Are you using IDI coverage to fill gaps in your clients’ executive benefits packages?
When HR and benefits departments create group benefits plans, they often focus on the majority of employees – hourly wage workers, middle management, and those earning less than $10,000 a month gross income.
But we know that the c-suite, including the business owner, plays a key role in daily operations and the success of the business. Retention of high-level employees is crucial to a company’s growth and longevity.
In many ways, the c-suite is no different than other employees: They want a robust worksite benefits package and they want to know that their income is protected in the event of disability.
Most plans include provisions for group long-term disability (LTD) as a foundation for income protection. In states like New York and New Jersey, which have statutory short-term disability, LTD picks up where STD or DBL leaves off.
Yet many group plans do not offer the type of coverage high-earners need to maintain their lifestyle and pay their bills if they become sick, injured or disabled and unable to work in their current occupation. Because of caps on benefits, LTD insurance often replaces just 40% of their salary for a six-figure earner.
That’s where Individual Disability Income (IDI) insurance comes in. Through our network of carriers, The DBL Center is able to offer standard issue IDI insurance beginning at 5 lives.
What You Need to Know About IDI Insurance
As an insurance broker, if your client has at least 5 employees earning at least $100,000 annually, you can help them find the right policy. These plans provide up to 75% income replacement and can include base pay and bonuses.
The plan has a broad definition of disability, as it covers individuals if they can’t work in their own occupation. The DBL Center can write policies with a multi-life discount of 20% to 30% and unisex rates. This is an employer-sponsored benefit and, depending on the policy, your clients may be able to use IDI premiums as a line of credit toward their other group policies.
You should also be aware that coverage is:
- Non-cancellable / guaranteed renewable up to age 65
- Portable should the employee leave the firm
- Offered on a Standard Issue – GSI Basis at 5 lives
Who Can Benefit from IDI Insurance?
Recruiting and retaining employees in highly technical fields, including technology and banking and investments, has become more difficult following the pandemic. People want opportunities to work remotely. Many executives, engineers, and other high-performing individuals have moved away from tech hubs to work in areas with warmer climates during the pandemic.
Offering robust worksite benefits packages remains one of the best ways to recruit and retain top workers. If you have clients in banking, technology, consulting, accounting, engineering, or the legal field, who employ at least five highly compensated individuals, they can benefit from this coverage.
IDI fills the gap where LTD leaves off. Highly compensated individuals can leave their investments where they are, which is crucial in a bear market, and meet their living expenses and pay additional medical expenses that may arise from their disability, with IDI coverage.
Highly successful people and top earners have a way of making ends meet and providing for their family in any circumstances. But borrowing against a retirement account or selling investments is not the best financial choice in a bear market. Nor is it a good idea to borrow money against real estate holdings or other investments when interest rates are rising.
Especially in today’s inflationary economy, it’s important for your clients to ensure that all employees have adequate disability coverage to reduce employee stress. When a disabled executive doesn’t have to worry about money or providing for their family, they can focus on healing and recovery. That can mean a faster return-to-work, which benefits the individual and the organization.
Take a look at your current book of business and pinpoint organizations with more than 5 high earners. Actively selling IDI can be a great way to boost your business in the fourth quarter while delivering the benefits your clients need.