Income Protection for “The 1%”
Have you ever wondered how close you are to making the exclusive club of America’s top one percent of income earners? Many of America’s elite wealth accumulators have the goal of advancing their careers enough to enter that top 1%. A wonderful interactive webpage developed by CNN Money shows you what percentage your household income falls into. They define "The 1%" as a household income in excess of $430,000. With such a large annual income, what is the optimal way to structure a comprehensive and thorough disability income protection plan?
The first layer of protection is usually a Group Long Term Disability (Group LTD) plan provided by an employer. Benefits are typically structured at 60% of income up to a maximum cap of $7,500 to $15,000 per month. Larger employers are typically able to negotiate with Group LTD carriers to obtain larger monthly benefits. With a maximum monthly benefit of $15,000, Group LTD leaves incomes over $300,000 exposed to potential shortfalls.
The second safeguard layer is Individual Disability Insurance (IDI). Individual coverage can be offered as a voluntary benefit via the group plan or a standalone plan. Insurance companies typically limit the issue and participation level to around $25,000 per month. A combination of Group LTD and IDI plans provides full coverage to incomes up to $450,000.
For the elite 1% of American income earners, $25,000 of monthly benefits barely covers a large home mortgage. Without additional coverage, high net worth individuals will need to tap into their savings and liquid assets to cover luxury car payments, vacation homes, country club dues, school tuitions, food, utilities, insurance, and all other regular monthly expenses.
The best solution for elite income earners is High Limit Disability insurance. High Limit Disability is a specialty market that exists specifically to address the needs of top income earners. Enormous monthly benefits are the primary focus of High Limit Disability plans. Benefits can range from an additional $5,000 to $250,000 per month. In addition to monthly benefit platforms, plans can be designed to provide a lump sum benefit with limits as high as $100 million.
The third layer of income protection is a supplemental plan designed to layer on top of Group LTD and IDI plans. High Limit Disability increases the maximum income covered from $450,000 to $5,000,000. Plans are highly customizable and they are tailored to meet the specific needs of the elite income earner.
Contact our office today to learn more about this unique specialty product.