Dental Insurance vs. Dental Discount Plans: Which Is Better?

When it comes to managing dental costs, you have two main options beyond paying entirely out of pocket: dental insurance and dental discount plans. These are fundamentally different products that work in different ways, and choosing the wrong one can cost you money. Dental costs have been climbing steadily, with the Bureau of Labor Statistics reporting an increase in dental services prices in 2024, making it more important than ever to understand your options.

This article explains how each option works, compares the costs and benefits side by side, identifies warning signs of scams, and helps you decide which approach is better for your situation.

How Dental Insurance Works

Dental insurance is an actual insurance product where you pay a monthly premium and the plan pays a portion of your dental costs according to a set schedule. For a deeper overview, see our article on how dental insurance works. Here are the key components:

• Monthly premiums: You pay $20 to $60 per month for individual coverage. This is the cost of having the plan, regardless of whether you use any services.
• Annual deductible: Usually $50 to $100 per year. You pay this amount before the plan starts covering basic and major services. Preventive services typically have no deductible.
• Coverage tiers: Most plans use the 100-80-50 structure. Preventive services (cleanings, exams, X-rays) are covered at 100 percent. Basic services (fillings, simple extractions) at 80 percent. Major services (crowns, dentures, root canals) at 50 percent.
• Annual maximum: The most the plan will pay in a year, typically $1,000 to $2,000. After you reach this cap, you pay 100 percent of additional dental costs.
• Waiting periods: Many plans require you to wait 3 to 6 months for basic services and 6 to 12 months for major services before coverage begins.
• Provider network: DPPO plans have a network of dentists who accept negotiated rates. You can go out of network, but you pay more. DHMO plans require in-network dentists only.

How Dental Discount Plans Work

A dental discount plan, sometimes called a dental savings plan, is not insurance. It is a membership program that gives you access to reduced fees at participating dental providers. Here is how it works:

• Annual membership fee: You pay $80 to $200 per year for an individual membership, or some plans charge $7 to $20 per month. This is the only fixed cost.
• Negotiated discounts: Participating dentists agree to charge reduced rates for plan members. Discounts range from 15 to 60 percent off the dentist's standard fees, depending on the procedure.
• No claims or paperwork: You pay the discounted price directly to the dentist at the time of service. There are no claims to file, no reimbursements to wait for, and no paperwork.
• No annual maximum: There is no cap on how many services you can receive or how much you can save in a year. Every visit gets the discount.
• No waiting periods: Discounts are available as soon as your membership is active, usually within a few days of enrolling. You do not need to wait months before getting coverage for major procedures.
• No deductible: You start saving from your first visit. There is no minimum amount you need to spend before the discounts apply.

Side-by-Side Comparison

Here is how dental insurance and dental discount plans compare across the most important factors:

• Annual cost: Insurance costs $240 to $720 per year in premiums. Discount plans cost $80 to $200 per year in membership fees.
• Preventive care savings: Insurance covers preventive services at 100 percent (you pay $0). Discount plans offer 15 to 25 percent off preventive services (you pay the discounted rate).
• Major service savings: Insurance covers major services at 50 percent up to the annual maximum. Discount plans offer 30 to 60 percent off with no maximum.
• Waiting periods: Insurance: 6 to 12 months for major services. Discount plans: none.
• Annual maximum: Insurance: $1,000 to $2,000 cap on plan payments. Discount plans: no cap.
• Predictability: Insurance has fixed copays and defined coverage percentages. Discount plan savings vary by provider and procedure.
• Provider flexibility: Both use provider networks. Insurance DPPO plans allow out-of-network use at higher cost. Discount plans typically require in-network use to receive discounts.

When Dental Insurance Is the Better Choice

Dental insurance makes the most financial sense in certain situations. For recommended plans, see our guide to the best dental insurance for seniors.

• You mainly need preventive care: If your dental needs are primarily cleanings, exams, and X-rays, insurance covers these at 100 percent with no out-of-pocket cost. A discount plan would still require you to pay 75 to 85 percent of the cost yourself.
• You occasionally need fillings or basic work: Insurance covers basic services at 80 percent. If you get one or two fillings per year, the insurance benefit easily exceeds the premium cost.
• You want predictable costs: With insurance, you know exactly what percentage the plan pays for each category of service. Discount plan savings can vary from provider to provider.
• You have an employer plan at a low premium: Employer-subsidized dental insurance can cost as little as $10 to $20 per month, making it almost always worth the cost if you use any benefits at all.

