Why Do High-Income Employees Experience an Income Replacement Gap?
WHEN 60% ≠ 60% Executive Individual Disability Insurance (IDI)
WHY DO HIGH-INCOME EMPLOYEES EXPERIENCE AN INCOME REPLACEMENT GAP?
- Employer-provided group long-term disability (LTD) insurance offers an excellent foundation for employees but is often insufficient to meet the needs of high earners.
- Group LTD plans typically do not protect incentive compensation such as bonus and commission.
- Group LTD benefits are generally taxable at time of claim further reducing income replacement.
The Result: Group LTD plans often do not adequately protect the earnings of high-income employees
AS COMPENSATION GOES UP…THE PERCENTAGE OF INCOME REPLACED GOES DOWN
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