Disability Insurance for Outplaced Or Terminated Professionals and Executives

Long Term Disability (LTD) is not extended in most severance packages!

 

Disability is an exposed risk during unemployment or outplacement!

 

An earned income is necessary to apply for Regular Individual Disability Insurance!

 

Most employees choose to rely solely on their group LTD benefit for their income protection needs. In the event of termination it is common for an employer to extend certain benefits - typically health, dental and perhaps life insurance. LTD coverage, however, usually ends on the last day worked. Compounding the problem, it is not usually possible to purchase individual DI when one is in a job search situation or starting a new business. But the need for coverage is as great as ever - what if a serious illness or injury prevents the individual from resuming their career for a long period of time, or perhaps permanently?

 

We provide a specialized disability income replacement solution for employees who lose their group LTD coverage as a result of job termination. This allows them to protect themselves against the potentially catastrophic consequences of a long term and possibly career-ending injury or illness during their career transition period.

 

The plan may be purchased by the employee or the employer. By providing this benefit as part of a severance package, the employer may be protected from potential liability if the employee were to become severely disabled during their job search period, and as a result is unable to resume their career.

 

These plans are highly customizable and prove to be the only viable solution for outplaced professionals. Contact us for details.

 

Frequently Asked Questions:

• Why do employers usually not extend LTD coverage to terminated employees?
  
  Insurance companies do not like to extend LTD coverage to terminated employees. They feel that the risk of claims increases substantially and when claims do occur it is more difficult to assess the claimant's ability to work and to successfully return them to work.
• Why can't an outplaced employee qualify for regular individual disability coverage?
  
  Insurers that offer individual coverage have the same concerns as group LTD insurers. In addition they don't want to issue a policy that is likely to be in force only for a short time and may be cancelled if and when the insured is covered by group LTD again through a new employer. Even if the individual has already established a new full-time or part-time business, insurers want to see them well established with a track record of earnings in the new business before they will consider coverage.
• How can you offer this coverage when others can't?
  
  This plan is specifically designed for those who are outplaced. It provides only temporary coverage and the benefits do not overlap with severance income. Through these and other design features the insurance company is able to offer this product to those who would otherwise be considered "uninsurable".
• Why is coverage only temporary?
  
  It is expected that by the time the coverage expires, the insured will be working again. Then they will either be covered by a new employer's group LTD plan, or they will be able to qualify for individual disability coverage in the regular market.
• What if the applicant has a health problem?
  
  The product is designed to enable us to offer coverage to the majority of applicants. Less than 5% of applications are declined. Others may receive coverage with an exclusion for certain serious pre-existing medical conditions.
• What happens if the insured gets a new job and has new LTD coverage?
  
  They are eligible for a partial refund of the premium paid for the policy, when they provide proof that they are now covered under a new group LTD plan.

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