You’ve worked hard to build your business, equip it with a team of high-performing individuals, and ensure your compensation and benefits package adequately protect your business from what’s come to be known as “The Great Resignation.”
Meanwhile, one thing we’ve learned from the pandemic is that many American workers – lower and higher incomes alike – are not financially prepared for unexpected tragedy.
This is particularly worrisome in the context of disability. When someone can’t earn a paycheck, it may be difficult to keep up with everyday expenses. And unfortunately, suffering a disabling injury or illness is more common than many people think. The Social Security Administration suggests 1 in 4 of today’s workers will be disabled before they reach retirement age.1
That’s why disability insurance is so important. This coverage can pay employees a percentage of their income in the event of a covered disability. The most common version of this protection is basic Group Long Term Disability (LTD) insurance.
However, what many business leaders don’t realize is that for many of their higher-earning employees – including themselves – basic LTD falls short, often providing 40% or less net income replacement. For these workers, supplemental Individual Disability Insurance (IDI) can help improve their income protection and get them closer to their former take-home pay.
Basic LTD policies often cap benefits well below what a highly compensated employee may actually earn. LTD covers a percentage of an employee’s base salary, with a per month maximum. So anyone currently earning over the monthly LTD benefit limit will see a significant gap between their pre- and post- disability income. And because LTD is typically employer-paid, the benefits are taxable, bringing that maximum monthly payment down even more. Supplemental IDI policies can bring the total benefit up to a combined 75% of an employee’s pre-disability income to help bridge this gap.
Additionally, for many higher earners, a large portion of their total compensation comes from bonuses, commissions, or other incentive pay. Basic Group LTD typically does not replace these types of income, but IDI replaces a portion of total compensation, so employees receive benefits that come closer to their earned income.
Our Approach toIncome Protection
IDI is one of many ways the Disability and Life Insurance department at Lighthouse can help protect you, your business, and your employees. We perform an analysis of your current coverage and help to determine if your plan is meeting its intended goals.
“Sometimes in our consultation process we find our client’s existing program is perfect for their needs,” says Scott Weintrob, Account Executive at Lighthouse, “But just as often our clients are surprised to learn they have an outdated disability program that is no longer achieving the intended results. We take the time to help you understand your current program and explain the alternative options so you can feel confident in your protection decisions.”
Lighthouse is partnered with the nation’s most financially secure carrier partners, like Unum, Guardian, Mass Mutual, Principal, and Mutual of Omaha, so you can trust your program is going to deliver its intended results when it’s needed.
If you are interested in learning more about your current income protection program, offering IDI to your employees, or exploring alternatives to help you stay competitive in this market, contact Scott and Craig at:
Scott Weintrob Account Executive
Craig Graves Account Executive