Severance Insurance: An Important Asset for Business Owners
As global economies flourish and contract, the American business world changes constantly. Companies merge and downsize creating pitfalls in corporate reorganization that human resource departments often miss or may not even be aware exist. One such unfamiliar peril is that of disability insurance for employees terminated following a downsizing or acquisition.
Severance agreements are usually considered and presented to employees whose positions are deemed redundant in restructured or shrinking companies. Severed employees are frequently offered packages of continued salaries and benefits for specific 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 current employees. 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 temporarily self-insuring recently terminated employees. This substantial liability created by employee severance is completely unnecessary, but the solution is “severance disability insurance” which is designed to allay the expenses typically involved in the disablement of a 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 diligent 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 the group and/or individual benefits sponsored by the former employer. Policy terms are available to match the exact terms of 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 one-of-a-kind insurance policy.