Minimizing Corporate Risk with Severance Disability Insurance
The American business world is constantly changing. 2018 was a terrible year for the stock market which has become a rollercoaster of flourishes and subsequent severe corrections. In spite of or perhaps as a result of the economy’s volatility, we are seeing large, old institutional brands folding while newly and foreign-funded conglomerate corporations going on massive buying sprees, merging with or acquiring small, diverse, but historically successful companies. Mergers and acquisitions have become rampant over the last 36 months and very notably in the insurance brokerage business.
As financial institutions continue to merge or are bought-out, department downsizing and restructuring are inevitable, creating gaps and pitfalls in corporate reorganization that management and human resource departments often miss or may not even be aware exist. One such unfamiliar, but important peril is that of disability insurance for personnel terminated following a corporate downsizing or takeover.
When severance agreements are presented to employees whose positions are deemed redundant in restructured or diminishing companies, the severed employees are often provided packages of continued salaries and benefits for varying time periods, usually from six to 24 months in length.
Employment regulations of many U.S. states require that provided severance benefits mirror those of their currently employed counterparts. The problem is that disability insurance carriers in this country only offer group or individual insurance policies to actively-employed persons. As a result, most American employers needlessly end-up self-insuring recently terminated employees, at least temporarily. This substantial financial liability created by employee severance is completely unnecessary. The solution is “severance disability insurance” which is designed to allay the expenses typically involved with the disablement of a recent, but former employee.
Petersen International offers the Severance Agreement Disability Insurance plan which is a unique product and service for the business world. Underwriters provide a road map for human resource managers and business owners, helping arrange the necessary and promised benefits to financially protect both terminated employees and their employers. The plan relieves corporations from potentially-costly financial liabilities should severed employees become disabled while under the protective umbrellas of legally-binding severance contracts.
The product itself offers long-term disability benefits that copy group and/or individual benefits sponsored by the former employer. Plan designs are available to match the exact terms of the severance agreement in length and benefit structure.
The Severance Agreement Disability Insurance plan was created by Petersen International to minimize corporate risk as an imperative asset to American business owners. It is important that you make your business clients aware of the unforeseen HR hazards and financial liabilities surrounding a severance arrangement. Contact Petersen International at (800)345-8816 for more information regarding this one-of-a-kind corporate disability insurance solution.