Layering disability insurance is a very effective strategy to protect against income loss in the event of a disabling injury or sickness especially for high earning individuals and physicians and dentists.

Executives earning top salaries and bonuses may come up short with long-term disability (LTD) at work. In fact, group long term disability plans actually are often worse for executives than the average worker.

Consider an executive making $300,000 per year.

Is a group LTD plan providing 60% of income up to $10,000 per month going to allow enough protection to maintain that person’s lifestyle or the lifestyles and financial needs of their spouse and children?  Families with a high-net worth require more insurance than most, as their average expense ratio is significantly higher than an average household.

The usual group LTD policy caps of $7,500 to $20,000 per month hardly allow for enough protection for higher income earners, which is where we regularly witness the discrimination.

Consider these strategies for protecting high earning clients’ paychecks:

Individual Disability Insurance
One option is a layer of individual, fully underwritten disability insurance on top of group LTD. The available benefits and riders are robust and long-term in nature, but again, we find excessive limitations when considering high-net-worth clientele. Those making in excess of $300,000 annually will still find it difficult to reach that 65 percent income replacement figure when dealing with only one or two traditional layers of disability insurance.

High Limit Disability Coverage
Another tool in replacing your clients’ income is high-limit or excess disability coverage. The third tier of income indemnification can be found in the secondary or Surplus Lines market which harbors specialty carriers like Lloyd’s of London and their marketplace of high-limit DI experts where extraordinary earnings can be appropriately insured to levels of at least 65 percent of income replacement.

Guarantee Standard Issue

Another strategy of layering multiple policies for higher levels of disability benefits can be found among the recently expanded guaranteed-issue or GSI market offerings. GSI coverage is being touted by both domestic and specialty-market carriers, commonly replacing IDI and high-limit excess layers. The GSI product lines are very attractive to consumers, employers, human resource managers as well as insurance professionals.

If your client has an employee group with five people or more people, a GSI Disability Insurance plan is an ideal disability insurance quote option. Forget about long, extensive underwriting with blood and urine requirements. These plans are convenient for employers and perfect for employees who have pre-existing conditions, excluded by traditional disability insurance underwriting. In many cases, significant group discounts are also available.

There is virtually no underwriting, income verification or blood and urine requirements. Although benefit periods tend to be shorter and benefit levels are predetermined, some coverage is better than no coverage. This is an affordable option to consider with employee groups

Source Brokerage‘s GSI team does the heavy lifting, including presenting the quotes, taking the applications, enrolling the group, and ongoing servicing. You earn the commission and a happy client.

For moderate to high-net-worth individuals, the risks of underinsurance can prove to be severe and financially disastrous.  The multi-layer benefit approach to disability insurance will successfully fill the gaps in your clients’ risk exposure.

Source Brokerage disability income specialists can help you develop a disability income plan for your client as well as and assist with the presentation and sale.

To learn more about layering disability income protection for executives, contact Steve Crowe at ext. 222or request a quote.