When a Dental Discount Plan Is the Better Choice

Dental discount plans can offer better value in certain situations:

• You need major work right away: Discount plans have no waiting periods. If you need a crown, bridge, or dentures now, you can save immediately. With insurance, you might wait 6 to 12 months before major services are covered.
• You need extensive work that exceeds the annual maximum: If you need $5,000 or more in dental work, insurance with a $1,500 annual maximum leaves you paying most of the cost yourself. A discount plan with no maximum can save 30 to 60 percent on the entire amount.
• You want to keep costs low: At $80 to $200 per year, discount plans cost significantly less than insurance premiums of $240 to $720 per year. If you are on a tight budget and primarily need occasional care, the lower upfront cost is appealing.
• You are uninsurable or between plans: Discount plans have no medical underwriting or pre-existing condition exclusions. Anyone can enroll at any time, making them a flexible option during coverage gaps.

Red Flags and FTC Warnings About Dental Discount Plans

While legitimate dental discount plans can save you money, the industry has attracted some bad actors. In December 2024, the Federal Trade Commission sent warning letters to 21 companies marketing dental and health discount plans that the agency believed were making misleading claims. For more details on how to protect yourself, see our article on dental discount plan scams and FTC warnings.

Watch out for these red flags when evaluating a dental discount plan:

• Marketing the plan as insurance: Legitimate discount plans clearly state that they are not insurance. If a company calls its product insurance or implies insurance-like coverage, that is a red flag.
• Exaggerated savings claims: Be skeptical of plans promising 60 to 80 percent savings on every procedure. Actual discounts vary and are typically 15 to 60 percent depending on the service.
• Few participating providers in your area: Before enrolling, check the provider directory to confirm there are dentists near you who accept the plan. A great discount is worthless if there are no participating dentists within a reasonable distance.
• Hidden fees or long-term contracts: Read the fine print. Some plans charge activation fees, processing fees, or lock you into multi-year contracts with hefty cancellation penalties.
• No verifiable fee schedule: A legitimate discount plan should provide a fee schedule showing the discounted prices for common procedures. If the company will not share this information before you enroll, look elsewhere.

The FTC recommends checking with your state attorney general's office or state insurance department to verify that a discount plan is properly registered and operating legally in your state.

The Hybrid Approach: Using Both Together

Some people get the best of both worlds by combining dental insurance with a dental discount plan. Here is how this strategy works:

1. Use insurance for preventive and basic care: Your insurance covers cleanings, exams, fillings, and other routine services at 80 to 100 percent. These services eat into your annual maximum, but they are efficiently covered by insurance.
2. Use the discount plan for major work exceeding the annual maximum: If you need expensive procedures that push past your insurance annual maximum, use the discount plan for the remaining work. Since discount plans have no maximum and no waiting period, you can save 30 to 60 percent on the portion that insurance does not cover.
3. Do the math: Add up the cost of your insurance premiums plus the discount plan membership fee. Compare that to the total savings from both. If the combined annual cost is $400 to $900 and you save $1,500 or more on services, the hybrid approach pays for itself.

This approach works best for people who need both regular preventive care and occasional major dental work. It may not be cost-effective if your dental needs are minimal.

How to Choose: A Decision Framework

To decide which option is better for you, answer these questions:

1. What dental work do you need in the next 12 months? If you need major work soon, a discount plan's lack of waiting periods is a big advantage.
2. How much dental work do you typically need each year? If you mainly use preventive services, insurance gives you 100 percent coverage. If you need extensive major work, a discount plan may save more overall.
3. What is your budget for dental costs? Discount plans have lower annual costs but leave you paying a larger share of each bill. Insurance has higher annual costs but covers a greater percentage of services.
4. Is your dentist in the plan's network? Check provider directories for both insurance and discount plans before enrolling. Having your preferred dentist in the network is essential.

The Bottom Line

Dental insurance and dental discount plans are fundamentally different products. Insurance is an actual insurance plan with premiums, deductibles, coverage tiers, annual maximums, and waiting periods. Discount plans are membership programs with lower annual costs, no waiting periods, no maximums, but less predictable savings.

For most people who primarily need preventive care and occasional basic work, dental insurance provides better value because it covers those services at 80 to 100 percent. For people who need immediate major work or extensive procedures that exceed insurance annual maximums, a dental discount plan may save more money overall. A hybrid approach using both can be the most cost-effective strategy for people with diverse dental needs.

Whichever option you choose, be cautious of dental discount plan scams. Stick with well-known, established plans, verify the provider network in your area, and check with the FTC and your state insurance department if anything seems off.

Plans and coverage vary by location and provider. This article is for educational purposes and does not constitute individual advice. Compare specific plans available in your area to find the best fit for your dental needs and budget.