Severance Disability Insurance
The business world is like a complex organism, a living thing that moves and breathes, grows and contracts, flourishes and stalls. It is ever changing according to a multitude of influences like the stock market, politics and local economies which all can greatly affect businesses no matter their size or their industry. Because of economic opportunities and market fluctuations, it has become commonplace to see firms downsize or merge and reorganize creating pitfalls in corporate structuring that human resource departments often struggle to recognize or may not even know exist. One such peril is that of disability insurance for employees terminated following a downsizing or acquisition.
Severance agreements are commonly provided to employees whose positions are deemed redundant and let go. Severed employees are offered packages of salary and benefits continuation for specific periods of time, usually from six to 24 months in length.
Employment regulations of many U.S. states require that provided severance benefits mirror those of non-severed employees. The problem is that traditional disability insurance carriers offer group or individual insurance policies to actively-employed persons only. As a result, most American employers needlessly end up temporarily self-insuring recently terminated employees. This substantial liability created by employee severance is completely unnecessary, but a cost-effective solution is available. Severance disability insurance is designed to financially indemnify a severance agreement and allay the expenses typically involved in the disablement of a former employee who has yet to find their next employment.
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 diligent employers. The plan relieves corporations from potentially costly 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 the group and/or individual benefits sponsored by the former employer. Benefits can be structured to best match the terms set-forth by the severance agreement.
The Severance Agreement Disability Insurance plan was created by Petersen International as an imperative financial asset for American business owners. It is important that you make your business clients aware of the unforeseen HR and financial liabilities surrounding a severance arrangement. Contact Petersen International at (800)345-8816 for an outline of this specialty business disability product.