Restoration Programs
Disability insurance that includes
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bonus
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commissions
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owner distributions
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equity
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and base pay
When is 60% not 60%?
Because group LTD usually excludes non-base compensation and there is an absolute cap on the monthly benefit, leadership and sales personnel often get 25% instead of 60% incrome replacement.
Restore Parity of Income Replacement Ratios
To get income replacement ratios to the benchmark level (60%), individual disability insurance is used to supplement group LTD or exist on a standalone basis.
There is no need to cover everyone.
Coverage While Benched
A year is not an unusually long time to be out of work for executives. It takes executives longer, on average, because of job scarcity at that level and that they often have non-compete clauses in their severance agreements, preventing them from working for competitors and sometimes in the industry. During this time, they may lay low while they prepare their next opportunity. The problem is, they may have no income protection during this time and they can't get it now that they are not working.
Executive Disability Insurance solves this problem by setting the Executive up with an Individual Non-Cancellable policy in advance of termination. Once such a policy is in place, that coverage remains valid and continues to protect the individual throughout their employment and afterwards, even while not actively at work.
No Pre-Existing Condition Limitations
After an extensive courtship process, employees assume the employer has taken care of disability coverage. But with group LTD, claims related to a Pre-Existing Condition within the first year of hire are generally not covered. This leaves a gap when hiring from outside.
Executive Long-Term Disability Insurance programs can be designed without Pre-Existing Condition Limitations so that on-boarding executives are covered without the wait.
Provide
Security
of coverage after termination and management transitions
Cover Senior Leadership During Transition Periods
It is fairly common for senior management to transition out of their roles by working part time or becoming independent contractors while they train their replacements. They may be the only ones who know the ropes. But LTD does not cover part time employees or independent contractors, leaving a coverage gap. Executive Long-Term Disability insurance plans solve this problem and are well suited for senior management as they move into consulting roles