Dental Insurance Plans

Dental Allowance Versus Coinsurance/Maximum Benefit

Dental insurance can be a complicated subject, with a variety of options to choose from. Two common options that are often offered are dental allowances and coinsurance/maximum benefits. In this blog article, we will go over the differences between the two, and which one might be the best choice for you.

What is a dental allowance?
 

A dental allowance is a set amount of money that your dental insurance will pay towards your dental treatment. For example, your plan may offer a $1,000 annual dental allowance, which can be used for any dental procedure you need. You can choose to use this allowance on one big procedure or spread it out over multiple smaller procedures throughout the year.
 

What is coinsurance/maximum benefit?
 

Coinsurance and maximum benefit are two terms that are often used together. Coinsurance refers to the percentage of the cost of a dental procedure that you will need to pay out of pocket, while your insurance will cover the rest. For example, if your plan has a 20% coinsurance rate for fillings, and your filling costs $100, you will need to pay $20 out of pocket, while your insurance will cover the remaining $80.
 

Maximum benefit refers to the maximum amount of money that your insurance will pay out towards your dental treatment. For example, your plan may have a maximum benefit of $1,500 per year. Once you reach this maximum, you will need to pay for any additional dental treatment out of pocket.
 

What are the pros and cons of dental allowances and coinsurance/maximum benefit?

The main advantage of a dental allowance is that you have a set amount of money that you can use for any dental procedure you need. This gives you more flexibility in choosing the treatments that you want and can be especially beneficial if you need multiple procedures throughout the year.
 

The main advantage of coinsurance/maximum benefit is that it can be more cost-effective in the long run, especially if you only need a few dental procedures each year. With coinsurance, you will only need to pay a percentage of the cost of each procedure, which can be more affordable than paying the full cost out of pocket.
 

The main disadvantage of a dental allowance is that if you don't use the full amount, you won't get the remaining money back. For example, if you have a $1,000 allowance, and you only use $800, you won't get the remaining $200 back.
 

The main disadvantage of coinsurance/maximum benefit is that if you need a lot of dental treatment, you may end up reaching the maximum benefit quickly, and needing to pay for additional treatment out of pocket.

Which one should you choose?

The choice between dental allowance and coinsurance/maximum benefit depends on your individual needs and budget. If you need a lot of dental treatment, a dental allowance may be more beneficial, as it gives you more flexibility and coverage. However, if you only need a few dental procedures each year, coinsurance/maximum benefit may be more cost-effective in the long run.

It's important to carefully review your dental insurance plan and compare the different options before deciding. You can also speak with your dentist or insurance provider for more information and guidance on which option may be best for you.