Most highly performing executives spend most of their energy focusing on how to move, grow or solve their own company’s challenges. It is common for them to assume that their company has them covered in the event of a Long Term Disability.
Unfortunately, the executive’s income is often only insured from 35 to 50% of their actual earnings. This is as a result of the capping of the maximum dollar amount paid by group long term disability plans. Often, group plans do not cover bonus or incentive compensation, which are critical elements of executive compensation. Group deﬁnitions of disability may force a highly skilled professional to engage in any occupation to which they are reasonably suited instead of their chosen occupation.
Executive disability plans may be employer paid, they may be provided on a voluntary employee paid basis or some combination of the two. The organization may be selective in whom they allow to participate in these programs and they do serve as an excellent retention tool.