolio doesn’t have to have 

 these types of diversification, but it should include a few of them. Why? Because some investments, over time, have shown that they typically move opposite of each other, no matter the direction of the 

. So if one portion of your investments is susceptible to a distribution phase, another might perform better during that phase. With an 

 now official, a diversified portfolio means that if some of your investments take a small hit, others may fare better.

For many, the dream scenario is to establish a practice partnership and sell the practice as you ride off into the retirement sunset, or to get in on the ground floor of a Google, an Apple, or a Mercedes Benz, ride that stock through splits and market cycles, and sell a big chunk of it as you sail off to your favorite fishing destination. If you can pull off one of those scenarios, more power to you! Diversification will not help you much in that scenario, and it could potentially limit the growth of your investment by putting some of those investment dollars into lower-performing vehicles. 

But that scenario isn’t realistic for many. Diversification also allows you to be more aggressive with some investments, knowing that if the market takes a tumble, or if the Silicon Valley-based growth stock you’ve latched onto tumbles into the Pacific Ocean during an earthquake, your portfolio won’t completely crumble along with it.

One last word on diversification: like many aspects of investing, it isn’t a one-time deal. As your financial circumstances and goals change, so should your portfolio mix. Look at your investments at least annually to make sure the risk level you’re at is the one you want.

Diversification is important to the long-term stability of any portfolio, but true diversification isn't uni-dimensional.