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 

Click here to read the full article by M Financial Group!